Rare Earth AdvisoryNEWSLETTER
Rocky Thoughts for a Rocky Road
“Too S3XY for a short”
Tesla’s disruptive approach to car manufacturing has transformed prospects for electric vehicles, shifting them from luxury to mainstream. In keeping with Rare Earth Advisory’s holistic approach, we thought it would be interesting to consider the EV supply chain from Tesla’s standpoint.
Tesla has become the world’s largest carmaker in a spectacular share price surge, underpinned by very solid operating performance over H1. Admittedly, Tesla’s valuation no longer makes sense by any traditional measure. But Tesla is a hybrid car company established from the best of the car, software and energy industries. That makes it unwise to short, in our view.
Rather than debating the merits of Tesla’s valuation, we find it more interesting to consider how the group’s vision has secured a leadership position over the entire EV supply chain ahead of rivals, and why we expect it to keep its lead in the EV segment.
International OEMs must adapt to Tesla’s greater agility and become more aggressive in developing new technology if they want to survive the EV revolution.