The Next Big Theme: July 2022

Electric Vehicles

Up-and-coming Players Make Their Mark, Battery Tech Remains a Focus

Electric vehicle (EV) sales continue to surge, with companies topping historical sales. Recent figures show Chinese vehicle manufacturer BYD sold more combined electric vehicles and plug-in hybrid electric vehicles (PHEVs) than Tesla in the first half of 2022. BYD sold 641,000 of these new energy vehicles, a 315% increase over the same period last year.1 Comparatively, Tesla sold nearly 565,000 vehicles in the first half.2 However, June marked Tesla’s highest vehicle production in any month in its history.3 BYD and Tesla’s associations do not end there, as BYD announced that it would supply Tesla with batteries soon, potentially even later this year. On the topic of battery technology, Chinese EV automaker NIO recently held its second annual Power Day event. The company unveiled new charging technology featuring 500kW fast chargers in Europe and China by the end of 2022.4


Tech Giants Making Rapid Progress on Immersive Software and Hardware

Early players in the metaverse such as Meta Platforms, Apple, and Tencent reported notable advancements in the past month. On the software side, Meta launched a digital wallet service called Meta Pay. The service is essentially a rebrand of Facebook Pay, in that it has the same functionalities, though altered to be a universal payment method for goods and services using digital identities. Also, Meta Pay is expected to allow consumers to validate proof of ownership. On the hardware side, Apple’s long-rumored mixed reality headset may have an M2 processor and 16GM of RAM.5 Also, Tencent announced the creation of its extended reality unit. This division will specifically focus on spearheading all of the company’s metaverse-driven moves.


Demand Outpaces Supply

Boosted by rapid demand growth, lithium-focused companies around the world increased expenditures by 50% to record highs in 2021.6 The spending uptick can be attributed largely to exploration spending meant to help diversify future sources of lithium supply. Global investment is expected to remain strong throughout 2022. At the company level, leading lithium miner Albemarle Corp. revealed plans to build a processing plant in the United States with a production capacity of 100,000 tonnes, equivalent to the company’s entire current output.7 This plant represents a massive bet on the future of lithium demand and an all-electric future. With consistently increasing demand, miners are also continuing to adopt sustainable mining practices. Livent Corp. published its 2021 Sustainability Report, which among other ambitions, detailed the company’s progress towards achieving carbon neutrality by 2040.8


Top Biotech Firms Close to Approvals

Long-awaited approvals for innovative gene therapies are expected this year. Alnylam, a biopharmaceutical company focused on RNA therapy for genetic diseases, received Food and Drug Administration (FDA) approval for its next-gen Amyloidosis drug called AMVUTTRA (Vutrisiran). Following its public release, targeted for early July, the drug could reach peak sales nearing $1.8 billion by 2026.9 BioMarin, which specializes in rare genetic diseases, has a hemophilia gene therapy nearing approval in Europe. The European Medicines Agency recently granted conditional approval for Biomarin’s Roctavian. Final decision for approval from the European Union is expected in Q3 2022.10

Robotics & Artificial Intelligence

Industrial Robot Demand Bounces Back

In a recent report published by the International Federation of Robotics, industrial robots reported record preliminary sales in 2021 with 486,800 units shipped globally, a 27% increase from 2020.11 The largest leap in demand occurred in the Asia/Australia region, where installations were up 33% to 354,500 units.12 Demand in the Americas increased 27% with 49,900 units installed.13 And in Europe, demand grew 15% with 78,000 units installed.14 By industry, the strongest demand was in electronics and automotive with 132,000 and 109,000 installations, respectively.15 Also making industrial robot news was Amazon. The company introduced Proteus, its first fully autonomous mobile robot. Proteus can move large carts through warehouses and importantly, safely navigate around human workers, a testament to advancements in navigation technology. Amazon has other robotic developments in the works, such as Cardinal, a robotic arm that can transport up to 50-pound packages.16 Amazon hopes to deploy Cardinal next year– these systems could play a crucial role in reducing costs and improving productivity, adding up to a consequential positive long-term impact on earnings.

Internet of Things

Signs that Chip Shortages May Start to Ease

Global semiconductor equipment billings grew 5% during Q1 2022.17 At $24.7 billion, this growth supports positive forecasts in the industry and rising capacity.18 North America and Europe led the way in quarter-over-quarter jumps in equipment spending with both regions making domestic chipmaking a priority. Positive for manufacturers is that delivery times for semiconductors decreased by a day last month — as the semiconductor industry makes progress to overcome its pandemic-induced challenges.19 Also, the gap between when a semiconductor is ordered and when it is delivered fell slightly from an average of 27.1 weeks in May to 27 weeks in June.20


The following charts examine returns and sales growth expectations by theme, based on their corresponding ETFs.


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