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As global warming and resource depletion become more acute, green technology is no longer a story of the future, but offers compelling challenges and opportunities for those of us living in the present. 2024 is sure to bring rapid development and investment opportunities for green technology. This article takes an in-depth look at the latest technology trends, specific company case studies, and winning strategies as an investor.

What is Green Technology?

Table of Contents

Basics of Green Technology

Green technologies are those that enable sustainable economic development while protecting the global environment. For example, the photovoltaic market is expected to grow 251 TP3T year over year in 2023, and another 301 TP3T in 2024. This reduces the cost of energy by 101 TP3T to 151 TP3T, creating a market worth hundreds of billions of dollars.

Reasons behind the rapid growth of green technology

Policy push

Countries around the world are strengthening their policies toward carbon neutrality (virtually zero carbon emissions) as a response to climate change. In particular, major economies such as the European Union, the United States, China, and Japan have set goals to significantly reduce greenhouse gas emissions by 2030.

EU Policy: Based on its "Green Deal Policy," the EU aims to reduce greenhouse gas emissions by 551 TP3T by 2030 and to be completely carbon neutral by 2050. This policy includes increased use of renewable energy and stricter regulations to improve energy efficiency. The EU has also introduced the Carbon Border Adjustment Mechanism (CBAM), which requires environmental standards for imports from other countries and has a strong impact on the global market.
U.S. PolicyIn the U.S., the Inflation Reduction Act of 2022 has led to major investments in renewable energy technologies, electric vehicles, and energy efficiency projects. The Act provides tax incentives for wind and solar projects, and approximately $369 billion will be invested in green technology over the next 10 years.
Japan PolicyJapan has set a goal of reducing greenhouse gas emissions by 461 TP3T by 2030 under its "Declaration of Carbon Neutrality by 2050". To achieve this goal, the government is supporting the introduction of renewable energy and promoting the spread of energy-saving technologies, with particular emphasis on the spread of solar power and offshore wind power. In addition, a system has been introduced to encourage companies to offset their carbon emissions.

These policies strongly encourage businesses and consumers to make the transition to green technology, which is a key component of a supportive investment climate.

Improved investment returns

Green technology companies generate higher investment returns than other industries. The renewable energy sector in particular is growing rapidly, with average returns reaching over 20% in 2023. This growth has been accelerated by the following factors

Lower renewable energy costs: The cost of solar and wind power has declined dramatically over the past decade. For example, the cost of solar power has decreased by approximately 901 TP3T since 2010. This makes renewable energy sources cost-competitive with fossil fuels and a major option for electricity supply.
Corporate Strategic Investments: Many companies are finding new market opportunities by addressing environmental issues. For example, the energy company NextEra Energy has invested heavily in renewable energy and recorded a stock price growth of more than 301 TP3T in 2023. In addition, the electric vehicle (EV) market continues to grow, with Tesla leading the way, and the market is expected to expand beyond 2024.
Expanding the Green Bond Market: The "green bond" market for financing environmentally friendly projects is also growing rapidly, with issuance in 2022 reaching approximately $620 billion, up $20% from the previous year. The expansion of this market is indicative of the growing demand for sustainable infrastructure investments and a means for investors to provide stable returns.

Growing environmental awareness

Consumers are rapidly becoming more environmentally conscious, and whether a company or product is environmentally friendly has a significant impact on their purchasing behavior. Specific studies show that 781 TP3T consumers are willing to pay extra for environmentally friendly products. This trend is particularly evident in the following areas.

packagingConsumers are very interested in reducing single-use plastics and using recyclable packaging materials. In response, companies are tapping into the needs of environmentally conscious consumers through the growing use of bioplastics and recycled materials.
Sustainable Fashion: In the apparel industry, brands that use recycled materials and eco-friendly manufacturing processes are growing rapidly. Brands such as Patagonia and Allbirds, for example, are gaining traction with eco-conscious consumers by demonstrating a strong commitment to environmental protection.
Food Choices: The popularity of vegan and plant-based foods is growing rapidly, with the plant-based food market growing more than 301 TP3T year over year in 2023. Consumers are increasingly choosing meat- and dairy-free foods to reduce their impact on the global environment, and this market is expected to continue to grow.

Thus, consumers' growing environmental awareness is becoming an important factor for companies in their product development and marketing strategies, which in turn creates investment opportunities.

Green Technology Trends to Watch in 2024

Next-Generation Energy Technologies Accelerating Growth

By 2024, renewable energy technologies such as solar and wind power will enter a new stage. In particular, next-generation solar cells are expected to be more than 301 TP3T more efficient than conventional technologies and cost 501 TP3T less. As a result, renewable energy will soon account for 20% of the entire energy market.

offshore wind power generation: In Japan, offshore wind power projects are expected to expand by 2024 and to be responsible for 10% of the overall electricity supply. Particular attention is being paid to projects in the Hokkaido and Tohoku regions.

