To The Moon

Game over for EV stocks?

Most of the EV companies remain unprofitable and they are still burning more cash to build up on their infrastructure and expansion. A few EV companies (Lordstown Motors, Proterra, Fisker) have declared bankruptcy recently.

$Rivian Automotive, Inc.(RIVN)$  has just reported its Q2 2024 earnings that showed a wider loss as higher production costs continued to weigh on its financials. Rivian posted a net loss of 1.46 billion, or $1.46 per share, for the three months ended June 30, 2024, compared to a loss of 1.20 billion, or 1.27 per share, in the same period last year. (loss has increased by ~15%). In contrast, Rivian's revenue for the quarter rose to 1.16 billion from 1.12 billion a year earlier (only a meagre increase of ~3.5%).

The ongoing price war is likely to hurt their profit margin even further and they are likely to remain unprofitable in the near future. Like most new industries, eventually only a few companies would emerge victorious! .

Unlike BYD, $Tesla Motors(TSLA)$  or Li Auto, most EV companies still clearly have issues scaling up their production significantly. The competition in the EV market has intensified as numerous traditional car markers (Mercedes-Benz, BMW etc) are also investing and building more EV units. The key question is what is a fair valuation for these EV companies? How fast can it grow over the next few years? Like any new industry, eventually there will only be few survivors.

$Faraday Future Intelligent Electric Inc.(FFIE)$  $XPeng Inc.(XPEV)$  $NIO Inc.(NIO)$  

What do you think? Let me know your thoughts!

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