The next Tesla? 5 electric vehicle makers to watch
Polestar and Phoenix will likely be the next IPOs in a very hot sector led by recently launched Rivian and Lucid and by China’s Nio. They won’t be the last.
The race to be the next Tesla is on. California-based Phoenix Motors filed paperwork for an initial public offering this week, while Sweden’s Polestar is going public early next year. They follow Amazon-backed Rivian, which had a successful IPO launch on November 10 and saw its shares rise 70% in just four days of trading, and Lucid, which launched in July. Also in the game is China’s Nio and more than a few others.
The lure of mirroring sector-leader Tesla is obvious.
Tesla is now the biggest automaker in the world by market capitalization
Tesla’s stock price rose 92% over the past, and its market capitalization topped $1 billion, surpassing the likes of Toyota, GM and Ford — even though it currently makes far fewer cars.
| Tesla | GM | Ford | Toyota | |
|---|---|---|---|---|
| Vehicles made in 2020 | 509,737 | 6,829,000 | 4,187,000 | 7,909,488 |
The reason investors value Tesla higher than these giants is its perceived future value and lack of real competition — until recently. Signs point to investors viewing other electric vehicle companies the same way. Rivian is now the third-largest automaker by market cap, behind Tesla and Toyota but ahead of GM and Ford. Lucid and Nio rank sixth and seventh, respectively.
Crowded sector, priced for growth
At this point, electric-vehicle (EV) companies abound. There are more than 300 EV manufacturers in China alone. Some shakeout seems likely if history repeats itself. In the early days of cars in Detroit, there were over 200 automakers. Today, the US sector is dominated by the Big Three: General Motors, Fiat Chrysler Automobiles and Ford Motor Company.
Here’s a look at some of the key names today.
1. Nio (NIO)
Nio is a Chinese EV manufacturer sometimes referred to as the new Tesla, the Tesla killer and the Tesla of China. The company started similarly to Tesla by building an expensive two-seat sports car, the EP9, in limited numbers. Currently, the company offers three models, all of which are SUVs: EC6, ES6 and EC8. Four new models are expected to launch in 2022.
What sets Nio apart from the competition, though, is the Battery-as-a-Service (BaaS) concept where you can choose to buy the car without a battery. This can drop the car’s price down to almost $20,000, depending on the car. Instead of buying the battery, you pay a subscription fee to use a battery, costing as high as $230 each month.
Aside from the lower price, other benefits of the BaaS concept include upgrading your battery and swapping it. Nio has over 500 battery swapping stations in China, with more to come, where instead of charging the battery, you swap it for a full one or one with a longer range in around three minutes. This beats waiting 15 minutes to charge up to 200 miles of range with a Tesla.
2. Lucid Motors (LCID)
Lucid is an Arizona-based EV manufacturer that started by building EV batteries and powertrains for other vehicle manufacturers in 2007. Currently, the company has only one model in production — the Lucid Air, a luxury sedan. The most expensive trim, the Lucid Air Dream Edition Range, got an EPA rating of 520 miles per charge, which is 100 miles more than the Tesla Model S. It’s also the highest range of any electric vehicle at the moment.
But range is not the only thing going for the Lucid Air. The car was named Car of the Year 2022 by Motor Trend, a solid validation that the company is headed in the right direction. Lucid plans to reveal Project Gravity, a luxury SUV in 2023. But it has to ramp up production of its Lucid Air first. The company plans to build 577 vehicles by 2021’s end. As of December 2021, there are more than 17,000 reservations for the Lucid Air.
Some consider Lucid as the main Tesla competitor because Lucid is vertically integrated. The technology is built in-house, including batteries, drivetrains and software.
3. Rivian (RIVN)
Rivian was founded in 2007 and is based in California. Despite being active so long, the company just started delivering vehicles. Its main EV offerings are the R1S, an SUV, and the R1T, a pickup truck. The R1T has an estimated range of 314 miles and a towing capacity of 11,000 pounds. This slightly beats the Ford F-150 Lightning, which has a range of 230 miles and a 10,000 pounds towing capacity.
Aside from targeting the outdoor community with this set of vehicles, the company is backed by Amazon. This is one of the main reasons why investors see the company as a compelling one. Amazon alone has ordered 100,000 electric delivery vans. The online giant expects to have 10,000 EVs in operation by the end of 2022, but the main question is whether Rivian can deliver so soon. Rivian plans to supply around 1,000 vehicles by the end of 2021.
4. Polestar (GGPI)
Polestar is a Swedish company owned by Volvo, and it’s one of the two companies here that has yet to go public. Instead of the regular IPO route of Rivian, Polestar will go public by merging with a SPAC in 2022.
Unlike Lucid and Rivian, which are just starting production, Polestar already has two cars in production: the Polestar 1 and the Polestar 2. Polestar 3, Polestar 4 and Polestar 5 are planned for release in 2022, 2023 and 2024, respectively.
In 2020, the company sold 10,000 vehicles, but it plans to ramp up production to 290,000 by 2025.
5. Phoenix Motors (PEV)
Based in California, Phoenix specializes in shuttle buses and delivery vehicles and delivered its first vehicle in 2014. The IPO filing says the company has delivered 84 shuttle buses and 14 work trucks, with most built on a Ford chassis.
No date for the IP0 has been announced but it’s expected in 2022.
At the time of publication, Kliment Dukovski owned shares of Lucid, Nio and Gores Guggenheim, the SPAC merging with Polestar.
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