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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Pros and cons of investing in shares of electric carmakers

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Of late, there has been an upsurge in international share in the shares of electric vehicle companies, with a number of investors, whether from the region or beyond, having begun to set aside some of their funds or personal savings in invest in the stocks of prominent carmakers.


Global demand for electric vehicles is rising in response to a growing campaign to reduce the carbon footprint on the environment and thereby combat global warming which is linked to a number of natural disasters.


Fossil fuel emissions are also linked to a variety of human diseases and ailments. But switching to green or low-carbon fuels, we can improve air quality for all humans, as well as improve their quality of life.


A switch to electric cars also means reducing the gasoline and diesel consumption bills. These cars have many other advantages and features over regular, combustion-engine cars.


Fuel cells used in electric vehicles typically do not require large quantities of chemicals that can potentially pollute the environment, unlike conventional cars that need engine oils, coolant and other lubricants and liquids for their operation.


Moreover, the fuel cell fitted out in electric vehicles can be recharged using the electrical network at homes or at charging stations that are proliferating along highways in several capitals around the world.


Today, there are great expectations from car owners that the prices of electric cars will rise significantly over the next fifteen years as a result of investors rushing to buy the shares of Tesla other brands.


Tesla, for example, has seen its market value soar. Last year, the company reported a 250-fold jump in profits and is currently the leading car brand in the world.


Several other carmakers are moving into the production of electric vehicles, while some have also ventured into the manufacture of electric buses and trucks, notably in China, UK and other parts of Europe.


While investor interest in such car brands is at record levels, investors must exercise cautions in these pandemic times to avoid putting all of their “eggs in one basket”, so to speak.


Seeking to capitalise on the intense competition in this space, some companies with little experience in electric vehicles can look to get rich by jumping on to EV manufacturing bandwagon.


Backed by massive advertising and promotional campaign, and with the support of speculators, they can drive up demand in their stocks.


After all, there is no guarantee that the new players will not face challenges, such as in the form of fuel cell efficacy or supply, or availability of quality manpower, to achieve the success that conventional cars have long enjoyed.


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