Hermes' Elbim: Electric vehicles can put credit investors in the fast lane

Key alternative investment for the future

Concern about climate change and air pollution is driving governments to focus increasingly on the environmental impact of the automotive sector, writes Ilana Elbim, credit analyst at Hermes Investment Management.

Regulation has become a key driver of innovation, accelerating the move away from the internal combustion engine (ICE) with electric vehicles (EVs) rapidly emerging as the key alternative.  Environmental concerns  The growing environmental issues - and regulatory response - have driven demand for alternative fuels on a global scale. Air pollution is a major issue not only in the West, but also in emerging markets, including India and China, which produced 43% of global EVs in 2016 and overtook the US for having the highest number of EVs on the road. Indeed, China has rolled out i...