Daily Brief: Sony's Getting Into The EV Game, But Is It All Just A Stunt?

Daily Brief: Sony's Getting Into The EV Game, But Is It All Just A Stunt?

about 2 years ago3 mins

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Not content with releasing the festive season’s most coveted console, entertainment giant Sony announced plans this week to boot up its own electric vehicle (EV) business.

What does this mean?

Sony’s been test-driving the car industry for a while now: the company already makes sensors and electronic components for carmakers, and even whipped up its own EV prototype back in 2020 to show them all off. But this year, it’s going full throttle: Sony announced earlier this week that it’s launching Sony Mobility, a new company designed to break into the EV market. And to go along with that, it’s unveiled a state-of-the-art model kitted out with panoramic screens, seat speakers, and PlayStation game-streaming.

Why should I care?

The bigger picture: So much for the conspiracy theories.

Some analysts reckon Sony might simply be trying to market its tech to other EV makers without shifting its focus at all. And it wouldn’t be the first time, with high-profile companies like Google having spent years experimenting with cars without ever going to market. But this might not be the gimmick skeptics think it is. After all, the likes of Apple, Xiaomi, and Foxconn have all ventured into EVs in a bid to shore up their businesses in the face of slowing smartphone and PC markets. And since a few of Sony’s own electronics products are in a slump too, the entertainment giant might’ve had the same idea.

EV market

Zooming out: Carmakers want Tesla’s spot.

Traditional carmakers are flocking to the EV market too, all aiming to overthrow market leader Tesla. Just look at Volkswagen and Toyota: the world’s two biggest carmakers – which each sold about ten cars for every one car that Tesla sold last year – announced $170 billion in EV investments last month. And maybe they’re right to dream big: IHS Markit reckons Tesla’s 50% market share could drop to roughly 20% by 2025.

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JPMorgan Thinks That Stocks Will Keep Rising This Year

Stock markets image

We’ll have what they’re having: JPMorgan forecasted earlier this week that the world’s stocks will continue to climb this year.

What does this mean?

2021 was a perfect storm for stocks: demand for companies’ products and services bounced back as countries reopened, while the world’s governments were more than prepared to pump cash into their economies. So much so, in fact, that key stock indexes in the US and Europe rose by 27% and 22% respectively last year, up to near-record highs.

But JPMorgan thinks stocks have further to run yet, mostly because the risks facing the global economy – like stricter Covid restrictions and a Chinese economic slowdown – are either already “priced into” the markets, or simply won’t happen at all. What’s more, the investment bank reckons company profits will keep growing faster than expected and that inflation will cool down in the second half of the year – both of which should push stocks even higher going forward.

JPMorgan forecast

Why should I care?

For markets: Don’t get too comfortable.

It’s hard not to feel a little on edge, mind you: a key valuation measure of the US stock market’s 10 biggest companies is almost as high as it was just before the dot-com bubble burst in 2000. And with central banks likely to raise interest rates any day now, stocks are actually looking pretty vulnerable – at least in the short term. Wells Fargo thinks so, anyway: the bank just said it thinks the US stock market could fall 10% in the next few months.

Stock valuations

Zooming out: Gold’s old news.

If JPMorgan’s wrong about a drop-off in inflation, investors might increasingly turn to “stores of value” – assets that hold their worth over time. Gold’s been a top choice for… well, ever, but Goldman Sachs predicted this week that bitcoin will keep eating into the big dog’s market share as everyday investors increasingly adopt digital assets. And if that does happen, the investment bank reckons bitcoin could hit $100,000 in the next five years.

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