Last week, CEO Elon Musk said that he finished selling the 10% stake in Tesla (TSLA). This will remove an overhang that sent the stock from a $1243.49 high to a $900 low. Tesla is the established brand and first to enter the electric vehicle mass market.
In 2021, Fisker (FSR) and Lucid (LCID), gained plenty of attention from speculators. Real-world unit production volumes remain elusive, especially for Lucid. The luxury EV supplier will sell a negligible number of units initially. But Tesla owns the long game. It has the branding to protect its market share. Furthermore, Tesla’s software, battery charging network, and support have declining costs as they grow. The new EV suppliers have an uphill battle ahead in taking any of Tesla’s market share.
Tesla did not begin to promote the Plaid, the highest trim and fastest vehicle in its line-up. If it wants to enter the luxury market, the firm has many options.
Investors may look at the steep dip in China’s Xpeng (XPEV) and Nio (NIO) as an alternative. Those stocks are down because China’s economy is slowing. It is also cracking down on consumerism in the name of “Common Prosperity.” Investors should avoid the Chinese market and consider Tesla instead.