How to start an investment conversation?

Weekly Investment Conversation Starters No. 105

Thanks for reading this newsletter, this week we talk about the slowdown in electric vehicles sales, quantum computing and brain-computer interface.

Three ideas to start a thematic investment conversation

1. Are Electric Vehicles running out-of-juice? 🚘🪫

EV sales hit 18% of global sales in 2023, but Q1 2024 sees first drop for Tesla and BYD. Is the slowdown coming for all EV manufacturers?

2. A quantum computing breakthrough 🧮🖥️

Microsoft and Quantinuum cut quantum computing errors by 800x, advancing commercial readiness for encryption and optimization.

3. Playing videogames, with your brains only 🎮🧠

UT scientists created brain-computer tech converting thoughts to movements, tested in gaming and aids disabilities like brain-controlled wheelchairs.

1️⃣ Are Electric Vehicles running out-of-juice?

Warm-up the conversation:

Did you know that currently the top 10 battery electric vehicle companies make up 65% of the overall market?

(Source: TrendForce)

Seen in Chartr / Genuine Impact this week:

• Electric Vehicles (EV) sales reached 18% of global vehicle sales in 2023, indicating a shift towards eco-friendly transport.
• But Q1 2024 saw the first decline in EV demand since 2020 for the most popular brands, Tesla and BYD.

Why should you know?

1. The dip is noticeable and has prompted Tesla for example to resort to multiple price cuts and advertising.
2. A YouGov survey indicates growing skepticism towards EVs' environmental benefits and concerns over cost and range.
3. Meanwhile hybrids are outselling EVs, with Toyota's Prius leading the charge.

What is the state of the EV market today?

• China leads with over half the world's electric cars.
• Battery cost drop has made EVs more affordable, potentially reaching price parity with gasoline vehicles by 2027.
• Goldman Sachs still predict EVs might represent half of all new car sales by 2035, highlighting a possible significant and permanent industry shift.).

Share an investment thought:

👉🏻 UBS CIO Long-term Investment Theme: Smart Mobility

Regulatory changes, consumer preferences and technological advances will likely lead to even greater electrification and automatisation of means of transport.

2️⃣ A quantum computing breakthrough

Warm-up the conversation:

Did you know that the foundation of quantum computing is that quantum bits can exist as 0, 1, or both simultaneously?

(Source: Quantum Zeitgeist)

Seen in GeekWire / Reuters this week:

• Microsoft and Quantinuum announced they have significantly increased quantum computing reliability by reducing errors by a factor of 800.
• This is a big step towards making quantum computers ready for commercial use, and offers new possibilities in data encryption, system optimization and materials science.

Why should you know?

1. They have tackled the problem of "qubit" errors, which can throw off quantum computing calculations.
2. This breakthrough brings us to Level 2 of Quantum Computing, where quantum systems can be operated resiliently.
3. Other tech firms like Amazon Web Services and IBM are also working on innovations to reduce errors.

How does it work:

• They challenged the traditional view that thousands of physical quantum bits (qubits) are needed for a single logical qubit.
• Through an error-correction algorithm, they achieved a highly reliable operation with only 30 physical qubits creating four logical qubits.
• This advance simplifies quantum computer construction, while improving quantum computations' reliability.

Share an investment thought:

👉🏻 UBS CIO Long-term Investment Theme: Enabling Technology

Enabling technologies like quantum computing, artificial intelligence, AR/VR, 5G, cloud and big data are the engine of the digital transformation and spending on their development should remain high.

3️⃣ Playing videogames, with your brains only

Warm-up the conversation:

Did you know that one of the earliest brain-machine interfaces was an electro-encephalograph used to compose music in 1965?

(Source: Robotics Biz)

Seen in University of Texas this week:

• University of Texas scientists have developed a non-invasive brain-computer interface technology that transforms thoughts into movements.
• This new tech is tested on video games for now but could also assist those with disabilities, with a brain-controlled wheelchair for example.

Why should you know?

1. The technology requires no surgery in comparison to other technologies.
2. It is simple, with no lengthy setups or calibration processes, thanks to machine learning algorithms.
3. It is showing potential for broader application for subjects with physical impairments.

How does it work?

• The subjects wear a cap packed with electrodes, hooked up to a computer.
• The electrodes measure electrical signals from the brain.
• A decoder interprets that information and translates it into action.

Share an investment thought:

👉🏻 UBS CIO Long-term Investment Theme: Medical Devices

Medical devices can assist in the treatment of many conditions and help reduce the risk of worsening of a treated condition.

About Investment Conversation Starters

Hand-picked for relationship managers and investment advisors, Weekly Investment Conversation Starters is a series of ideas to start a conversation with clients, spark their curiosity and gauge their appetite for thematic investments.

If you liked these, you can:

• Subscribe to receive my Weekly Newsletter directly in your inbox
• Consult the previous editions of Weekly Investment Convo Starters
• Ring my 🔔 and follow #InvestWithFunds for more stories about these long-term investment themes

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