Investors who bought up shares of Ford (F), Stellantis (STLA), and General Motors (GM) thought they invested in value. When Tesla (TSLA) announced price cuts for its electric vehicles in the U.S. and Europe, it just heated the competition.
The incumbent auto firms need to manage their core business, the rising recall costs, and invest in research to build their EV market. Ford does not sell many Mach-E units to record a profit. Its F-150 Lightning commands a high selling price as it attracts first-time truck buyers. Still, Tesla is about to release a Cybertruck.
Tesla could shake up the Truck EV space with the new product. It needs something new to outshine its mostly unchanged automobile line-up.
Rivian (RIVN) has serious pressures ahead. It canceled its manufacturing deal with Mercedes-Benz. This changes Rivian’s growth trajectory. Rivian must increase the output of its core product. It could take a few years before it achieves economies of scale. Before that happens, competition will increase from Tesla’s Cybertruck, Ford Lightning, and GM’s first-ever Silverado EV in 2024.
The fad in EV investing lost steam. Investors who bought EV stocks on the hype will need to wait for a short-lived rally before breaking even.
