5G and Electric Vehicles

Nio VS Tesla

Both companies sell electric vehicles. 

One year ago, on 2 Dec, Nio was trading at USD 2.26. In a deal finalised in April 2020, the Chinese government injected USD1 billion into Nio. On 4 Dec, Nio was trading at USD 43.04. In contrast, Tesla was trading at USD 488.

We invested in Nio because we think that the Chinese market alone presents enough growth for Nio to eventually rival Tesla albeit, in a different market segment (especially with the Chinese government's policy support levers: purchase rebates and tax exemptions).

Quantumscape

Since Nio has run up considerably, we searched for upstream opportunities, and found Quantumscape. Quantumscape is not yet profitable but we think there is potential because it does solid state batteries. See HERE. Solid state batteries charge within 15 mins and don't explode. 

Quantumscape went from USD 12.95 on 5 Nov 2020 to USD 42.50 on 4 Dec 2020. The company is not making money yet. There is a risk that the company's technology does not pan out, or that it loses out to its competitors in the fight for market share. If that happens, our investment will disappear into thin air.

5G and EVs present growth opportunities for today, in the same way Microsoft, Apple, Amazon and Tencent did in the recent past. We missed out on the growth of Microsoft, Apple, Amazon and Tencent. Hopefully, we can catch this wave of growth to fund our retirement.