E-mobility combined with artificial intelligence (AI) creates the potential for significant social and environmental change, Oliver Salzberger, portfolio manager for discretionary portfolio management at Austrian asset manager Erste Asset Management, told Expert Investor.
He explained that the convergence of developments like 5G and AI with autonomous vehicles “is the exciting topic”.
Autonomous ride sharing services
Salzberger particularly points to shared mobility, which involves sharing an asset via a digital platform and related services.
People can rent out their own car as an Uber taxi when they don’t use it and make money, he explains, which could lead to a decrease in the numbers of cars on the road.
“This could solve the mobility problem in cities and also the problem of a lack of space.
“And I can tell my car, for example: ‘I’m in a hurry’, and my car then communicates with other cars that are driving in front of me and says: ‘let me pass please, I’m in a hurry’.
“You pay to be quick, and you receive money if you don’t hold anybody back,” he adds.
The ratio of the world’s population living in urban areas is expected to increase to 68% by 2050 from 55% in 2018, according to the UN.
The value of the global electric mobility market is expected to reach $489.3bn (€439.8bn) by 2025 and register compound annual growth rate of 21.6% from 2019 to 2025, according to a study conducted by Grand View Research.
Erste AM’s Salzberger sees the key opportunity being companies that will provide the ecosystem surrounding e-mobility.
“It’s not only one company dealing with this. Next to automakers, there are battery manufacturers, fuel cell manufacturers. Other forms of mobility are also interesting, whether they are e-bikes, e-scooters or buses,” he says.
“It can be chip makers, too. If you compare with a normal car today, then a car of the future has 10 times, 20 or 30 times as many chips installed, and they are the ones profiting.”
He also believes that some corporates could benefit from national subsidies that support the smart mobility infrastructure.
Erste AM recently launched an actively managed retail equity fund, the Erste Future Invest, which invests in five megatrends including e-mobility.
These are: emerging markets, environment and clean energy, technology and innovation, lifestyle, health and prevention.
The euro-denominated fund, which has €42m of assets under management as of end of September, invests in about 70 holdings.
Fund manager Bernhard Selinger said: “We have complete discretion when choosing the holdings, ie what we assess as the most promising trends and stocks.
“In addition to blue chips, which shape the development of their industry significantly and have the market power to initiate new trends, there are a variety of niche businesses in the fund – young companies, often leading in R&D and with significantly higher risk but also correspondingly higher long-term revenue opportunities.”
Regionally, 45% of the holdings are located in the US, followed by 11% in China and 9.6% in Japan.
Salzberger believes that funds with trending themes should be blended.
“It is common that topics are always ‘hyped up’, and when they slow down it’s nice to have some type of mix.
“You can create a mix with this topic too: fuel cells, battery makers, automakers, everything connected with mobility service,” he explains.