To The Moon

EV narrative was so popular back in 2020 and early 2021. Tesla back then had became the meme stock for a big cap company, growing rapidly from 20 to 30 billion USD market cap company to over 600 billion USD market cap company. At one point, if I did not recall wrongly, Tesla almost hits a one trillion USD market cap.

Now the narrative is on AI. Anything related to Ai and ai chips is heavily bought. Just look at Nvidia and super micro computer and we saw that Nvidia is about to overtake apple as the second most valuable company in the world.

The question then is why did EV fall out of favour? It's not difficult to see that there are many EV companies springing out from china due to conducive policies that encourage the founding of EV companies in china. This explains the immense competition which subsequently sees byd cutting prices of EV and we saw narrative of Tesla losing market share in China. Tesla has also cut prices.

With an up and coming EV company, I.e. Xiaomi with it's person, home and car concept that leverages on its ecosystem of internet of things, existing EV car companies are feeling the pressure.

I expect the closure of a number of EV companies in China to bring the equilibrium back. Until an equilibrium is reached, EV narrative is likely to be edging on the negative side on stock prices.

Also, certain advanced country is seeing that Chinese car companies are leading the EV race and may decide to cut this ev sector by switching to a new technology. This too may not be good for ev narrative. Unless most countries can take a neutral stance, it remains to be seen if ev demand can return to the days of exponential growth.

Toyota ceo said that full transition to EV won't happen. This may be partly true if the leading advanced country tries to stop the EV sector from growing by encouraging a competing technology. It remains to be seen how fast and cheap can a competing technology replace and compete against EV.

I still edge towards a slightly more positive view towards a higher rate of EV transition. Upon consolidation of some EV companies, the sector supply should remain healthy without causing undue price pressure. This will then finally see a return of a healthier narrative on EV stocks.

As always, this should not be construed as any investment or trading advice.

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