Tesla Finally Has Competent Competition

Dec 26, 2021

Tesla (TSLA) served as the proof of concept for the electric vehicle (EV) revolution that’s underway. It proved that fully electric vehicles can compete in terms of both quality and performance.

We identified outperformance in Tesla’s Consumer Demand back in 2017 when shares were trading for less than $60.

Now, electric vehicles have hit the mainstream. Generic EV Demand has never been higher, with Mentions up by a monumental +161% YoY on a 90-day moving average.

A confluence of factors is responsible for the surging levels of consumer demand:

  • Rising gas prices.
  • A global push for a greener economy with billions in infrastructure spending planned in the U.S. alone.
  • Tesla’s success and desirability.

Tesla paved the way, by producing a high-performance, high-quality luxury vehicle, which they produced and delivered to consumers by the hundreds of thousands.

And Demand has never been stronger.

Consumer Purchase Intent Mentions for Tesla are on pace to hit a new all-time-high level in the fourth quarter of 2021, currently trending +50% QoQ and +71% YoY.

When we first identified Tesla as an outperformer, it was significant levels of “hype” that informed our bullish outlook. Now they have the numbers to back it up.

Last quarter, the company delivered about 240,000 vehicles, and it is accepting orders for four different models, not counting $100 reservations for the Cybertruck.

Overall, Consumer Demand for electric vehicle manufacturers is greatly outpacing that of traditional names in the industry:

That said, competition within the EV industry is heating up.

Many of the new companies, like Lucid (LCID) and Rivian (RIVN), are showing the same phenomenal Demand growth we saw for Tesla back in 2017.

But these newcomers have a long way to go before they can challenge Tesla’s dominance. Tesla’s brand is massive; it has thousands of vehicles on the road and it’s actively producing many more.

Consider a comparison of combined Mention volume for electric vehicle manufacturers in the past year:

Tesla boasts more than 96% of the total, with RIVN, LCID, and Fisker (FSR) accounting for a little more than 3%, a commanding lead for the first mover.

We’re bullish on the electric vehicle sector as a whole, including the recent IPOs.

However, we’d be remiss if we didn’t point out Tesla’s dominant position, a position which it doesn’t appear to be in danger of losing for the foreseeable future.

Andy Swan,
Founder, LikeFolio