You Can Lead a Horse to Water…

But you can’t make it drink.  This old proverb may be applicable to the current state of demand for electric vehicles (EVs).  After an initial surge of enthusiasm, fueled in part by Tesla’s success in the face of limited competition, unsustainable subsidies and strong initial demand by early adopters, realism seems to be setting in.

On February 23, 2022, we posted a blog titled, “More Expensive, Less Convenient“, in which we suggested that a variety of issues might make EVs unattractive in the larger mass market.

Now we have vehicle manufacturers cutting prices, changing strategies and generally recognizing that EVs have become a hard sell, as evidenced by inventories of EVs piling up on dealer lots.

Investors should note that some of the earlier industry participants are reporting disappointing sales and profit margins.

All comments and suggestions are welcome.

Walter J. Kirchberger CFA