Engines of EM Growth

Electric vehicles (EV) are a big investment theme and emerging markets serve a critical function as both end destinations for the cars themselves and as the location for many companies involved in their manufacture.

There are plenty of companies involved in the production of EVs and many have viable offerings and ambitious roadmaps. The excitement in the space is merited—the potential is huge and the prospects of reducing tailpipe emissions are real. However, while EVs are a rapidly growing consumer discretionary market—thanks to their perceived environmental and social attributes—it’s a fiercely competitive industry with tight margins and still evolving products.

To better understand the EV market—and the potential of all its players—it’s helpful to understand the drivers that have propelled the industry to where it is today. One of the biggest forces has been regulatory incentives. Regulation can bring positive inducements and negative costs, both of which shift consumer behavior. I grew up in Denver, a city which regularly exceeded the Environmental Protection Agency’s (EPA) air quality standards in the early 1980s. My dad also worked for the EPA. While the agency has regulated emission standards since the early 1970s, I have seen how the regulatory topography in the U.S. and in other markets has shifted its focus to climate inducements for the mass adoption of EVs.