Albemarle & Aptiv: Why EV Supplier Stocks Are Poised To Beat The Market

Albemarle & Aptiv: Why EV Supplier Stocks Are Poised To Beat The Market

Share to Linkedin Our indicative theme of Electric Vehicle Component Supplier Stocks - which includes stocks of companies that make EV components and raw materials for batteries - has outperformed rising by 8. 3% year-to-date, versus 3. 6% for the S&P 500. The theme has also returned about 45% since the end of 2019, compared to a return of about 20% on the S&P 500. Within our theme, auto parts major Aptiv has been the strongest performer this year, rising by over 16% since early January, driven by stronger than expected quarterly earnings, while Amphenol Corporation, a company that makes electrical and fiber-optic connectors, has underperformed, declining by about -2% year-to-date. So will the theme continue to outperform in the near-to-medium term? Yes, we think so for a couple of reasons. Firstly, regulations under the Biden Administration are likely to be favorable for green technologies including renewable energy and electric vehicles. Secondly, mainstream automakers are making bigger commitments to electrification, and this should drive up demand for EV suppliers. For example, in late January, General Motors GM - the largest U. S. automaker - announced that it would launch 30 electric models by 2025, with plans to sell only EVs