When CEO Elon Musk said he took a big position in Twitter (TWTR), Twitter executives welcomed the investment. Musk then offered $54.20 per share for the company. The bid worried Tesla (TSLA) investors. The CEO appears deeply distracted. As the supply chain worsens, Tesla cannot afford to lose its focus.
Tesla stock staged an incredible rebound, bottoming at $700 in Feb. 2022 to over $1100 in barely over a month. TSLA stock could extend its sell-off, re-testing the $700-$800 low. Risks are higher than Tesla could return to the $600 level.
All EV makers like Lucid (LCID) and Rivian (RIVN) face supply constraints like the traditional automotive firms. Ford (F) and General Motors (GM) are not better off. They face multiple constraints. They have limited sales of ICE-powered vehicles due to a supply shortage. Their product mix has too few EVs.
In the longer term, GM and Ford could compete more effectively against Lucid and Tesla. They need only increase their advertising budget to attract customers.
China-based Nio (NIO) and Xpeng (XPEV) are not appealing at this time. China shut down Shanghai to bring Covid infection rates to zero. This disrupted the economy. It also hurt Nio’s production. Investors should avoid EV firms based in China as political and regulatory risks mount.
