The Russia-Ukraine war has ascended crude oil prices, which in turn elevated petroleum prices, and once again propelled purchase willingness of EVs. Consumers are now starting to shift to electrification in order to lower the impact of prolonged high oil prices. SinoPac SITC pointed out that this wave of high oil prices helps to accelerate the popularization of EVs, where smart vehicles adopted with self-driving and smart applications are also pursued by the market, which expedites construction and development of industry chain, as well as continues to exert benefits on Taiwanese suppliers from related supply chains.
Taiwanese suppliers have been spontaneous in penetrating into EV development amidst numerous release of EV models. Contract manufacturer giant Foxconn will be releasing Model C, an affordable electric SUV that is capable of high performance and long driving range, in October this year. Among the current EV system of Foxconn, Taiwanese supply chain occupies approximately 65%, and the target is to climb to 90% by 2024.
SinoPac SITC commented that EVs, having now incorporated with smart applications from being transportation of energy transformation in the past, would facilitate comprehensive transformation of the information and communication industry, where the active implementation of domestic supply chain, including autonomous design and R&D strengths, by local businesses such as Foxconn, would fully benefit the overall smart EV industry chain.
SinoPac SITC pointed out that the development of EV has fortified safety requirements as seen from the regulations for the protection of car passengers that the National Highway Traffic Safety Administration (NHTSA) announced in March. With automotive manufacturers producing vehicles without steering wheels in the future, regulatory authorities are looking to first amend the relevant regulations and perfect the driving mechanism, where the quantity of lenses, radars, LiDARs, and automotive chips that are required by self-driving vehicles has elevated drastically, which benefits the Taiwanese industry chain.
SinoPac SITC emphasizes that the investment market is hit with various uncertain factors this year, including war, pandemic, risen interest rates, and inflation, and investment should be placed on fields that establish a clear tendency. The inflation of crude oil is also yielding positive outlook to the subsequent EV market. SinoPac Taiwan EV Supply Chain ETF invests in the EV supply chain, and is optimistic towards the long-term trend. Investors are recommended to initiate establishment from the low point.
(Cover photo source: Taiwan Cement)