In the immortal words of The Wire’s Omar Little, “you come at the king, you best not miss.”
And, with numerous recent electric vehicle (EV) startups now struggling following blockbuster market debuts, maybe they’re beginning to realise that getting to the top isn’t as easy as it might seem.
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Challengers to the throne?
Tesla [TSLA] has reigned supreme over the EV space for years now. A focus on product and innovation in a once overlooked segment of the motor industry has propelled it to the top. Tesla’s roaring success, coupled with a global shift towards sustainable motoring, has led to a sharp rise in companies looking to get in on the action.
Last year saw two companies debut amid much fanfare — Lucid Motors [LCID] and Rivian [RIVN]. Both companies were dubbed ‘Tesla-killers’, and with the capital needed to scale rapidly, they looked to take on the industry leader.
Unfortunately, it hasn’t quite gone to plan so far.
Lucid reported losses of $2.6bn for the year in its Q4 earnings report this week. Even more worryingly, the firm lowered production targets, sending its stock into a tailspin. Supply chain issues were once again the obligatory scapegoat, but this wasn’t enough to prevent the company’s shares from slumping more than 15% since Monday.
Not to be left out, Rivian reported its own woes on Wednesday. An attempted $12,000 price hike on its electric truck was met with much ire from customers. Investors followed suit by selling off. Despite the company now backtracking, that still wasn’t enough to stop a 25% drop in its share price.
For all its faults, Tesla is still scaling at a pace these companies can only dream of. While Lucid and Rivian certainly offer tremendous growth value, neither of them looks set to capture Tesla’s throne.
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