How to play Tesla’s Inevitable Demise

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[Editor’s note: “How to Play Tesla’s Inevitable Demise” was previously published in June 2021. It has since been updated to include the most relevant information available.]

Fortune favors the bold. Let’s hope luck favors me when I say it might be time to bet against it Tesla (TSLA).

Full disclosure: We hold TSLA stock in ours Investor in innovation portfolio. How could you not?

Elon Musk & Co. are at the forefront of three of the most disruptive technological shifts in the world today – electric vehicles, solar energy and battery storage.

However, I was serious about finding innovative, disruptive technology companies with the potential for 2X, 5X or 10X earnings.

While Tesla still has growth potential, we think there is a much, much bigger opportunity elsewhere.

I’m more and more excited about the idea of ​​it Lucid Motors (LCID) will soon eat Tesla’s lunch. As a result, Tesla stock will struggle for years to come, while Lucid Motors stock will soar.

That’s a bold claim, I know. I also recognize the dangers of betting against someone as visionary as Elon Musk, or a company with as much talent as Tesla, or a stock with as much momentum and support as TSLA has had.

The short seller’s graveyard is full of capable people who were misled into betting against Tesla and got completely burned along the way.

However, as they say, past performance does not guarantee future results.

While the shorts have been completely wrong about Tesla stock for years, maybe their time to shine has finally come.

You see, I was a huge bull on Tesla stock. And I reached my readers 2,000% plus returns on behalf of. So my sudden bearish stance on TSLA does not stem from hatred of the company.

Instead, it comes from a handful of unbiased observations of Tesla the value and perception of the brand is weakened. Not to mention its technological advantages narrowed. Everything laid the groundwork for Tesla to lose significant market share to a new provider.

And who could it be? Lucid Motors stock.

Here is the story.

Erosion behind the scenes at Tesla

For many years, the thesis about Tesla was based on three key competitive advantages:

  1. Talent. As an influential visionary, Elon Musk is a magnet for top tech talent. Throughout history, the smartest engineers on the planet wanted to work for him and at Tesla. This gave Tesla an unparalleled confluence of talent to build electric vehicles.
  2. technology. Thanks to an unrivaled confluence of talent and a huge advantage in space, Tesla cars have historically been the most successful cars on the market. Their market-leading battery technology has unlocked longer range and faster charging times.
  3. Brand. Tesla is the only “cool” car brand under $100,000 in the world. And the company got to this point by developing an aura of exclusivity and uniqueness that made everyone want their cars.

These advantages are now disappearing.

Tesla has actually lost a bunch of talent over the past few years. Some went to work for other car companies. But most of that talent actually turned to starting their own electric vehicle startups with the idea that they could build cars that would compete with Tesla cars.

The best of the best of these Tesla-inspired startups? Lucid Motors.

Lucid Motors brings the talent

He runs the company Peter Rawlinson, former chief engineer of Tesla Model S. Yes. These are the engineering brains behind Tesla’s flagship car – the one that started it all.

It is backed by an impressive team of ex-Tesla, Audi, Apple (AAPL), Samsung, Ford (F), Intel (INTC), and GM (GM) executors. We’re talking about the people who helped start Tesla and make it what it is today. In addition, some of Apple’s heroic products, such as the iPhone, have very influential people behind them.

It’s the most impressive confluence of talent in the electric vehicle industry outside of Tesla— and it’s not even close. Lucid Motor’s management team is the equivalent of titanium. And given the current trend of Tesla losing talent and Lucid Motors gaining, Lucid Motors will have far more talent than Tesla by 2025.

And indeed, with this exceptional engineering and design team behind it, Lucid has developed, tested and fine-tuned some of the most impressive technologies in the industry.

To answer your question, yesthis technology blinks Tesla’s EV technology on every key performance indicator.

We’re talking longer driving ranges, more horsepower, denser engines, faster acceleration, tighter control – it works.

