I lived through it in tech. It was a bloodbath in Silicon Valley.
Posted on 04/11/2024 12:12:12 PM PDT by SeekAndFind
In recent months Tesla has had a bumpy ride. In January the electric-vehicle (ev) pioneer warned that growth would be “notably lower” this year, as motorists’ enthusiasm for battery power loses charge. The same month it had to suspend most production at its giant factory near Berlin because of supply disruptions caused by turmoil in the Red Sea.
Its market share in China, the world’s biggest ev market, is falling as it fends off cheaper local competition, especially from byd, which late last year briefly eclipsed Tesla as the world’s biggest ev-maker.
Tesla hit another big pothole on April 2nd, when it reported that it had delivered fewer than 390,000 cars in the first quarter. That was down by 8.5% from a year ago—and considerably worse than already cautious Wall Street analysts were expecting.
Tesla’s market value has slumped by a third this year, to less than $550bn. That is still more than any other carmaker, but less than half of the $1.2trn it was worth in 2021. Its boss, Elon Musk, is now only the world’s third-richest man.
If you think the billionaire and his firm are having a rough time, spare a thought for their once-white-hot imitators. Three years ago, as Mr Musk showed that ev-making could be a trillion-dollar business, investors scrambled to back the newcomers promising to be the next Tesla. Two American startups that had gone public earlier that year were accelerating as briskly as their cars.
The market capitalisation of Lucid Motors, founded in 2007, exceeded $90bn; that of Rivian, created two years later, hit around $150bn. Each was worth more than Ford, which was nearly 120 years old and sold 4m vehicles in 2021, compared with 125 for Lucid and 920 for Rivian. Chinese rivals such as Li Auto (founded in 2015),
(Excerpt) Read more at economist.com ...
For the would be stock investor, consider this:
In late 2021 the combined market value of five prominent Tesla wannabes neared a stonking $400bn.
Today the five are worth $69bn, and falling !
Fisker, an eight-year-old American firm, and HiPhi, a five-year-old Chinese one, have paused production. On March 25th a crumbling share price caused the trading of Fisker’s shares to be suspended and the firm may soon be delisted. HiPhi may be looking to sell itself to a big established Chinese carmaker
Even government subsidies can’t make it happen. That’s why we’ve got incoming mandates I guess.
Because somehow our constitution allows the government to decide what we can and cannot buy. Right?
China’s gonna flood the EV market with self igniting death traps, this killing EVs forever. You go China!
Lorstown Motors....
Fisker....
Two that I know that went bankrupt recently...
And if you want to see an ugly stock chart, look at Work Horse motors (WKHS).....
40 dollars a share in Feb 2021...now 20 cents a share.
Rivian opened at 129 a share at its IPO....now three years later, 9 bucks a share.
Safe to say..the bottom seems to have dropped out on the EV market like baseball cars in the 1980s or cannabis stocks from a few years ago.
Im wondering if the AI craze is next?
Let’s not forget the the old-school need for critical mass. Turning a profit from cars still requires producing perhaps 500,000 of them a year. Scale is vital and manufacturing is hard.
The Tesla imitators, have taken too long to start production and are now taking too long to launch new models.
You might enjoy this regarding Chinese manufacturing quality, if you havn’t heard it already.
https://www.youtube.com/watch?v=6B5Kc0D8uqI
Shades of the crash of the 2000 “tech bubble” when many tech stocks lost 90% to 99% of their pre-bubble value and many companies went out of business.
Now the 2024 “EV bubble” is crashing down the exact same way.
” ... when many tech stocks lost 90% to 99% of their pre-bubble value ... “
Name one.
I lived through it in tech. It was a bloodbath in Silicon Valley.
Ha!
“NASDAQ lost 80% of its value from peak. “
You said they lost 90=99% from the pre-bubble values:
” ... when many tech stocks lost 90% to 99% of their pre-bubble value ... “
“Many tech stocks” is not the average NASDAQ. Those that lost 90% to 99% (and went out of business or got delisted) contributed to NASDAQ losing 90% from peak.
” ... when many tech stocks lost 90% to 99% of their pre-bubble value ... “
From your chart the NASDAQ composite post-bubble was up compared to pre-bubble.
LOL...Okay, I was going to come back into the thread and ask some pointed questions!
I won't even get into the hundreds of little ones, most of which went to zero. :)
Reversion to Mean.
But trillions of value and hundreds or thousands of companies were wiped out. Probably justifiably so. Just like the current EV bubble. The only difference is that very few tech companies were producing hardware products. It was relatively easy to build a company without any infrastructure cost of manufacturing. Making EVs is a lot harder, more complex, and a lot more costly...but the same market dynamics are at work. We passed Peak Euphoria.
Showing the value of those companies with what little they sold just shows the stock market is corrupt.
NO ONE, AND I MEAN NO ONE, has thoroughly touched on how corrupt the market is. A topic for research would be to see how many members of Congress profit on sharp swing in stock prices and what happened RIGHT BEFORE THEY INVESTED. No one....
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