Smart Cities and Hydrogen Energy Open Up the Future

smart city: Smart cities utilizing IoT and AI technologies are rapidly advancing around the world. In Tokyo, a project to halve CO2 emissions by 2030 is also underway. This is expected to improve the energy efficiency of the entire city by 301 TP3T and reduce the cost of living by 101 TP3T.
hydrogen energy: By 2024, hydrogen energy technology is expected to be further developed and its use is expected to increase rapidly, especially in the automotive and aviation industries. The Japanese government is also aiming to double the growth of the domestic market by increasing investment in this technology.

Specific Investment Strategies and Tips for Success

Investment Areas to Watch Right Now

The year 2024 presents excellent opportunities for investors, as various sectors related to green technology are expected to show rapid growth. Two specific investment areas of particular interest include

1. renewable energy

Renewable Energy Sectoris a very attractive investment with the potential for stable long-term returns: in 2023, global renewable energy generation capacity is expected to increase by 8.31 TP3T year-on-year, and growth is expected to accelerate in 2024 and beyond. In this sector, solar and wind power are attracting particular attention, with a number of large power generation projects being launched, particularly in the United States.

solar power (generation): NextEra Energy, a leading U.S. solar power company, has experienced stock price growth of more than 601 TP3T over the past five years and is expected to continue that growth in 2024. Solar power is becoming more competitive in more markets due to technological advances and lower manufacturing costs, and new projects are expected, especially in South America and the Asia-Pacific region.
offshore wind power generation: Offshore wind power is growing rapidly, especially in Europe. The U.K. and Germany plan to meet more than 50% of their energy needs from renewable energy sources by 2030, a large portion of which will come from wind power. In Japan, offshore wind power projects are underway in Tohoku and Hokkaido, and are expected to make a significant contribution to the domestic energy market.

2. green mobility

green mobilityThe electric vehicle (EV) sector in particular, along with renewable energy, is one of the areas to watch in 2024. With automakers around the world shifting to EVs one after another, investment in this sector represents a great opportunity for future growth.

Electric Vehicle (EV) Market: By 2024, global EV sales are projected to increase by 30% year over year. In particular, the leader inTeslaand a major Chinese manufacturerBYDis driving growth in the sector and is expected to launch new EV models and innovate battery technology in 2024.Tesla will sell about 13 million EVs in 2023, and its market share is increasing. BYD is also expanding its market share in China, and the company could become the world's second largest EV manufacturer by 2024.
Charging Infrastructure: In parallel with the growth of electric vehicles, there is an urgent need to improve charging infrastructure. In particular, with government support through the "Inflation Control Act" in the U.S., more than 500,000 new charging stations are planned to be installed by 2025. Investments in this area also have the potential to generate significant returns in the coming years.

Managing Risk for Success

While investing in the green technology sector offers the promise of high future returns, there are also risks involved. Addressing the following two key risks is the key to success

1. policy risk

Growth in the green technology sector is strongly dependent on national government policies. Subsidies and tax incentives for renewable energy and green mobility play an important role as part of the carbon neutral policies promoted by national governments, but policy changes can pose a risk.

Government Policy Changes: A change in administration or a deterioration in the fiscal situation could lead to a reduction in subsidies for renewable energy or the EV market. For example, if tax incentives based on the "Inflation Control Act" in the U.S. are reduced in the future, the profitability of portfolio companies may be adversely affected. Therefore, investors should keep a close eye on policy developments in various countries to manage risk.

2. speed of technological innovation

In the green technology field, technology advances so rapidly that there is a risk that existing technologies will become obsolete as new technologies are introduced to the market. In particular, in the energy sector, the development of next-generation batteries and new materials may quickly eliminate current technologies.

Importance of R&D: The degree to which a company in which you invest focuses on R&D is an important factor in its long-term success. For example,Teslaand ... andNextEra Energyand others have large in-house R&D departments and invest vast amounts of money in the development of next-generation technologies. These companies are more likely to maintain a competitive advantage because they can respond flexibly and quickly to technological innovations.
Areas of rapid technological evolution: Technologies related to energy storage technology (batteries) and renewable energy efficiency are particularly fast evolving areas. Investors can minimize risk by investing in companies with expertise and a competitive edge in these technology areas.

Case Studies of Successful Green Technology Companies

Tesla's Global Strategy

More than just a manufacturer of electric vehicles (EVs), Tesla has firmly established itself as a global company at the center of the energy revolution. Its success extends beyond the EV market to the renewable energy sector, including solar power and energy storage solutions.

