- By September 2020, growth rate of electric vehicle market increased to over 11% YoY
- September 2020 marked record month for the EV industry, as 345,000 electric vehicles were sold globally – accounting for 4.9% of total automotive sales
- Increase in EV sales due to combination of policy shifts, technological innovations
- Net Element, through intended merger with privately held Mullen Technologies, expects to begin marketing Dragonfly K50 sports car in United States by Q2 2021
The winds of change are blowing as global warming and climate change-induced catastrophes are waking the world to the imminent need to shift towards green energy options. Net Element (NASDAQ: NETE), a financial technology company undergoing a complete transformation of its business model by entering into a definitive agreement to merge with privately-held Mullen Technologies, seems to have gained entry into the recently burgeoning electric vehicle industry at precisely the right time.
Following from Net Element’s decision to enter into a binding Letter of Intent to merge with privately-held Mullen Technologies Inc. in mid-June 2020, NETE announced provisional plans to divest itself of its legacy payments-as-a-service transactional model and alter its operational focus towards the electric vehicle space. The timing could not have been any more propitious; in a dramatic turnaround to the dismal sentiment surrounding the sector in the early part of 2020, September 2020 proved to be a spectacular month for global passenger plug-in electric vehicle sales; sales volumes of electric vehicles touched 345,000 over the course of the month, equivalent to 4.9% of total global automobile sales (https://ibn.fm/CFqDW). More remarkably, after the first nine months of the year, global electric vehicle sales volumes amounted to 1.784 million units – a total equivalent to an 11 percent growth rate over the identical time frame in 2019, and equal to 3.4 percent of total vehicle sales over the nine-month period.
Oddly, the increase in electric vehicle sales growth rates has come about amid a record decline in crude oil and gasoline prices – which in turn have led to a decline in the cost of ownership of traditional internal combustion engine-powered vehicles. Rather, the growth has been spurred by the confluence of two trends driving the industry’s growth—namely, policy initiatives and technological advancements.
In early November 2020, the United Kingdom announced that the sale of new gasoline and diesel-fueled cars would be banned from 2030 onwards, bringing the original deadline forward an entire decade (https://ibn.fm/sn17o). The UK’s policy change followed in the wake of Sweden, which similarly moved towards introducing a ban on the sale of internal combustion-powered vehicles from 2030 onwards; the policy shift has already led to a dramatic transformation in the nation’s automotive market, with electric vehicles making up nearly 28% of Sweden’s new car sales over the first three quarters of the year.
However, policy shifts have not been the sole driver behind the dramatic increase in EV sales in 2020. Electric vehicles have been the beneficiary of a series of technological innovations within the sector, byproducts of the vast increase in the capital expenditure and research within the product segment.
Over the past year, a number of major automotive OEMs have committed to significant upfront investments in developing their EV portfolios, with Ford announcing that it would invest $11.5 billion on EV models by 2022 while the Volkswagen Group has forecast achieving 1 million EV sales by 2023. More importantly, a greater focus on EVs has led to a greater proliferation of choice available to consumers, with IHS Markit predicting that there will be 130 EV models available to US consumers by 2026, from 43 different automobile manufacturers (https://ibn.fm/OFVyb).
Although the merger between Net Element and Mullen Technologies is not due for completion until 2021, Mullen has already set itself a number of lofty ambitions – chief of amongst which is the desire to reach a production threshold of 35,000 vehicles per annum by 2026. With Mullen’s initial two models already in the works and with the global EV sector set to skyrocket in terms of value over the course of the next decade, Net Element finds itself in the ideal position to capitalize from one of the biggest shifts in consumer behavior the world has ever seen.
For more information, visit the company’s website at www.NetElement.com.
NOTE TO INVESTORS: The latest news and updates relating to NETE are available in the company’s newsroom at http://ibn.fm/NETE
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