Auto companies are continuing to double down on the electric vehicle (EV) trend, with more businesses than ever planning to transition entirely into producing only EVs in the future. This includes companies like Ford and General Motors, but it also seems that Bentley Motors (NASDAQ: BSY) is making a similar shift as well. Management just confirmed it plans to spend over $3.4 billion to turn the luxury car brand into one that exclusively sells electric vehicles by 2030.
Bentley said most of this money would be spent going into research and development, as well as upgrading the company’s British manufacturing plant. Bentley’s Crewe Campus in England remains Bentley’s only assembly facility around the world.
Bentley is currently owned by German carmaker Volkswagen, which announced a broader electrification plan in 2020 as part of its “Beyond100” transformation agenda. Among other things, this includes going carbon neutral by 2030, with Bentley’s transition into being a pure-EV company playing into that.
“Beyond100 is the boldest plan in Bentley’s illustrious history, and in the luxury segment. It’s an ambitious and credible roadmap to carbon neutrality of our total business system, including the shift to 100% BEV in just eight years,” Bentley CEO and Chairman Adrian Hallmark said in an official press release.
We’ve already seen countries around the world planning to ban gas-powered car sales, with countries like Norway planning to ban gas-car sales by 2025. Many other countries have vowed to make similar bans by 2030 or 2040. This is one of the main reasons why so many car companies right now are going so heavily into the EV market. They realize that, in the coming decades, the market for gas-powered cars might not exist anymore.
Other companies besides Bentley include Ford and General Motors, both of which are now creating their own line of electric vehicles that will be unveiled soon. Both companies fared incredibly well in 2021 following their shift into the EV market. While still not profitable or generating much revenue yet, investors seem more than happy to see car companies doubling down so heavily into this growth market.
Shares of Bentley were down 4.2% on the news. While normally this announcement would have led to a jump in stock price, Bentley’s seeing a similar reversal that other car and EV stocks, as well as the broader tech market, have seen so far this year. Examples include Tesla, which has been down more than 28% since 2022 began.
Although the short-term outlook on EV and growth stocks is diminishing, largely due to the upcoming interest rate hikes expected from the Fed, the long-term market potential behind EVs remains stronger than ever.
Bentley Motors Company Profile
Bentley Systems Inc is a provider of software solutions to engineers, architects, geospatial professionals, constructors, and owner-operators for the design, construction, and operations of infrastructure. The software enables digital workflows across engineering disciplines, distributed project teams, from offices to the field, and across computing form factors, including desktops, on-premises servers, cloud-native services, mobile devices, and web browsers. The solutions are delivered via on-premise, cloud, and hybrid environments. Its geographical segments are the Americas; Europe, the Middle East, and Africa; and Asia-Pacific. – Warrior Trading News
