(Yicai Global) July 25 -- China's new energy vehicle (NEV) sector will be the main line of investment the A-share market over the next few years, Lv Yuechao, mixed stock fund director at HFT Investment Management Co. said in an interview with Yicai Global.

Lv expects the auto sector to see a revolution redefine the industry in a similar way to how Apple's iPhone transformed the smartphone sector.

Shares related to the industry have seen prices rise for a while, with some increasing as much as five-fold over the last two years. When asked if the current price trend already reflects the growth potential for share prices in the NEV sector, Lv replied, "Clearly not yet."

New-energy vehicles have already received support on a national level and are considered a strategic emerging industry for the future. Investment opportunities in all aspects of the NEV sector are huge at present and for the coming years, he said.

The process of redefining the car is similar to how early smartphones redefined the mobile phone industry. Shockwaves will be felt, whether in the industrial world or on the capital market, and the trend toward the development of electric, internet-based intelligent vehicles will be irreversible, Lv continued.

"Tesla's Model 3 and its future upgrades are no longer just traditional means of transport, but large-scale, mobile intelligent terminals, data spaces and energy storage units that use electric power as their foundation," he added.

In addition to outlining a future development blueprint for electric cars, Lv also spoke of the enormous opportunities brought by the increased market penetration of NEVs.

Only 790,000 of the 88 million vehicles sold globally in 2016 were NEVs, representing a penetration rate of less than 1 percent. If the penetration rate increases from 1 percent to 10 percent, the room for growth in the sector will be startling.

In terms of the electric upstream and downstream segments related to the NEV sector, Lv is extremely optimistic regarding upstream resources. The supply and demand gap in 2019 or 2020 for lithium, a key raw material for NEVs, could be bigger than it is now.

Lv argues that new market entrants to lithium mining will face higher time thresholds. If a company is looking to establish a new spodumene mine, it will take over three years to begin production; while if the lithium is extracted from a salt lake mine, it will take more than five years.

The market share of leading stocks in the NEV upstream sector should increase, Lv said. Although upstream share prices grew almost five times in the past two years, their shares are far from reaching their potential.

As a fund manager, Lv says he will focus increasingly on the type of stock in which he invests. This time he is focused on the NEV sector and has already made some good profits.

The overall yield of HFT Investment's mixed fund was 13.96 percent as of July 17, ranking 79th out of 505 similar products, data from Wind Info showed.