THE CAR OF THE FUTUREElectric Vehicles and Self Driving Cars

INVESTABLE THEMES

The global automotive industry is at an inflection point; one that is probably as important as the transition to mass production pioneered by Ford Motor Company in the early twentieth century.

THE BIGGEST DISRUPTIVE TO THE AUTO-INDUSTRY IN 100 YEARS

Within this massive paradigm shift are two attractive and investible disruptive sub-themes – the electrification of the automotive fleet, and the proliferation of semi and autonomous vehicles.

ELECTRIC & AUTONOMOUS CARS

WHAT IS AN ELECTRIC CAR?

An electric car is an automobile that is propelled by one or more electric motors, using electrical energy stored in rechargeable batteries or another energy storage device. Electric motors give electric cars instant torque, creating strong and smooth acceleration. They are also around three times as efficient as cars with an internal combustion engine.

WHAT IS AN AUTONOMOUS CAR?

An autonomous car is a driverless car or a self-driving car which is powered by robotics. A car that can accelerate, brake and steer itself. The driver is not responsible for monitoring, supervision, and over all operation of the vehicle. The driver will not be responsible for driving the vehicle when in autonomous mode.

A semi-autonomous car is a car that supports the driver with keeping the distance to the vehicle in front and keeping the car in the lane (accelerate, brake & steer). However, the driver remains responsible for monitoring, supervision, and over all operation of the vehicle and is expected to actively participate in the driving. With semi autonomous cars, the driver is always legally responsible for driving the vehicle.

WHAT IS A SEMI-AUTONOMOUS CAR?

WHAT AUTONOMOUS CARS ARE MADE UP OF

Source: McKinsey & Company

HardwareCorner modules, advanced sensorsEntertainment

platformFeatures and connectivity mirroring the home-entertainment experienceApps and servicesFull library of applications from 3rd parties

DrivetrainElectric motors, power electronics, advanced batteries

Industrial designModular bodies, advanced user interfaces

Autonomous drive/operating systemAdvanced central operating system with self-driving capabilityData analyticsFully connected cloud processing and data feeds for manufacturers

Alternative business modelsAutonomous vehicle sharing, new service offerings etc.

Vehicle hardwareVehicle softwareAlternative business models

HOW THEY WORK• Radar sensors dotted around the car monitor

the position of vehicles nearby.• Video cameras detect traffic lights, read road

signs and keep track of other vehicles, while also looking out for pedestrians and other obstacles.

• Lidar sensors (light detection and ranging) help to detect the edges of roads and identify lane markings by bouncing pulses of light off the car’s surroundings.

• Ultrasonic sensors in the wheels detect the position of curbs and other vehicles when parking.

• A central computer analyses all of the data from the various sensors to manipulate the steering, acceleration and braking.

A lidar sensor

WHO’S MAKING THEM?

WHO IS BEHIND THE TECHNOLOGY?

And many more…

MACROVUE’S CAR OF THE FUTURE

SHARE PORTFOLIO

By 2040, 35% of all new vehicles sold globally are expected to be electric vehicles.

35%

The average price of lithium-ion battery packs used in electric vehicles fell 65% over the period 2010–15.

65%

FACTS & FIGURES

60%

Sales for electric vehicles rose 60% from 2011 to 2015.

2018

Tesla has announced that its customers would be able to summon a car across the country by 2018.

BMW, Ford, General Motors, and Volkswagen are expecting to release their first self-driving cars on the market in 2020–21.

2020

Lawmakers in German Bundesrat have recently voted to ban vehicles powered by gas and diesel by 2030.

2030

Chinese tech giant Baidu aims to have self-driving shuttles in two years.

IHS Automotive says there will be 12 million self-driving cars sold annually by 2035.

2018

400,000 2035

FACTS & FIGURES

400,000 people have ordered the Tesla Model 3 – its first electric car to hit the market.

US$1.6tn

The Obama administration said it will help speed along autonomous car progress with $4 billion in funding over the next 10 years. It is thought that Trump plans to spend $1.6 trillion.

The economic impact of autonomous vehicles is estimated to be $US200 bn to $US1.9 tn per year by 2025.

