U.S. EV Sales - It's Off to the Races

Psalm Chapter 90 verses 2 and 4 state, "Before the mountains were born or you brought forth the whole world, from everlasting to everlasting you are God. A thousand years in your sight are like a day that has just gone by, or like a watch in the night."

As a Christian, there are a lot of interesting discussions that relate to questioning God. I like this Bible verse as it answers some of those questions. God is the ultimate sovereign being above all of humanity. He is the creator of the universe, space and time, earth, and anything else that is in our physical discovery. The easiest question is if Jesus Christ is supposed to come back again, then why hasn't he? God's time is very different than my daily schedule and God's desire is for none to perish in hell, but for all to accept Him - He is giving everyone a chance at eternity!

Time is a very challenging item with respect to investing. This is especially the case with respect to newer entrant companies looking to innovate beyond current legacy incumbents. There is no better example of this today than the EV revolution. While it is always tempting to think ahead five years or so and envision the success of newer innovators, the reality is it will continue to take time before the market recognizes who the true winners will be.


As some of my members know, I am covering the EV revolution that is upon us through my EV Pretenders database. 2022 is an important year as many of the leading EV automotive OEMs are now in full-effect with their production and sales in the U.S. Behind the paywall, I tend to focus on companies at risk of going bankrupt over the coming years as there are plenty. Today, I think it's now prudent to begin focusing on the leaders that will truly compete across the market.

These include Tesla, Inc. (TSLA), Ford Motor Company (F), General Motors Co. (GM), Rivian Automotive, Inc. (RIVN), and Lucid Motors, Inc. (LCID). The data flow is improving for these companies, and this piece is the beginning of deconstructing the progression of the EV revolution for investors.

Key Takeaways

The key takeaways today relate to scale and opportunity. TSLA is the clear leader when it comes to scale, while F and the others are all looking to play catch-up. Not all legacy automotive OEMs provide good transparency on their make/model vehicle details and this is a reason why companies like Volkswagen AG (VWAGY), Toyota Motor Corp. (TM) etc., are not currently included. I'm aware of industry data sources for U.S.-based EV production and sales across all models and makes, and I'll be improving access to this information over time. For now the focus is on those with more accessible data and information.

TSLA doesn't break out their U.S. Production and Deliveries for its quarterly information. Globally, the company has surpassed the key one million milestone for both metrics. Despite the lack of transparency for the U.S., we generally do know that U.S. Revenue is about 45% of the total of the LTM period, and have similar information for past years. As a proxy, U.S. Delivery Total information is included to benchmark the current U.S. market leader against its peer group. YTD, TSLA is near 485,000 U.S. Vehicle Unit Deliveries.

While I don't necessarily believe that either F or GM are guaranteed to be a top EV market leader over the long-term, I do respect their data and information that is pushed out on a monthly and quarterly basis respectively. It makes it very easy for investors to have transparency on each company's newest EV products.

For F, the company now has three different EV vehicles in production including the Mustang Mach-E, F-150 Lightning, and E-Transit commercial vehicle. On an annual and YTD basis, only the Mustang Mach-E has enough data to begin illustrating trends. F was successful in scaling the Mach-E to just over 27,000 sales in the U.S. in 2021 and is seeing acceleration with YTD totals just above 32,000 through May 2022. Overall, YTD, F has sold nearly 35,000 EVs across these three makes, or approximately 7% of TSLA's total in the U.S.

GM is lagging F a little when it comes to getting their models out, with the Hummer EV Pickup beginning production in Q4 of 2021, the Cadillac Lyriq beginning production in Q1 2022 and the BrightDrop Zero 600 expected to begin production later this year. When all is said and done, the company will have four makes available in the U.S. this year. YTD, GM has sold just over 16,000 EVs, a little less than half of F's total, and only about 3% of TSLA's total. I don't see the Bolt EV becoming a substantial player over time either, despite management's bullishness for the next two years.

RIVN is one of the new market entrants vying to win substantial EV market share over time. The company already has three makes/models being produced including the R1T, R1S, and EDV 700 commercial vehicle. RIVN was originally targeting upwards of 50,000 Vehicles Produced for 2022, and has since scaled this back to 25,000 Vehicles Produced for all of 2022. The supply chain disruptions may end up being a blessing in disguise for companies like RIVN and LCID as they are able to take their time further refining their production processes and work through a lesser amount of initial recalls as part of the process.

LCID similarly to RIVN was expected to deliver a much higher amount of vehicles during 2022 - 20,000. The company has guided that it now expects to delivery 12,000 - 14,000 vehicles instead. A key distinction for LCID is that the company is currently producing only one make in the Lucid Air. The Lucid Gravity is expected to begin production next year, and is expected to be a key driver for the company's growth over the mid-term. Execution will be important here, but LCID is already making waves through the companies luxury brand quality.

Why it Matters

For investors, this is a tremendous time to be focused on the automotive manufacturing industry through the EV revolution. As can be seen by the data, the stakes are really high and aside from TSLA, second place is entirely up for grabs in the U.S. market. F and GM have an early lead on both RIVN and LCID, but these companies are initially facing a high rate of cannibalizing their current makes and models, while both RIVN and LCID are building entirely new brands competing directly against traditional makes and models.

There are lessons to be learned from other markets to observe currently, especially from the used vehicle sales market. Companies like Carvana, Co. (CVNA), Shift Technologies, Inc. (SFT), and Vroom, Inc. (VRM) have fallen hard from their SP highs to parity with respect to EV/Sales multiples against traditional peers. This begs the question as to how companies like TSLA, RIVN and LCID will be valued over time. TSLA, RIVN, and LCID all have various elements of their business that are unique and can justify premiums against traditional automotive OEMs. That being said, execution will be key, and this will be driven by the strongest innovators.

15 views0 comments