In sport, the challengers know that they must solidify the rare opportunities that will present themselves to bring down the big favorites.
They must be realistic and seize any opportunity to destabilize the champion.
The coaches tend to say: "Insinuate doubt in the mind of the favorite."
The recent surge in oil prices, which translates into an explosion in the price of a gallon of gasoline at the pump, is one of those rare opportunities for Tesla's young rivals.
This situation was provoked by the economic and financial sanctions imposed by the West on Russia after its invasion of the Ukraine. In view of the surge in the price of gasoline, we can logically speculate that consumers will show interest in electric vehicles.
Factors, such as the increasing cost of fuel and the government initiatives across different geographies to increase awareness about EVs, are expected to promote the usage of electric vehicles over the forecast period, a recent research report from Mordor Intelligence research said.
Lucid Motors
Bottlenecks
But contrary to what one might have expected, it is not the newcomers to electrification who will benefit from it. Indeed, Lucid (LCID) and Rivian (RIVN) for example, are having difficulty increasing their production rates.
Rivian is expected to provide an update on its production status when the automaker releases its quarterly results on March 10.
But the company, which counts Amazon (AMZN) (17.74%, according to FactSet) and Ford (F) (11.42%) as shareholders, admitted during its quarterly earnings in December that it is experiencing difficulties in its supply chain and will ramp up production.
It said that production would fall “a few hundred vehicles short” of its goal to make 1,200 EVs by the end of 2021.
On Jan. 10, Rivian announced that it had produced 1,015 vehicles throughout 2021, and delivered 920 cars. And Chief Operating Officer Rod Copes left the company.
"Launching and ramping production of three different vehicles within a few months is an incredibly tough challenge," Chief Executive Officer RJ Scaringe said. "This production ramp requires the simultaneous ramp of our supply chain, hiring and training of our product workforce, equipment bring-up, and rapid iterations through production quality loops.
"These challenges have been exacerbated, given the state of our global supply chain, tight labor market, and of course the complications from Covid,"
Basically, a consumer who places an order with Rivian for one of its two models, the R1T electric pickup and the R1S SUV, will not have visibility on when they can take possession of their vehicle.
The same can be said of Lucid, which recently announced that it could start construction of a second production site based in Saudi Arabia.
The California company significantly lowered its main production target in February. It now expects to produce only between 12,000 and 14,000 cars for 2022, a drop of 30% to 40% less than its initial forecast of 20,000 units.
The new forecasts reflect supply chain issues and bottlenecks, Lucid Group said.
"This reflects the extraordinary supply chain and logistics challenges we've encountered and our unrelenting focus on delivering the highest-quality products," said Peter Rawlinson, Lucid's CEO and chief technology officer.
Lucid has tried to reassure consumers of its ability to increase production rates. In particular, the automaker said its plan to expand its one and only factory in Casa Grande, Arizona, was still on track.
The Winners Are Not the Ones We Think
"The Company confirmed its 2.85M [million] square foot expansion of the Casa Grande, Arizona manufacturing facility is on track," Lucid said during its fourth quarter earnings in February.
"We are at the precipice of a global transition toward electric vehicles, and Lucid, with our leading technology and design, is at the forefront of one of the most significant transformations in mobility in generations," Rawlinson said.
As for Fisker, if the company has unveiled the PEAR, an all electric sedan sold at less than $30,000 at the base price, we still have no details on the start date of production.
Fisker, which is already taking orders, promised deliveries will begin in 2024.
It therefore appears that the biggest beneficiary of soaring gasoline prices in the automobile would be Tesla because General Motors (GM) and Ford are also overwhelmed with orders for their highly anticipated electric models.
Tesla, on the other hand, has just obtained the permit to start production in its gigafactory near Berlin. Production should start there by the end of the month.
Elon Musk's company launched a vast staff recruitment campaign for this factory on Sunday. Added to this is the strong probability that the gigafactory in Austin, Texas will also be fully operational in the coming weeks.
Investors also seem to be betting on Tesla. The action of the vehicle manufacturer thus ended up 2.46% at $824.40 at the close of Wall Street on Tuesday.
Rivian
However, Musk advocates pumping more oil to deal with the current situation of soaring prices.
"Hate to say it, but we need to increase oil & gas output immediately," Musk posted to his more than 76 millions followers on Twitter Friday night. "Extraordinary times demand extraordinary measures," Musk added while the invasion of Ukraine by Russia has led to a surge in oil prices.