US$1.9tn

Driverless car technology added between $70,000 and $100,000 to the price of a car in 2014. It will add just $7,000 to $10,000 in 2025.

$10k

A PRE-RESEARCHED THEMATIC SHARE PORTFOLIO

Macrovue has created a thematic portfolio of stocks based on the two most important disruptors to hit the automobile industry in more than 100 years – electric and autonomous cars. The carefully researched share portfolio, called a Vue, is poised to benefit from the long term structure change in the automotive industry.Electric and autonomous cars are an attractive investable trend because:• It is very early in the adoption cycle• The addressable market is global and extremely

large• Regulation is a positive, not a negative force• The major players are numerous, well capitalised,

and for the most part attractively valued.

RESEARCHING THE CAR OF THE FUTURE

Our investment team used a quantitative model to short list stocks related to the theme. This measured relative value, growth, quality, dividend, and momentum. In the final stages of our research, fundamental research was conducted on the companies in the short list. This process leads us to arrive at the final list of stocks.

The qualities we looked at included; • Sustainable competitive advantage • Earnings growth potential • Trading multiples• Industry outlook• Consensus earnings forecasts.

We review stock performance on a regular basis and inform our clients if any changes are made to them.

Become commonplace. Drivetrains shift toward hybrid-electric and full electric as they mature and become competitive with ICEs.

Electric Vehicles

As the sharing economy expands and consumer preferences change, the standard model will continue to evolve from outright purchase or lease to rentals and car sharing.

Diverse Mobility

The possibilities for “infotainment” innovations, novel traffic services, and new business models and services will increase as cars get connected to each other, to the wider infrastructure (via IOT), and to people.

Connectivity

Fully automated cars will evolve fairly quickly from advanced driver-assistance systems (ADAS) to fully autonomous driving.

Autonomous Driving

OUR ASSUMPTIONS

TECHNOLOGY COSTS ARE DROPPING FAST

Batteries make up a third of the costs of an electric vehicle. The average price of lithium-ion battery packs used in electronic vehicles (EVs) fell 65% over the period 2010–15. As battery costs continue to fall, demand for EVs will rise.

Driverless car technology added between $70,000 and $100,000 to the price of a car in 2014. It will add just $7,000 to $10,000 in 2025. And by 2035, the technology will add only $3,000 to the price of a vehicle.

TECHNOLOGY COSTS ARE DROPPING FAST

THE NUMBER OF SELF-DRIVING CARS WILL GROW QUICKLY

IHS Automotive estimates that by 2035, there will be 76 million vehicles on the road with some level of self-driving technology. By that same year, about 10% of the vehicles sold will be fully autonomous.

SELF DRIVING CARS WILL OPEN NEW MARKETS

Driverless cars will not only transform how we get around, but also car ownership. Many people will rent vehicles instead of buying them, and the people who do own will likely rent them out to the rest of us when they aren't using them.

HOW TO GET STARTED INVESTING IN THIS LONG-TERM GLOBAL TREND

Application to trade

Complete a trading account application with Macrovue. The

application takes less than 10 minutes and

its all online. Best yet, there are no fees to

open an account. You must be an Australian Tax Resident to apply.

Invest some funds

Choose the portfolio

Step 1 Step 2 Step 3

Choose how much you want to invest and

transfer some funds to get started investing. There is no minimum

balance to start investing so you can invest as little or as much as you like.

Once your funds have cleared, allocate the

amount you wish against the Car of the Future portfolio. Then

you’re done. If we change any of the

stocks in the portfolio, we will notify you so

you don’t have to worry about keeping up-to-date with the

theme.

Start a free trial

LEARN MORE ABOUT INVESTING IN THE CAR OF THE FUTURE

Read our Global Markets Expert

article on the Car of the Future

Sign up for a free trial to view all the

stocks in the portfolio

Click here to read

Sign up for a free trial

+61 2 8294 5993Telephone:

Stone and Chalk

Level 2, 50 Bridge

Street

Sydney NSW 2000

Address

Any questions?

Email: support@macrovue.com.au

Contact Macrovue:

macrovue.com.au