QOTD: Does The Market Not Trust EVs?
One of my VerticalScope colleagues pointed out to me that Polestar's stock has taken a dive. This is a bit odd if you believe that Polestar is one of the EV companies that is having some success as EVs move more and more into the mainstream, as some believe.
So the question is, why would Polestar's stock slide? Of course, there are many factors -- it's not necessarily because the company sells EVs.
But I have to wonder -- does the market not trust EVs? Or maybe the market just doesn't trust smaller car companies? Or something else?
What say you, B and B?
[Image: Polestar]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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It's not a Polestar thing, it's an EV thing. The volume needed to reach profitability is so high there is simply no way all EV makers can be profitable without charging a significant premium. And charging a significant premium is a great way to remain low volume.
Investors are realizing more dedicated EV brands will fail as they pump billions into products that may or may not be competitive with Tesla. Frankly, I wouldn't be surprised if some Legacy brands collapse in the push to match Tesla profitability as well -- a push that seems impossible as long as dealers are getting a cut. I'm not necessarily predicting a large-scale industry-wide culling, but I'm also not about to deny one is possible.
I know Polestar doesn't have much brand awareness, but I've been watching it since the first coupe came out. Their issue is their branding. It's cold and aloof, and the collateral looks more like an annual report than a decision support piece. Very un-China but polarizing in its Euro-cool design.
Any EV other than Tesla is a significant pain to charge. This tilts the market heavily towards Tesla, leaving boutique brands with even smaller base on which to recoup R&D.
The consumers (not the "market") DO trust EVs, but those that are superior and well-priced,
THey buy millions of TESLAS and very few copies of all the other dozens and dozens of LEGACY BEVs.
Makes sense to me. None of these experienced makers have YET succeeded to design and build a better Tesla, that is ALSO PRICED COMPETITIVELY.