The EV Stock Bubble Is Bursting

Good morning! It’s Monday, January 22, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Electric Vehicle Stocks Are Down Bad

Tesla’s stock is having a rough time right now. It’s down nearly 15 percent on the year and has lost nearly $100 billion in value in less than a month. But, if you’re a Tesla investor who believes in “misery loves company,” then you’re in luck because just about every other EV automaker is in the same shitty boat. From Bloomberg:

Tesla’s shares closed Thursday at their lowest since Nov. 9. Rivian Automotive’s stock is faring similarly after the Amazon-backed maker of electric pickups, SUVs and vans reported disappointing deliveries early this month — a common theme across the sector.

VinFast was the latest to come up short, saying Thursday that it delivered 34,855 vehicles last year, well shy of the 45,000 to 50,000 range the manufacturer had forecast. The market cap of the carmaker owned by Vietnam’s richest man, Pham Nhat Vuong, has plunged to $13 billion. For a fleeting moment less than five months ago, this was a $190 billion company.

China’s Nio, Xpeng, and Leapmotor all missed their annual sales targets for a second straight year. Nio’s US-listed shares have been battered the most of the three — they’re trading at the lowest since June 2020 — but Xpeng and Leapmotor are slumping, too.

Wait, folks. We aren’t even close to finished yet.

In Europe, Polestar is becoming more of a drag on its affiliate Volvo Car. After Polestar released disappointing preliminary results last week, analysts at Swedish bank SEB scrubbed the entirety of the value they were attributing to the spun-off company.

And in the US, the electric-vehicle SPAC bubble continues to burst. Lucid is trading at an all-time low after the luxury EV maker produced just over 8,400 cars last year, in line with a forecast the company cut twice. It’s lost enormous sums on each vehicle it has managed to make.

Fisker shares also are at a record low. CEO Henrik Fisker is ditching a direct-to-consumer sales strategy and seeking dealer partners after selling less than half as many Ocean EVs last year as were produced. The National Highway Traffic Safety Administration opened a defect investigation into the Ocean’s braking performance this month. In November, the company warned there were material weaknesses in its financial reporting.

Somehow, all of these companies have still fared better than the two we’re about to get to.

Two commercial EV makers that went public by merging with special purpose acquisition companies also are in dire straits. Nikola produced all of 42 trucks last year and is now worth less than $720 million. Canoo is still scraping by, more than a year and a half after issuing a going-concern warning, though its stock is yet another at an all-time low.

EVs are almost certainly not a flash in the pan, but the ramp-up of demand for electric cars is definitely lagging behind where a lot of automakers thought we would be at this point.

That’s OK for legacy automakers who also build ICE and hybrid vehicles, but for EV newcomers it is very clearly spelling disaster.

2nd Gear: Cadillac’s Performance EVs Are Coming

The Cadillac V-Series (even with the weird Blackwing naming debacle) has been at the forefront of American sporty luxury for just about two decades at this point, and as with everything else these days, it’s about to get all electric-y. Cadillac’s vice president John Roth told reporters that the brand “will offer performance variants no matter the propulsion.” From Automotive News:

General Motors’ luxury brand intends to have an all-electric vehicle portfolio in North America by 2030.

The V-Series is marking its 20th anniversary, having made its racing debut in March 2004. The first production V-Series was the 2004 CTS-V sedan. The subbrand is offered today on the CT4 and CT5 sedans, which include Blackwing variants and the Escalade large SUV.

U.S. V-Series sales rose 55 percent in 2023, Roth said.

When Cadillac does eventually make its fleet of electrified V offerings, they’ll go up in a crowded field of sporty EVs that are pretty much owned by the Germans, Koreans… and Tesla to a lesser extent.

3rd Gear: Waymo Go To Hollywood

Waymo said it has applied to the California Public Utilities Commission to expand its driverless service in Los Angeles. This new license would allow Alphabet’s autonomous car company, which operates all over San Francisco, to fully operate its fleet in LA. Right now, it’s just testing rides in California’s largest city, allowing new rides only by invitation. From Reuters.

The company posted on social media platform X that it would work with Los Angeles policymakers, first responders and community organizations to launch its ride-hailing service. It did not provide details on when its service will go live.

Waymo said this month it would begin testing its fully autonomous passenger cars without a human driver on freeways in Phoenix, Arizona, where it now offers rides in the metropolitan area. The company also aims to operate in Austin, Texas.

The company last year pushed back its efforts to develop a commercial autonomous trucking technology soon after autonomous driving software came under strong regulatory scrutiny.

It sort of feels like Waymo is taking advantage of the fact that General Motors’ Cruise, its biggest competitor, has paused all trips in the U.S. after an accident left a woman badly injured.

4th Gear: Panasonic Wants To Up Its Game

Panasonic’s CEO Yuki Kusumi said the Japanese company’s battery business has to focus on boosting productivity. He may be signaling that the Tesla supplier may hold off building a third battery plant in North America as demand for electric vehicles drops off. From Reuters:

The battery unit, Panasonic Energy, had previously said it aimed to decide on building the factory by the end of March.

But Panasonic Holdings CEO Yuki Kusumi said in an interview that a decision would be made only “when the timing is right”.

“I keep telling people we need to think about thoroughly raising productivity before setting up a third location,” he said on Friday at the company’s Tokyo office.

The comments come amid signs of cooling demand for EVs in the United States that have prompted some automakers, including General Motors and Ford to scale back production plans.

Panasonic Energy has a plant in Nevada and has broken ground on a second one in Kansas. In December it said Oklahoma – where it was previously exploring building a factory – was no longer a candidate site.

The Kansas plant is expected to take its annual auto battery capacity to 80 gigawatt hours per year. The final aim to to raise that to 200 GWh by early 2031.

Kusumi said his main instruction to the energy unit was to prioritise boosting production volume from its existing investment over deciding on the site of the third plant. Given the human resources requirements of a new plant, Kusumi said it was generally better to have fewer production sites.

He added there was room to raise production capacity by improving processes such as machine maintenance and that time lags due to changing circumstances happen in any business.

While consumer demand for EVs is growing worldwide, it has cooled in key markets such as the United States and Europe, and is not as profitable as industry executives had anticipated.

Higher interest rates have pushed many EVs out of reach for middle-income consumers who are also waiting for cheaper models now under development.

Kusumi said the company wanted its energy unit to improve its manufacturing so that it could generate profits without relying on the U.S. Inflation Reduction Act.

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