EVs have me feeling Emo

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Happy Wednesday, folks.

EVs have me feeling Emo

It turns out, not everyone in the world wants to/can own an EV.

Rivian and Lucid Motors reported disappointing earnings this past week, leading to 38% and 16% drops, respectively. Long gone are the days when being the “next Tesla” lead to sky high valuations.

The numbers are weighing on the companies’ strategies, too. Rivian laid off 10% of its workforce, and Lucid cut prices across its electric sedan lineup.

Luxury EV company, Faraday Futures, was on the brink of delisting after its own share price plummeted, and despite major financial restructurings in recent weeks, the company’s outlook is far from steady.

Things aren’t any easier for the traditional manufacturers looking to innovate and enter the space, various companies delaying their plans or canceling them altogether. Ford announcing that it cutting prices on its electric Mustang Mach-E because of low sales numbers could be taken as a positive at this point.

Demand is slowing worldwide, projected to hit just 20% this year after the 33% growth seen in 2023. That doesn’t scream exponential and inevitable.

Even the White House has lowered its initial goal of 60% adoption by 2030 despite tax incentives and infrastructure investments, and consumers are still deterred by the price tag and lingering charger availability concerns.

EVs were already a tough sell to investors given the capital and engineering chops the industry requires. It’s becoming harder to imagine any new startup being a Tesla.

Until the economic environment improves for consumers, don’t expect the current outlook for any company in this space to improve at all, and that’s assuming the current administration’s support for the space doesn’t come to a halt next year…

Not all is doom and gloom, though.

Unfortunately, most investors are influenced by the present more than they’d admit, making it much tougher to find capital.

The balance of power is firmly tilted in investors’ direction, and terms are favorable to say the least for those still willing to take a bet on the space.

Opportunities exist in niche markets like trucking and luxury, but these do require specialized knowledge and unique insights.

There will always be opportunities in software, from licensing repair technology to managing charging infrastructure. There is still a wide open sky of potential for entrepreneurs wanting to get into the space.

Admittedly, the EV space isn’t my forté. In fact, I’m sort of team #walkablecities anyways.

However, the current trend is still disappointing for those looking for any marginal improvement towards a greener, more sustainable future. Fingers crossed for 2024 to be the year that the tides turn.

EV manufacturers like Rivian and Lucid Motors face significant challenges, with disappointing earnings leading to major stock drops and workforce layoffs, reflecting broader industry struggles amidst slowing demand and reduced consumer enthusiasm for electric vehicles. Despite these setbacks, opportunities remain in niche markets and software solutions within the EV sector, suggesting potential for innovation and growth even as the broader market faces obstacles towards achieving a greener, more sustainable future.

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Cheers to another day,

Trey