With startups Rivian and Lucid delivering cars and challenging Tesla for supremacy, the electric vehicle war is just getting started – but who’s going to win?


It always fascinates me when my non-finance-minded friends tell me that finance is boring. As anyone who really pays attention can tell you, there are times when things in the financial world play out like a Shakespeare drama…and sometimes they even rise to the level of a Greek tragedy.

The stories that abound on Wall Street are enough to keep even those with short attention spans astounded for hours—all you have to do is find the drama.

For example, right now, there’s a war going on in the electric vehicle (EV) world, and it even comes with its own “David-and-Goliath” dynamic, meaning this story could heat up to be one of the hottest on Wall Street.

We all know that, when it comes to EVs, Tesla Motors (TSLA) is king.

Of the companies STRICTLY selling electric vehicles, Tesla is the most established, having been around for more than a decade now.

Not only that—the company has Elon Musk, one of the most polarizing and mesmerizing figures in the technology world, as its CEO.

Toppling Tesla from the EV mountain is going to take a LOT of work…

But there are two companies that are going to give it a try.

Eyeing The Electric Vehicle Throne

First is Lucid Group (LCID), which has been trading publicly since May and put out its first cars in October. Their first offering, the Lucid Air, just won MotorTrends’ Car of the Year, becoming the first EV to do so.

What makes this story so interesting is the fact that Lucid’s CEO, Peter Rawlinson, was once the VP of Engineering at Musk’s Tesla.

One can’t help but wonder if he brought any of Elon’s secrets over to Lucid with him…

The other company that’s going to try to bring the fight to Tesla is Rivian, a company that has the full power of Amazon behind it thanks to Jeff Bezos’ ownership of 20% of the electric truck company.

All three companies have a lot going for them…but will Rivian and Lucid have what it takes to topple Tesla?

Well, for now, I don’t think Elon is exactly shaking in his boots…

Especially when you look at how these companies have performed recently in the markets.

In good news for Tesla and its stockholders, the company rallied after CEO Elon Musk tweeted that the Model S Plaid (one of the most talked-about EVs on the market due to its increased range and speed ) may launch in China as early as March.

All it took was ONE three-word tweet from Musk to get the market moving.

When asked when the sedan would be available in China, he simply replied, “Probably around March”…and the stock went nuts.

Bad News For The New Guys

However, poor Rivian (RIVN) started sinking after its recent debut with a successful November 10th IPO, when reports of below-expectation battery performance rumors started making the rounds.

Those rumors turned out to be true, as a recent Amazon test of a Rivian electric van showed that the battery’s performance is below the EV startup’s claims.

According to a report in The Information, the battery drained 40% faster than usual if the van’s heating or cooling was on and the company said in its prospectus that the all-electric delivery vans would have a range between 120 miles and 150 miles, depending on size.

And this is the second piece of negative news rocking Rivian stock.

Last week, Automotive News unveiled that Rivian and Ford (F) (which also has a stake in the Rivian) had decided to stop their plan to develop a joint EV – before the established car company gave up its seat on Rivian’s board.

So, this week…Tesla wins.

With Rivian getting shaken and Lucid feeling the aftershocks, it’s clear investors don’t have a lot of faith in these two startups.

Will that change?

Maybe…

But for now, it seems that Elon Musk and his company will sit firmly atop the mountain that they created.

However, just because this battle has been won doesn’t mean the war is over.

This fight for electric vehicle supremacy is just starting, so don’t fold up your lawn chair any time soon. We’ve still got a way to go until this one is over.

 

“Swift as the wind. Quiet as the forest. Conquer like the fire. Steady as the mountain” – Sun Tzu