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To the chagrin of many investors, entrepreneurs and economists, Australia doesn’t have a huge industry making electric vehicles.
Of course, this is a real shame, with EVs set to gradually replace petrol and diesel cars in the coming years around the globe.
It could be the missed opportunity of a lifetime.
However, there are still some beneficiaries of the EV boom on the ASX, even if they don’t make the cars themselves.
Here are two such ASX shares that some experts are bullish on right now:
The rise of Chinese EVs in Australia
Car dealership network Eagers Automotive Ltd (ASX: APE) has been on the ASX a long time.
But last month the stock shot up 9.2% on news that overnight it’s become a proxy for electric vehicle sales in Australia.
“Eagers Automotive announced it has acquired an additional 31% ownership stake in Electric Vehicle Dealer Group, the exclusive national retail joint venture for Chinese EV manufacturer BYD,” Glenmore portfolio manager Robert Gregory said in a memo to clients.
The company paid $70 million for the extra piece of the pie, consisting of $50 million cash and $20 million in Eagers shares.
That took its ownership of the Australian BYD distributor to 80%.
Gregory is convinced this is a bull move.
“Given the sales growth potential of the BYD brand in Australia, we believe this agreement could deliver significant earnings for Eagers Automotive over the coming years.”
The Eagers Automotive share price has now rocketed an impressive 38.5% year to date.
A barometer of public interest in electric cars
A less obvious winner from the EV adoption is fleet services provider Fleetpartners Group Ltd (ASX: FPR).
This time it’s the folks at Celeste Funds Management that have identified it as an investment opportunity.
They benefited from an excellent 18.4% rally in share price last month.
“The stock has benefited from positive sentiment around the EV transition across Australia and New Zealand,” the Celeste analysts said in a memo to clients.
“The Electric Car Discount policy, providing FBT exemption for EVs in company fleets and novated leases, has also had a halo effect on increased awareness of the advantages of novated leasing.”
A bonus is that Fleetpartners is in the midst of returning capital to shareholders.
“The ongoing buy-back program continues to support the share price with $43 million undertaken in 2H23.”
Fleetpartners shares are now more than 27% up since the start of the year.