When the stock markets is at an extreme, it is easy to be led by our emotions. At the top, investors end up buying because of “FOMO,” which is really just a form of greed. At the bottom, people panic and sell because of fear. Anytime you buy, sell, or hold because of greed or fear, you are not being objective. Despite our consciousness of this phenomenon, all of us our subject to making decisions at times based on fear and greed. The best, and perhaps the only way to avoid making decisions based on fear or greed is to remain objective. And one of the best ways to remain objective is to look at the cold, hard facts in front of you.
Today’s relevant facts are the electric-vehicle (EV) delivery statistics from Tesla
and others. All three of these companies beat the most-recent earnings expectations and demonstrated impressive production and delivery numbers. Tesla is one of our firm’s biggest long holdings and Rivian is also a good-sized portfolio position for us, so let’s look at the facts (the numbers) to get a sense of where things stand in the EV industry. According to Morgan Stanley, total 2022 global light-vehicle sales were about 77.6 million units, 8 million of which were EVs. EV growth is expected to continue at 23.6% CAGR through 2025, while ICE (internal-combustion engine) growth is expected to remain flat over that period. While Tesla faces some serious competition for EVs in China, in the U.S., the company has a commanding lead over rivals. Most importantly, Tesla is one of the only auto companies that is actually earning significant profits from EV sales. Tesla is continuing to accelerate growth despite purported “competition” from traditional automakers including General Motors
While those companies have rolled out EV models of their own, they have so far been unable to produce those vehicles at scale, nor …