There is a storm brewing. A perfect storm. A storm of epic proportions, affecting the lives of millions of consumers, in many countries. It is the Electric Vehicle Storm.
Over the past 10 years, there has been an increase in attention consumers and automakers are giving towards EVs. In most recent times, and by recent I mean the past year or two years, there has been a new push by existing automaker such as General Motors (GM), Ford (F), Volvo (VLVLY), and Jaguar/Land Rover joining new EV startups deciding to go electric. Specifically, Volvo has committed that 50% of Volvo cars sold will be electric by 2025. Ford has announced they will only sell electric, hybrid, or plug-in hybrid cars emitting zero emissions by 2030. This sudden surge of new EV cars has been immensely aided by the Biden Administration's actions towards slowing climate change and toward an all-electric government vehicle fleet.
Putting the existing automakers aside, there has been a rapid explosion of new EV startups. Companies like Lucid Motors (CCIV/LCID), Fisker (FSR), Nikola (NKLA), Nio (NIO), Lordstown Motors (RIDE), and Xpeng (XPEV) are all releasing new models, with expected deliveries from late 2021 through 2022. Also, still on the playing field though not public yet is Rivian, an extremely attractive electric SUV and truck maker.
New EV Stocks and Startups
With all the new EVs, only a few will be direct competition to Tesla (TSLA). However, there are a few that pose as quite the formidable opponent to Tesla. Companies like Lucid Motors, Fisker, and ChargePoint are the most prominent. For the sake of time and importance, in this post I'll discuss the top contenders and the most notable companies.
Lucid Motors (CCIV/LCID)
Lucid Motors is perhaps one of the most interesting and promising of the EV startups. The company was founded and is led by Peter Rawlinson, who was the Chief Engineer on the Tesla Model S, and had perviously worked at Jaguar and Lotus. Joining Rawlinson is Derek Jenkins, who has experience at Mazda and Audi, Michael Smuts who was the previous CFO of Ford, as well as other executives with backgrounds at Qualcomm, Cisco, Samsung Electronics, General Motors, as well as a flurry of ex-Tesla executives. In their first model, the Lucid Air, an elegant, sleek car has been combined with impressive speed and power. The Air starts at $69,000, with a projected range of 500+ miles per charge, and up to 1,080hp from an all-electric motor. Reserves start at $300 for the base model, but quickly rise to $7,500 for the Limited Edition Air Dream model that starts at $161,500. When looking at the prices and features, its clear to see that Lucid is following the same pattern that Tesla did, with targeting the luxury market, then progressively releasing cars for the regular consumer market. There has already been over 7,000 reserves on the Lucid Air, which, once delivered, will equate to over $650 million in sales. Deliveries began the second half of 2021.
While you may be hesitant that Lucid won't be profitable due to the high price of their vehicles, they have released designs on Project Gravity, an SUV slated for a 2023 release. They also have plans to release a lower-level consumer sedan to rival the Tesla Model 3, by 2025. One of the largest differences between the Lucid Air and Tesla models, is that Tesla cars can only charge from Tesla charge stations. Meanwhile, Lucid has taken advantage of the large network of ChargePoint chargers, meaning they can save money by not building their own chargers.
Lucid is currently in the process of going public via an SPAC (special purpose acquisition company). The company currently trades under the ticker CCIV, then once the deal is completed, the company will trade under the ticker symbol LCID. In mid-February, when the deal was rumored and unannounced, shares of CCIV skyrocketed from the $10 IPO price to a high over $58. However, the valuation of Lucid was too high, and once the true details of the acquisition became public, shares of CCIV began a slow decline, consistently falling over a 2-week period. However, this decline in price makes it a perfect candidate for a long term play, as a stock you would hold over the next 10 year, 20 years, or even longer.
Fisker (FSR)
In some respects, Fisker is an attractive EV startup. However, is is technically not a startup. Fisker Automotive was founded in 2007, by Henrik Fisker. In 2011, they released the Fisker Karma, a groundbreaking electric car for the time it was released. The car was released with a price well over $100,000 and was targeted at the wealthier consumer class. The honeymoon phase was soon over, and in 2013 Fisker declared bankruptcy, as their battery packs were low-quality and there were many problems with the cars. But now, Henrik Fisker is back, and better than ever. In the way that Tesla and Lucid began by targeting the luxury automotive market, Fisker is targeting the average consumer market. Their all-new SUV, the Fisker Ocean, has a starting price of $37,499, with a range of up to 300 miles. Fisker has also created a new way of leasing a car. Through their app, users can lease their vehicle, drive it however much they want, then return it whenever they want, and Fisker will refurbish then re-lease the car.