Success in the electric vehicle (EV) market: In 2023, Tesla sold approximately 1.3 million EVs worldwide, representing an increase in sales of more than 401 TP3T over the previous year. The company has established itself as a leader in the EV market with its Model S, Model 3, Model X, and Model Y models worldwide. compared to other automakers, Tesla has shown superior performance in reducing battery costs and improving mass production efficiency, especially in China and market expansion in Europe. Furthermore, Tesla's EV sales are expected to increase by an additional 301 TP3T in 2024 compared to the previous year.
Leadership in Energy Storage and Photovoltaics: Tesla offers energy storage solutions such as "Powerwall" and "Powerpack" and "Megapack" for industry, and these systems play a vital role in the stable supply of renewable energy. In particular, the energy storage market is expected to grow at an annual rate of 20% over the next decade, and Tesla has a large share of this market. Tesla's solar energy business is also growing rapidly, with its residential solar panels and "Solar Roof" systems receiving high praise. This enables individual households to generate and store their own electricity using renewable energy sources, making energy self-sufficiency a reality.
Vertically integrated business model: Behind Tesla's success is a "vertically integrated business model" that integrates manufacturing, sales, service, and energy supply in-house. This model enables Tesla to control product quality and streamline its supply chain while reducing costs. In particular, the company has an advantage over its competitors by managing its own operations, from battery manufacturing to vehicle assembly and the deployment of its "Supercharger" charging network.
Building a global charging infrastructure: Tesla has deployed its Supercharger fast-charging network worldwide, with more than 50,000 charging stations installed by the end of 2023. The expansion of this charging network is a key element in Tesla's EV proliferation. In addition, the company plans to open its Supercharger network to new EVs from other manufacturers, thereby diversifying its revenue stream and contributing to overall EV adoption.

BYD's overwhelming presence

China's BYD is the second fastest growing electric vehicle (EV) manufacturer after Tesla in the global automotive market. by 2024, BYD's electric vehicle sales are projected to increase by more than 301 TP3T year over year, giving the company a dominant global market share. BYD's success has been supported by its EV manufacturing, but also on the development of battery and hydrogen energy technologies.

Strengths in the EV Market: BYD is unique in that it not only manufactures EVs, but also produces its own batteries, the heart of EVs. This vertically integrated business model is driving cost reductions and technological innovation, similar to that of Tesla. In particular, BYD's lithium iron phosphate (LFP) batteries are cost-effective and safe, accelerating the spread of EVs in many countries; by 2024, BYD's EV sales are expected to exceed 3 million units, rapidly expanding its market share in China and abroad.
Diversified product line: BYD focuses not only on passenger cars, but also on commercial vehicles, electric buses, and trucks, which is one reason why the company is able to meet the diverse needs of the market. In particular, the introduction of electric buses in urban public transportation is a major strength of BYD, with the company's electric buses operating in more than 60 countries worldwide as of 2023. Growth in this sector is expected to accelerate further as governments pursue policies to decarbonize public transportation.
Evolution of Battery Technology: BYD is also a world leader in battery technology, especially the next-generation "blade battery," which is more durable and safer than conventional batteries. This battery technology enhances the user experience by extending the driving range of EVs and reducing the number of recharges. BYD also focuses on battery recycling technology, contributing to the realization of a circular economy.
Focus on Hydrogen Energy Technology: In addition to battery technology, BYD is actively investing in the hydrogen energy sector. In particular, the company is focusing on the development of fuel cell electric vehicles (FCEVs) and hydrogen infrastructure, and is strengthening its deployment in China as well as in overseas markets. BYD's fuel cell buses have already been adopted in several countries, and this technology is expected to become mainstream in the commercial vehicle market by 2030.
Competitive advantage in the global market: BYD has a strong base of cost-effective EV offerings and access to consumers worldwide through its proprietary battery technology. In addition, the company is strengthening its presence in Southeast Asian and South American markets, particularly in emerging markets, where it is looking to expand its market share. In these regions, BYD's low-priced models are a strength, and sales in these markets are expected to increase by 501 TP3T year over year in 2024.

Tesla and BYD are leading the green technology market with different approaches: Tesla continues to grow around the luxury EV market and is diversifying into energy storage and solar power, while BYD is penetrating a wide range of markets with its battery technology and low-cost EVs. BYD is penetrating a wide range of markets with its battery technology and low-cost EVs. The cases of these two companies illustrate the diversity and importance of their strategies for success in the green technology sector.

Summary: Winning with Green Technology Investments in 2024

The year 2024 is a year of accelerating green technology innovation and market growth. By following technology trends, learning from specific company examples, and investing strategically, you can achieve long-term success. Now is the time to enter the green technology space and reap the rewards of future growth.

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