Will the EV stocks continue on their downward spirals?

With rising awareness of global climate change, heightened pump prices and tightening emission controls in many countries, the trend of transition from conventional vehicles to EV appears to be irresistible. At the same time, the EV market is increasingly competitive, and with limited product lineups for choices, pricing has become the main tool to increase market share. As more electric car makers engage in price war to defend their market shares, it erodes the profit margin for every car maker. Elon Musk's warning that $Tesla Motors(TSLA)$  is almost reaching its "natural limit of cost down" is probably reflective of the overall industry too and cannot be more true that EV makers will have to innovate and differentiate in order to stay competitive.

With EV demands softening in China that is the largest market for many EV makers, $NIO Inc.(NIO)$  , $XPeng Inc.(XPEV)$  and $Li Auto(LI)$  are particularly feeling the heat, as their export markets have not been fully established, so that they depend heavily on their domestic Chinese market. Increasing supply as more conventional car makers jump onto the EV bandwagon and saturate the market is worsening the EV slump.

Similarly, $Rivian Automotive, Inc.(RIVN)$  is overly reliant on Amazon, which is also its strategic investor and largest shareholder, as Amazon accounts for sizeable deliveries from Rivian. With the e-commerce giant ordering fewer delivery vans than expected, the EV maker has to rapidly expand its customer base to fill the gap before it inflicts further damage to its growth.

I believe that continual innovation rather than price war will be required for long-term sustainability of the EV industry, as price war does little to improve overall profitability. I'll refrain from adding my EV exposure until the demand-supply re-establishes equilibrium.

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