Fisker had also gone public via a SPAC, and since July 2020 has steadily grown, save for a few declines. As of this writing, FSR is trading at $21.10. As with Lucid, this is an attractive purchase for a long-term play, and something that can help grow your net worth as you grow. Lucid and Fisker are both a smart dual-move. This is because each has their own individual strengths. Whereas Lucid is beginning with targeting the luxury market, Fisker is beginning with the average consumer market, then will likely reach the luxury market in a few years.
Rivian (not yet public)
Michigan-based automaker Rivian is defiantly worth a look, and they're not even public yet. Instead of creating another electric sedan or a crossover type vehicle, Rivian has focused on creating a sleek truck and SUV. Their truck, the R1T starts at $67,500 and their SUV, the R1S starts at $70,00, putting them in the same price bracket as the BMW X7 and the Mercedes-Benz GLS, both high-priced luxury cars. The R1S and R1T become more of an attractive option when looking at the specs and performance of the car. Both models can go 0-60 in 3 seconds, which is at the exact same level as the Lamborghini Urus, an expensive Italian sports SUV priced at $218,000. Both the R1S and R1T can go 300+ miles on a single charge, tow up to 7,700 lbs, and wade in 3ft of water. All this fun is compiled in a futuristic, car. Sure the price is expensive, but when you look at all the features, is proves to be worth the high price. Can the Urus do all that? I don't think so.
While Rivian is not yet public, they have made a smart decision and chosen to focus on production and development of their cars, before they have thousands of investors to answer to. Rivian is reported to possibly go public in a September 2021 listing. I recommend that you build up some money, then when the Rivian IPO lists, cash in your chips then let the market value of your shares grow over time. Again, this is a long term play. You can't expect to make money in a month on a company that hasn't delivered a vehicle yet.
Nio Inc (NIO)
China-based electric car company NIO is a very close rival to Tesla, at least in the Chinese market. China is the largest market for electric vehicles, and in the past 2 years NIO has really proved their value and worth. They have 4 models, which in a way makes them the Chinese version of Tesla. Their cars are very nice and high quality, and have served their customers well, even as Nio fights Tesla for the top spot of the Chinese EV market. There are solid signs of long-term growth in this company, and it can be reasonably stated that they aren't going anywhere anytime soon.
Over the past month, Nio's stock has slid from a high at $62 to a low of $37.43, as of this writing. This presents a perfect time for people looking to buy and play the long game. As with all companies perviously mentioned, there is solid growth for these companies, and even physical growth aspects for Nio, all of which will contribute to a long-term stock price increase. Even as Nio may be a buy right now, there is still a little more room for it to fall. A global semiconductor chip shortage, which is an instrumental part in the high-tech cars of today, has severely impacted Nio, and as an extension, the stock. Since the chip shortage is not likely to bounce back over the next couple trading days, there might still be room for the stock to drop. But as with any stock in a high-quality, long-term growth company, the further it falls the better it looks as a long term play.
No matter which way you spin it, electric vehicles are coming en masse, and they are here to stay. On top of existing automakers' promises to be all-electric, there is a recent flood of electric cars, which are all presenting themselves as viable candidates for long-term stock plays. There have been many ideas of which company will become "the next Tesla" but keep in mind that many three out of the four companies mentioned have yet to deliver cars to customers, and the 4th doesn't even sell in the US.
For the person who wants smart long-term stock plays, any one of the companies and automakers mentioned present as attractive investments. But keep in mind, stocks like these and tech industry stocks are extremely volatile long term, due to the nature of the industry and the rapid changes. But as we have seen in recent years and are expecting to see, technology is the future, and cars that combine technology with zero emissions are the future of the automotive industry.
*all information presented is for your own processing and any action taken is at your own expense. I am simply writing my opinion based on research conducted. Invest at your own discretion.
Comments