Even though Tesla’s (TSLA) CEO, Elon Musk, is often in the news about Bitcoin, the electric vehicle giant trounces the newcomers. Lordstown Motors (RIDE) must contend with Ford’s electric F-150. Lucid (CCIV) is still in the stock listing and merger phase while Tesla enjoys the biggest market capitalization.
Why is Tesla the best bet?
Having the biggest market capitalization among the EV players will give Tesla the liquidity it needs to outflank the competition. Lucid and Fisker (FSR) have start-up costs to overcome. It will take a ramp-up in production to achieve economies of scale.
Tesla already has the scale and the supply chain dominance to expand margins. Although the tax credits and bitcoin profits lifted last quarter’s results, Tesla may raise cash at any time to expand its business. The EV giant has global brand name recognition and a low-cost sales channel to manage. Those tailwinds will not go away.
The upcoming competition from Fisker and Lucid is a small concern. The EVs will try to beat Tesla on price. But they will need to increase R&D spending to come up with better designs. Tesla only needs to add minor design changes to come out ahead.
Tesla stock remains weak, for now. Once the selling pressure ends, consider this EV stock first.
