Tesla has ‘a significant first-mover advantage’ in electric vehicles – but 3 smaller names are also on the cusp of success as EV sales soar in 2021, CFRA says

Tesla has established a “significant early-mover advantage” over new entrants to the ever-expanding electric vehicle market, but a few other small names stand out, according to CFRA’s Garrett Nelson.

In a note released Wednesday, the senior equity analyst said Amazon-backed Rivian, Lucid Motors and Fisker would emerge as “success stories” as sales of electric vehicles increase in 2021.

Nelson uses four categories to analyze emerging electric vehicle manufacturers: 1) specifications (price, range, etc.) and overall attractiveness of their initial vehicle models; (2) financial considerations such as their sources of funding, balance sheets and liquidity; (3) the opportunity for growth of their sub-industry; and (4) management experience and credibility.

He said all three names performed well in each category. Additionally, all three automakers will be among the first to put electric vehicles on the road, Rivian and Lucid are expected to hit the road this year, and Fisker at the end of 2022.

Fisker made its public market debut in October, while Lucid Motors on Monday announced a merger with SPAC Churchill Capital Corp. IV. Rivian is looking to go public as early as September with a valuation of $ 50 billion, Bloomberg reported earlier this month.

Nelson added that Tesla has an advantage over new entrants; citing how the company increased its sales volume of electric vehicles in the United States by more than 50% last year.

“With all the talk about increased competition from new EV models in 2020, Tesla has increased its market share by an estimated ~ 58% share in 2019, as models like the Audi e-Tron, Jaguar I -PACE and the Nissan LEAF were largely disappointed from a sales perspective, ”added Nelson.

CFRA predicts that electric vehicle sales in the United States will increase by more than 50% to exceed 500,000 units in 2021, particularly if the Biden administration passes legislation that could benefit electric vehicles. The research firm has a “strong buy” rating on Fisker, and a “hold” rating for Tesla.