GUD chases $1b electric vehicle parts aftermarket – The Australian Financial Review

April 18, 2022 by No Comments

The electric vehicle “mechatronics” business, known as IM Group, is positioned strongly to take advantage of what GUD expects will be high double-digit, year-on-year growth in demand for electric vehicle parts and accessories, which are more complex than those for traditional internal combustion engines.

“GUD’s portfolio of brands provides services including electronic repairs and re-manufacturing, hybrid EV battery rebuilds, and repurposing BEV ‘waste’ batteries for stationary energy storage,” Macquarie concluded.

IM Group’s Gino Ricciuti said in his presentation that GUD aimed to scale and rapidly expand the electronics repair and remanufacturing operations. Mechatronics is where mechanics and electronics intersect. “Electric vehicles have more and more complex electronics than equivalent internal combustion engine cars,” he said.

He said genuine replacement batteries for Hybrid Electric Vehicles are expensive, and sit at about 25 per cent of the vehicle’s entire value at the time of failure.

GUD’s core businesses sell Ryco oil filters and air filters, Goss fuel pumps and hoses, Narva automotive lighting and electrical parts, and a range of disc brake products for traditional vehicles.

GUD estimates the value of the car parts aftermarket for electric vehicles in Australasia is around $50 million, and will rise to $1 billion by 2030 as more and more people convert to an electric vehicle.

Macquarie says GUD is well-positioned across all of its main categories, not just in the electric vehicle market. It estimates that the total number of vehicles of all types on the road will rise to 21.8 million by 2025, from 20.1 million in 2021.

The average age of vehicles is projected to increase to 10.9 years by 2025, from 10.6 years in 2021.

Investors are closely watching the early stages of the electric vehicle transition and trying to pick winners. The share prices of lithium miners have generally increased sharply on the ASX because of predictions about future demand for a mineral which is a core component of electric vehicle batteries.

Tollroad operator Transurban says the transition to electric vehicles should have broadbrush benefits for its operations.

Chief executive Scott Charlton said there would be a lighter touch on the roads and associated infrastructure when electric vehicles form the bulk of traffic.

“There’s less impact on the road itself,” he said.

There will also be less need for the industrial-scale exhaust fans and infrastructure inside tunnels.

Official figures from the Electric Vehicle Council earlier this year showed electric vehicle penetration remains low in Australia at 1.95 per cent of all new vehicle sales in calendar 2021.

Their figures showed 20,655 EVs were sold in Australia last year, up from 6900 in 2020. The Tesla Model 3 achieved 12,094 sales last year in Australia and is a clear No.1, with MG at No.2.



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