As Tesla heads into the third quarter, following what Elon Musk called a “tough quarter” for the automaker, analysts are noting which electric vehicle shares are worth investing in. While Tesla’s shares jumped slightly in the last week of Q2, Chinese automaker NIO and fellow U.S. automaker Lucid both saw their shares drop.
Tesla’s stock jumped by 2.6% nearing the end of last month, while automakers NIO and Lucid Motors saw shares drop by 3% and 4.7%, respectively, according to The Motley Fool. (Today, July 8, Tesla shares were up 2.5%, and they’re up 10.5% since the morning of July 1.) Mizuho analyst Vijay Rakesh cut stock targets on both Tesla and NIO on Monday, despite maintaining buy ratings on both stocks and adding that there’s still plenty of upside.
Rakesh said that a handful of factors, specifically including the COVID-19 shutdowns in China, played a role in his cutting of Tesla’s 12-month price target to $1,150 from $1,300. Additionally, Rakesh dropped his price target for NIO to $48 from $55 per share. Despite this, Rakesh noted that Tesla and NIO still have a lot of room for upside, though Lucid could be facing a value discrepancy between its startup status and other, more established automakers — such as NIO and Tesla.
Tesla’s shares jumped even after Credit Suisse dropped price target. Video: CNBC
Lucid’s market capitalization is currently about $30 billion, meaning the automaker’s shares are trading at over eight times its 2023 estimated revenue of $3.5 billion, while NIO’s shares are trading at just 2.5 times the company’s 2023 estimated revenue. Lucid’s flagship vehicle, the Air Dream Edition, retails starting at a price of around $170,000, which is much higher than Tesla’s premium luxury sedan, the Model S Plaid, retailing at a starting point of $125,090.
As ultra-expensive EVs become more and more limited, some analysts expect the automaker’s sales volume growth to flatten. Although Lucid currently has plans to debut more affordable models in the future, the near-term has seemed to captivate investor attention, while long-term investors may want to consider expectations at least a year or two years out.
With Tesla’s new Giga Berlin hiring several employees and substantially ramping up production, the automaker is considered well-poised to enter the next few years, even as supply chain, rising inflation costs and other barriers are resulting in an overall auto industry downturn. Increasing competition may also present some new challenges for Tesla, though its broad business model currently gives it an advantage over other automakers, including NIO.
Originally posted on EVANNEX.
By Zachary Visconti
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Former Tesla Battery Expert Leading Lyten Into New Lithium-Sulfur Battery Era — Podcast:
I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...