Tesla has been surpassed

Over the past 10 years, Lucid has created a company entirely of its own Advanced Lucid Electric platform (or LEAP for short). It contains key competitive technological advantages, including:

  • The EV’s low-floor, wide-base skateboard platform enables the company’s “Space Concept” extremely spacious interior design, allowing for more interior cabin space per square foot of the vehicle platform than a Tesla car.
  • An incredibly powerful powertrain that delivers the EV industry’s most efficient battery at 4.5 miles/kWh (compared to ~4 miles/kWh for the Tesla Model S) and therefore unlocks a longer driving range of over 500 miles (that’s the same as Tesla’s the new super premium version of the Model S Plaid), without compromising on performance.
  • Built-in booster charging technology called “Wunderbox” that enables ultra-fast charging rates and two-way power delivery that includes vehicle-to-grid and vehicle-to-vehicle charging.

They support this world-class technology platform 403 patents – more than 80% of them have already been issued.

In other words, Tesla’s technology is no longer alone as the best in the industry. Lucid Motors has a technology portfolio that rivals and even exceeds Tesla’s pound for pound.

Brand dilution

Here’s something about cars. We don’t all want to drive the same thing. For Tesla, it is especially important that people with high incomes want to drive nicer cars. It is a status symbol of their wealth.

There is a reason Porsche (POAHY), Maseratiand Lamborghini don’t make $20,000 cars that everyone can afford. They want to maintain premium brand equity. But Tesla has dreams of democratizing electric vehicle ownership. And as part of that dream, the company is working tirelessly to bring the price of its cars down to $20,000.

On the one hand, this is great because it means Tesla will unleash mainstream demand for electric vehicles.

But on the other hand, this is bad because it means Tesla is reducing its premium brand equity.

After all, there are tons of millionaires out there who simply won’t buy a car that a kid fresh out of college can afford as their first car.

Of course, there is a difference between the Model 3 and the Model S. But an apparent difference it’s not that big. (I have to look especially closely to tell if it’s a Model 3 or a Model S on the road with me.) And it’s certainly not big enough to save Tesla from the inevitable erosion of its premium brand as its cars get progressively cheaper.

However, the demand for electric vehicles in the premium channel is not going away anytime soon. If anything, it will only increase – meaning it exists unique and persuasive an opportunity in the next few years for a new EV brand to eat Tesla’s lunch in the premium channel.

Enter Lucid Motors

Lucid poses as youpost-luxury” a brand that focuses on elegance and modernity rather than the traditional focal points of luxury and indulgence. The company designed its cars with this post-luxury atmosphere in mind. Earth tones. Durable materials. Simple controls. A connected ecosystem. A comprehensive user experience. Tech-forward. Peaceful ambience. These are features that are highly valued by consumers today. And Lucid Motors knocks them all out of the park. This is a dream car.

The important thing is that for at least the next few years this will be a car that only the rich can afford. And as such, the Lucid Air will be the most sought-after premium electric vehicle in early 2020…

The last word

Lucid Motors has talent, technologyand brand that it not only competes with Tesla in the premium EV market but actually beat at his own game.

Does this mean Tesla is dead? No. Far from it.

Tesla will grow like wildfire over the next few years as the company sells a bunch of Model 3 and Y cars around the world, expands its solar business, and successfully ventures into the world of energy storage.

But at current valuations, Tesla stock is valued at perfection and then some. I increasingly doubt that will happen. If it doesn’t, Tesla shares could be stagnant for the next few years.

Investment implications?

It might be time to forget TSLA stock. Buy shares of companies that are stealing market share from Tesla – like Lucid Motors.

As I said, fortune favors the bold. If we’re right, this could be the most profitable move we’ve ever made.

Be at the forefront of this epic shift in next-generation mobility and make some monstrous profits.

As of the date of publication, Luke Lango did not hold (directly or indirectly) any positions in the securities mentioned in this article.

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