GM - EVs Are Not the End of Specialized Automotive Equipment
There’s no doubt that electric vehicles are coming. Moreover, it seems that the pandemic only accelerated the shift from ICEs to electrification despite also causing supply chain disruptions and plant closures. While it is true that EVs have fewer parts and lower maintenance costs, they still need equipment. Although the parts are obviously not the same, the demand for specialized automotive equipment cannot be diminished. Moreover, it carries significant opportunity for innovation.
Worksport launches an investment opportunity to public
A well-established innovator and tonneau-cover manufacturer, Worksport (OTC: WKSP), is one of those rare companies that can bring EVs to a whole new level with its intellectual properties. This Canadian-based company just revealed it has achieved another important milestone by receiving a Regulation A qualification that allows it to issue securities. This has been a remarkable year for Worksport that sealed exclusive deals for its TerraVis ground-breaking solar technology to be integrated within the upcoming Hercules’s Alpha and Atlis’ XT electric pickups. These are eagerly awaited all-electric pickups that are poised to challenge Tesla’s (NASDAQ: TSLA) cybertruck. Besides its TerraVis solar system, Worksport has already positioned itself as a high quality, functional, and aggressively priced tonneau cover provider for traditional light trucks like US’ favorite Ford’s (NYSE: F) F150, along with the remainder of F-series, as well as General Motors’ (NYSE: GM) Silverado, Canyon as well as Fiat’s (NYSE: FCAU) RAM. The plans for electric versions of these traditional models are well underway. As for Worksport that will clearly play an important role in the electrification era, the proceeds that come from Regulation A qualification will be used for further product developments and inventory as this specialized equipment company continues to grow at an exponential pace.
Autozone
Autozone (NYSE: AZO) has a long history of growing faster than its peers and opportunities for continued domestic and international growth, as well as the position to benefit from rising used car sales, rising average age of cars on the road, and the forecasted growth in the number of global vehicles. With the crisis, it is to assume many people will opt to update their existing vehicles rather than obliging to a new purchase. Moreover, EVs have a long way to go before they become affordable. Like most specialty retailers, AutoZone is competing with big box retailers and e-commerce giants like Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN), besides its peers. However, its specialized customer service is making it superior to these giants.
AutoZone has grown its revenue in each of the past 22 years. Since 2015, its domestic same store sales have grown by 3.1% compounded annually. This is impressive considering the U.S. auto parts retail market achieved only 1.8%
AutoZone offers free services such as diagnostics, readings, testing, charging, while also helping customers locate and sometimes even install parts. This is how they managed to build a loyal customer base.
Even though many customers prefer the convenience of walking out the door of a brick-and-mortar store, AutoZone has also developed a competitive e-commerce platform for those who prefer to find their auto parts online. The firm has two websites, one for retail and one for commercial customers.
Obviously, the long-term demand for auto parts remains important to AutoZone’s future profit growth. But the rising age of cars provides long-term demand for auto parts that will fuel long-term growth in profits for AutoZone. Moreover, AutoZone already supplies several parts for Tesla’s (NASDAQ: TSLA) such as struts, brake pads, rotors, windshield wipers, headlights, cabin air filters, and mirror replacement glass.
An All-Electric Future Is Not Behind the Corner
BloombergNEF expects there will be 200 million more conventional vehicles on the road by 2030 while the number of EVs increases by only 108 million. In other words, the number of new conventional vehicles on the road will increase nearly twice as much as the number of EVs. Even when EVs to replace traditional cars, they still require maintenance. While it is true that EVs have fewer parts and lower maintenance costs, their maintenance costs are only 26% lower than conventional vehicles, according to a Forbes study.
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