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By Victor Golovtchenko

With the advent of electric vehicles, stocks of publicly listed corporations which are participating in the electrification of the global car fleet have been one of the most popular investments during this cycle. Shares of Tesla have skyrocketed over 30 times since the beginning of the pandemic, Chinese EV makers gained momentum alongside for the ride, and the triad of the biggest EV makers recently got joined by Rivian and Lucid.
As stocks of EV makers have skyrocketed over the past 20 months, investors are starting to ponder how high can the shares of these companies go. Given the fact that the transformation of Internal Combustion Engine (ICE) cars into EVs is relatively slow, the rise of the electric car stocks, has been anything but. It took 24 months for Tesla to join the trillion-dollar club from being a $50 billion stock in November 2019.
The scale of the rally of EV stocks shouldn’t be surprising – the forward-looking market is discounting future growth of the sector and is currently betting that EV-focused car manufacturers have enough leverage over traditional automakers to make the transition to sustainable transport a massively profitable endeavor.
But for the sake of comparison, our team at ThinkMarkets has compiled some charts for our clients to look at before they decide whether it’s worth jumping in on the EV bandwagon. Our first duo of charts is the market capitalization of the top 5 EV makers and the top 5 conventional auto manufacturers. For the sake of convenience, we have decided to include hybrid makers into the ICE group, as the cars they manufacture are not fully electric.

Among the EV makers, Tesla is an outlier – the company has not only manufactured the most cars, but it also has the strongest brand, and a star CEO that also happens to be the richest man on Earth as of writing. Tesla is the only company that joins mega-cap tech-behemoths in the trillion-dollar club currently comprised of Amazon, Apple, Google, Microsoft, and the outlier Saudi Aramco which can’t be traded on the US market.
With Rivian haven’t yet delivered a single car, it’s second spot on the list is impressive. The firm managed to focus on what it calls adventure electric vehicles and stands out with a lineup of two models and plenty of reservations coupled with investments from none other than Ford and Amazon.
Lucid is yet another player in this market that deserves attention. While the company has just started delivering the first luxurious Lucid Air Dream Edition cars, the firm holds promise to take the fight to Tesla at some future point with a more mainstream product. That said, the cheapest car in the company’s line up comes in at $77,000 and is hence competition to the Tesla Model S.
As to the Chinese automakers that wrap this list up, their presence in the sphere is limited by geography only for the time being. Both firms have ambitions to expand into the European market, where EV adoption seems to be leading the way with strict emissions standards from EU authorities. Also, unlike Rivian and Lucid, both NIO and XPeng have delivered over 80,000 cars this year. While paling in comparison to Tesla, their fleet is still much larger than those of Rivian and Lucid as we will find out later.

The scale of conventional auto manufacturers is a different story when it comes to numbers on the streets, but when it comes to market cap, the firms are not that big. Traditional car manufacturing has been associated with thin margins and significant capital costs. Only looking at the market capitalization of these companies makes one question the narrative that the future is electric, but as stricter emissions standards become the norm across the world, any doubt about our sustainable transport evaporates quickly.
Even when combined, Toyota, Volkswagen, Chinese giant BYD, Daimler, and General Motors are still smaller than the market cap of Tesla. At the same time, comparing the valuation of Daimler which delivered 1.6 million cars to the one of Lucid (technically another luxury automaker), begs the question – do cars delivered even matter in the current state of the market.

As we can see, the market cap of the publicly listed ICE/hybrid automakers amounts to just a smudge above the market cap of the 13 EV manufacturers that are now valued at $1.4 trillion (still primarily thanks to Tesla). Only time will tell whether these valuation numbers for the EV automakers make any sense for a long-term investment. That said, we will conclude our article with a face-to-face comparison between deliveries of EVs and conventional ICE cars or hybrids side by side. As you can see the figures for 2021 are quite significantly different, and the EV transformation is just starting with a very long way to go. The main dilemma for investors in this sector is whether to believe that traditional automakers will fail in the development of EVs that are competing well against the likes of Tesla, Rivian, Lucid, NIO, and XPeng.


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