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The next Tesla is proving hard to find

2021-12-26T23:02:39.956Z


Like Tesla, several electric vehicle makers are struggling with their share prices soaring. Watch a Tesla in "full autonomous driving" mode 4:09 (CNN Business) - Finding the next Tesla in the electric vehicle market is proving difficult. The share prices of several upstart electric vehicle manufacturers have skyrocketed in recent years as investors searched for the next company to revolutionize the auto market. But they have all struggled recently, as has Tesla. Lucid, which went publ


Watch a Tesla in "full autonomous driving" mode 4:09

(CNN Business) -

Finding the next Tesla in the electric vehicle market is proving difficult.

The share prices of several upstart electric vehicle manufacturers have skyrocketed in recent years as investors searched for the next company to revolutionize the auto market.

But they have all struggled recently, as has Tesla.

Lucid, which went public on the Nasdaq in July after a deal with SPAC, had good news: Its first car, the Lucid Air, won MotorTrend Car of the Year honors and was certified as having a range of 837 kilometers. on a single charge, the longest of any electric vehicle. But the company has also revealed that it faces subpoenas from the Securities and Exchange Commission on some of its claims and the SPAC settlement, and the shares are down from a November 16 high.

Electric truck maker Rivian was highly successful with its November IPO, also winning the Truck of the Year honors from MotorTrend.

Rivian won the race to be the first all-electric pickup to hit the market.

The shares jumped 29% from the IPO price on their first trading day and gained another 71% over the following week.

  • Are US electric car plants ready for large-scale production?

Rivian was briefly the third most valuable automaker on the planet, behind only Tesla and Toyota, even though it has yet to report sales when it went public.

When it finally reported on its first sales on December 16, they fell short of expectations, with the company citing the same chip and parts shortage that haunted the rest of the auto industry.

Shares closed Thursday 44% down from that pre-report high, and the sales report also turned out to be a hurdle for Lucid shares.

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Even Tesla, which became the sixth company to reach a market value of $ 1 trillion earlier this year, has faced recent problems. The shares sank as much as 27% from an all-time high set between Nov. 4 and Tuesday, before a weekend rally lifted them back above the $ 1 trillion mark. Still, it is trading 13% below its all-time high.

Part of the recent problem for EV stocks is the apparent demise of the Biden government's social spending bill, which had a number of advantages for the EV industry, including improved tax credits for buyers that would have allowed automakers charge more for vehicles. The bill also includes money for a network of fast-charging stations, which would have responded to concerns from potential EV buyers about running out of power on the road.

"That was a blow to EV investors," said Dan Ives, technology analyst at Wedbush Securities.

"For incremental demand in 2022 and beyond, EV tax credits are a 15% swing factor in demand."

  • This will be the first road in the world that will recharge electric vehicles on the move

But much of the drop in EV stocks took place before Senator Joe Manchin said last week that he could not support the legislation, putting its future in serious doubt.

Much of the drop is due to continued announcements from established automakers such as Volkswagen, Toyota, Ford and GM of additional investment plans for electric vehicles. The concern is that even if consumer preferences and stricter environmental rules are about to create a massive shift from gasoline-powered to electric vehicles, independent electric vehicle companies will not necessarily win the battle.

"There will be losers in the battle for EV market share," Ives said.

"Rivian is coming out the door with a short drop in delivery, that couldn't have come at a worse time. It's a dark cloud for manufacturers of pure EVs. And investors have a lot less patience with any missteps from execution".

Tesla has grown to the point where it is profitable and large enough to grow even in the face of increasing competition from established automakers.

You project sales growth of 50% or more this year and into the future.

And stocks have mainly weathered declines in the sector, rising 51% year-to-date.

  • Ford makes its largest manufacturing investment to build electric vehicle factories

While that's just a fraction of Tesla's 743% share gain in 2020, it's better than most established automakers, plus Ford, whose shares are up 131% this year after posting gains. significant in their own efforts in electric vehicles.

The two most troubled EV stocks, Nikola and Lordstown Motors, lost 27% and 80% in value, respectively, as of Thursday's close, though Nikola's shares rose 18% Thursday after announcing that he had finally made his first truck delivery.

But earlier in the week, Nikola agreed to pay a $ 125 million fine to settle the charges.

Trevor Milton, its founder and former CEO, misled investors.

Milton was forced to resign in September 2020 after questions first surfaced about the company's claims.

He now faces federal criminal charges.

The founder and CEO of Lordstown was also forced to resign, and the company has expressed doubts that it will be able to stay in business.

  • Elon Musk doesn't want the U.S. to keep spending money on electric vehicle efforts

The trouble those companies had in delivering on their initial promises means companies like Lucid and Rivian will have to do more to prove themselves before investors fully embrace them, Ives said.

Tesla electric cars

Source: cnnespanol

All news articles on 2021-12-26

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