It is undeniable that one of the main parts of an investment thesis implies carrying out a sectorial analysis. Sometimes is rather difficult to forecast which direction a specific sector will follow, but at least it is absolutely essential to understand how the sector is structured, what the most relevant players are and what trends and risks could drive or derail its future performance.
Nice overview. I would add some additional data points. Bilia & GPI have estimated the maintenance cost of ICE vs. EVs using actual data from EV owners & show roughly the same maintenance costs. The service cost of AVs will increase due to the requirement of sensor calibration from any AV system to work. There are economies of scale but they are all local, like management & advertising. This has led to the dealers that are more clustered having higher margins & inventory turns, see Asbury vs. Autonation. Another observation is the low valuations the market has put on auto dealers has made share buybacks very accretive.
Nice overview. I would add some additional data points. Bilia & GPI have estimated the maintenance cost of ICE vs. EVs using actual data from EV owners & show roughly the same maintenance costs. The service cost of AVs will increase due to the requirement of sensor calibration from any AV system to work. There are economies of scale but they are all local, like management & advertising. This has led to the dealers that are more clustered having higher margins & inventory turns, see Asbury vs. Autonation. Another observation is the low valuations the market has put on auto dealers has made share buybacks very accretive.