The International Energy Agency has said that it estimates 145 million electric vehicles on the road by 2030. Many companies and investors are going to reap the rewards if they find EV companies that are already ahead of the game in the electric vehicle and renewable energy sector. 145 million vehicles that range from cars, vans, trucks and buses are going to continue to become increasingly more available and the ramp up is in its infancy.
Tesla has shown the world how important the EV race is and that technology is going to be an enormous part of the transition from fossil fuels to renewable energy. More companies will follow this trend, some will fail and some will succeed. We have already seen some EV companies come into this space and get completely obliterated by the harsh reality of this industry. The EV race is not about automobiles, it is about technology. That is where companies like Tesla and Lucid thrive.
Could Lucid Group Be The Next Large Brand?
Lucid Group is a 3 division company that ranges from Electric Vehicles, Technology and Renewable Energy. Lucid’s Energy Storage System could actually become more profitable than its auto sales by 2030. That would be over $22.8 Billion in 2030 just based on their renewable energy division.
Lucid has a ton of potential and its technology and renewable energy division is being completely overlooked by analysts that are covering the stock. The amount of ratings for $LCID is very low and those price targets suggest Lucid should be trading around $38 which is a considerable amount because it is trading at $22 today. Based on stock price and market capitalization, Lucid Group is completely undervalued. Based on how the brand of Lucid is valued, that is also very underestimated.
Lucid has former Apple, Tesla and Intel employees among many other prestigious companies that have already helped create household brands. For many of the executives, this is not their first rodeo. Lucid will become one of the next great automakers, but it does not just end there. They will achieve tremendous things because of their product, technology, electric motor and their incredible team.
The EV Marketing Is Just Beginning To Heat Up
Lucid Group, Rivian, Polestar and Nio are already ahead of the game in a lot of ways in the EV race. Some of these companies developed their prototype and concept vehicle 7+ years ago and only now are just starting production. The EV race is very hard to get into and some of these companies have already been called out as frauds. However, there is a reason that some companies are trying to go all in on the EV race. It is because Tesla has shown that the EV total addressable market is absolutely massive.
The companies that will survive will need to have both a great product/brand and great technology and performance. We are already seeing a huge ramp up in competition as Sony and Honda have teamed up to create an EV. Which has been stated to most likely debut in 2025. Apple is also going to announce who will be building their EV in late 2022.
Although the EV market is very hard to enter, we are seeing tons of companies trying to put a lot of assets together to jump into this new industry. Tesla is head and shoulders above everyone else in the EV industry, but competitors are now starting to gain their footing and realizing how hard it is for production, manufacturing and delivering the best product to their customers.
Institutions Are Betting Big On Electric Vehicles
Investors continue to search for the next Tesla, could they be overlooking many companies because the next Tesla could be unachievable at this point? If we follow the smart money for a second, you will see an unbelievable amount of institutional investing into Lucid Group, Rivian and Nio. Amazon owns around 20% of Rivian, Lucid Group is backed by the Saudi Arabian PIF, and Tencent has a large stake in Nio. All of these companies have their faults, but they all have unreal potential to make a huge difference in the EV race.
Competition is great for industries, it creates better products for consumers and ramps up the EV infrastructure. Elon Musk has stated that Tesla needs the EV infrastructure to be built up. That is one of the reasons that he left some of Tesla's secrets open to the public so that more companies could help create charging stations and increase EV production.
My Thoughts On The EV Market
Tesla has a significant stranglehold on the EV industry and they do not plan to slow down. The global chip shortage was a bump in the road, but I believe it affects the competitors because companies like Rivian continue to burn around $1 Billion in cash per quarter. With that said, Technology is going to impact the EV race and companies like Tesla, Nio and Lucid have that tech.
I love that competition is starting to rapidly increase this race and the EV industry may become more expedited because of the crowd names getting involved. However, Lucid, Rivian and Nio will achieve very great things in the long run. I mentioned Polestar in this article as well, but that is a company that many people are looking at delivery numbers but are including hybrid vehicles in those delivery numbers. Polestar does have some potential and I do hope that they achieve great things as well. The EV market is in its infancy and early investors will have to ride the bumpy roller coaster in the near term but if your time horizon is 3-5 years, you will make an unbelievable profit and completely outperform the S&P 500.
Anthony Donati focuses on electric vehicles and renewable energy companies. He covers Lucid Motors news at Torque News. Please follow him on Twitter at @TheLucidVerse for daily Lucid Motors news. He has a degree in Business Administration with a concentration in Finance. DISCLAIMER: Anthony is a Lucid Motors (LCID) stock holder.
Images Courtesy of Lucid Motors Gallery