Electric vehicles are no longer the main way to compare carmakers, with self-driving cars now the main race over the coming years, according to JPMorgan.
The investment bank reckons Daimler (ETR:DAI), Stellantis NV (NYSE:STLA, EPA:STLA), Renault and Volkswagen Group (XETRA:VOW) "will benefit the most from this trend" and they are its key picks among the traditional automotive original equipment manufacturers (OEMs), a group that also includes BMW, Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), Toyota, Mazda, Honda, Hyundai and Kia.
"Electrification is no longer a differentiating factor amongst OEMs, in our view," the US investment bank said.
"Rather, cash generation and the race into autonomous driving will be over the coming years," JPM said in a note to clients on Monday.
Looking at the auto market in the past year, the analysts said it was becoming "increasingly evident" that the traditional OEMs are using their strong free cash flow to "speed their way into electrification and autonomous driving to compete against new start-ups".
Not including Tesla, the start-ups include Lucid Group Inc (NASDAQ:LCID), Rivian, XPeng, Li Auto, Fisker, NIO Inc (NYSE:NIO), Proterra, Lordstown Motors and Arrival SA (NASDAQ:ARVL).
There was a stark contrast in the shares prices of this group of new or recently launched electric vehicle start-ups versus the combined market cap of the traditional OEMs between now and last year, with the old timers remaining fairly stable but the newcomers losing almost a third of their value - although they have been chewed up among the wider tech sell-off.
Examples of the OEM transition were given, including VW finally managing to launch its ID family of EVs, stabilizing its distribution channels in China and carrying out important software updates on the cars to allow around 70,000 of the EVs to be sold in China; Renault launching the Dacia Spring in the European market at an "extremely competitive price" and becoming the third bestselling EV in Spain within three months; North American players GM, Ford and Stellantis now offering "a very clear strategy" of launching their electric pick-up trucks by 2024, competing head to head with any new start-up in the region such as Rivian.
Looking at the premium OEMs, such as BMW, Mercedes and Audi, all have pledged to have their product portfolio electrified by 2024/2025, allowing the brands to compete across all regions.
Based on the communicated launch targets and the current EV product cycle offered in the market, JPM said VW and Volva have set out the most aggressive electrification targets, with Volvo intending to reach 50% battery EV and 50% plug-in EV share by 2025 and 100% BEV share by 2030, whereas VW has a 20% BEV mix target for 2025 and more than 30% in 2030.