[비즈한국] An electric vehicle (EV) fire at an apartment complex in Cheongna, Incheon, has triggered widespread anxiety, causing used EV prices to plummet and leading some parking facilities to restrict EV access. The government has held emergency meetings on EV-related measures, advising voluntary disclosure of battery information while scrambling to devise future countermeasures.
In the stock market, EV-related stocks have shown high volatility. Generally, EV-related stocks refer to companies involved in the industry, such as secondary battery manufacturers, motor producers, and automakers. In particular, secondary battery stocks have historically moved in tandem with the broader EV theme as they are core components of these vehicles.
Last year, 'secondary batteries' were the hottest issue in the domestic stock market. An overheated frenzy centered on these stocks, with EcoPro086520, a flagship battery stock, even reaching the 1 million won mark to become an "emperor stock." However, market sentiment cooled in the second half of last year, leading to a downward trend for battery-related stocks. With global EV demand slowing down this year, there are concerns that companies already struggling with the "EV chasm" (a temporary stagnation in demand) will be hit even harder by the Incheon fire.
Consequently, securities firms are lowering their expectations by adjusting target prices for secondary battery stocks. Target prices for LG Energy Solution373220 were adjusted to between 370,000 and 390,000 won, while Samsung SDI006400 saw its target price lowered to the 420,000–480,000 won range.
On the other hand, some investors argue that this fire highlights the safety of domestic battery manufacturers and presents a buying opportunity. Domestic secondary battery stocks have reached yearly lows following Tesla’s disappointing second-quarter earnings report last month, compounded by the Incheon fire. Among retail investors, there is a growing perception that Chinese-made batteries, often used to cut costs, lack guaranteed safety, leading to predictions that the value of domestic battery manufacturers will rise.
Experts point out that it is misguided to focus criticism on the origin of the battery, the manufacturer, or a specific EV brand due to this fire. Han Byung-hwa, an analyst at Eugene Investment & Securities, noted, "EVs using lithium-ion batteries are exposed to relatively high fire risks regardless of the battery type, country of manufacture, or company," adding, "Because this is an unavoidable risk, we must acknowledge it and invest in building social systems to minimize it." Han further stated, "For the EV era to regain momentum, political leadership and social consensus to resolve these obstacles must come first. Once there is a catalyst to shift the currently retreating policies in the U.S. and Europe, the EV market will return to a growth mode."
Ultimately, the transition to an electric vehicle era for carbon reduction is an indispensable task for humanity. To overcome the growth slowdown in the EV market, which has entered a chasm phase, automakers and the battery industry have been working on price cuts and technological development. However, due to this fire, it appears that more time will be needed for demand to recover.
However, the outcome of the U.S. presidential election in November could be a variable. Former President Donald Trump has stated that he intends to lower energy costs, including electricity rates, by more than half by aggressively developing U.S. oil and gas resources. This is a signal that his administration would move away from the Biden administration's eco-friendly energy policies and focus on EVs. Conversely, Vice President Kamala Harris is expected to maintain eco-friendly energy policies and EV subsidies. Of course, despite the various concerns surrounding EVs, the long-term growth outlook remains bright, as policies from countries around the world to achieve global carbon neutrality goals will continue. Nevertheless, the situation changes if you are setting short- to mid-term investment goals. If you cannot generate profits, it is nothing more than an empty echo.