The electric vehicle “mechatronics” business, known as IM Group, is well positioned to take advantage of what GUD expects to be double-digit, year-over-year growth in demand for parts and accessories for electric vehicles, which are more complex than those of traditional internal combustion engines.
“GUD’s portfolio of brands provides services including electronic repairs and refurbishments, hybrid EV battery rebuilds and the reuse of BEV ‘waste’ batteries for stationary energy storage,” Macquarie concluded.
Gino Ricciuti of IM Group said in his presentation that GUD aims to rapidly scale and scale electronics repair and refurbishment operations. Mechatronics is the intersection of mechanics and electronics. “Electric vehicles have increasingly complex electronics than equivalent internal combustion engine cars,” he said.
He said original replacement batteries for hybrid electric vehicles are expensive and represent about 25% of the vehicle’s total value at the time of failure.
GUD’s main businesses sell Ryco oil filters and air filters, Goss fuel pumps and hoses, Narva automotive lights and electrical parts, and a range of disc brake products for traditional vehicles. .
GUD estimates that the value of the aftermarket auto parts for electric vehicles in Australasia is around $50 million and will reach $1 billion by 2030 as more people convert to an electric vehicle .
Macquarie says GUD is well positioned in all of its major categories, not just in the electric vehicle market. It estimates that the total number of vehicles of all types on the road will increase to 21.8 million by 2025, from 20.1 million in 2021.
The average age of vehicles is expected to increase from 10.6 years in 2021 to 10.9 years by 2025.
Investors are watching the early stages of the transition to electric vehicles closely and trying to pick winners. Share prices of lithium miners have generally risen sharply on the ASX on forecasts of future demand for a mineral that is a key component of electric vehicle batteries.
Toll-road operator Transurban says the transition to electric vehicles should have general benefits for its operations.
Chief executive Scott Charlton said there would be a lighter touch to roads and associated infrastructure when electric vehicles form the bulk of traffic.
“There is less impact on the road itself,” he said.
There will also be less need for industrial-scale exhaust fans and infrastructure inside the tunnels.
Official figures from the Electric Vehicle Council earlier this year showed EV penetration remains low in Australia at 1.95% of all new vehicle sales in calendar year 2021.
Their figures show 20,655 EVs were sold in Australia last year, up from 6,900 in 2020. The Tesla Model 3 had 12,094 sales last year in Australia and is a clear No. 1, with MG at No. °2.