Automotive - Distribution of EV financing records positive trend until Sept24

Automotive - Distribution of EV financing records positive trend until Sept24 Electric vehicle financing is increasingly being noticed by financing companies or multifinance. The distribution of electric vehicle financing has also recorded a positive trend until September 2024. Mandiri Utama Finance (MUF), for example, recorded financing for electric vehicles (EVs) and hybrid cars reaching IDR682 bn. This figure grew by 368% compared to the same period the previous year, which reached IDR145 bn. The financing of electric vehicles during that period contributed 4.3% of MUF's total financing, which is higher than the same period last year at 3%," said MUF President Director, Stanley Setia Atmadja. Stanley stated that MUF targets the portion of electric vehicle financing to reach 5% of the total overall financing throughout this year. (Source : Kontan) Comment : Despite the current limitations in charging infrastructure, existing ICE vehicle owners are expressing increasing interest in transitioning to EVs. This shift in consumer sentiment can be attributed to several key factors: government subsidies, significant dealer discounts, an anticipated low-interest rate environment, and attractive incentives like free home charging stations. These factors are poised to drive consistent growth in EV demand. As major EV manufacturers like BYD and other brands continue to expand their production capabilities and supporting infrastructure, the competitive landscape between ICE and EV vehicles is set to intensify. This increased competition will likely accelerate the development of the domestic auto industry. On this backdrop, we maintain an Overweight stance on the automotive sector.