Capital is pouring madly into electric vehicles The market is expected to welcome high-volume deliveries in 2022

In 2021, the global electric vehicle market capital is active. In the past year, a number of emerging electric vehicle companies have landed on the capital market through SPAC special purpose acquisitions, and their valuations have soared. As of now, the total market capitalization of U.S. electric vehicle companies Rivian and Lucid Motors has exceeded $150 billion, but neither company has generated any substantial revenue.

In China, the electric vehicle industry is also "sucking gold". Well-off Industries, which owns Seres Electric Vehicles (also known as SF Motors), has more than fivefold its share price in A-shares over the past year. On Thursday, Seres unveiled the Aito M5, the first hybrid model equipped with Huawei's Hongmeng system, which will enter the two major markets in China and the United States in the future. Companies claim that the Aito M5 has higher performance than Tesla Model Y, but the price after subsidies is about 250,000 yuan, which is lower than the Model Y.

In April this year, Seres has released the SUV model SF5 in October this year, with nearly 2,000 deliveries, ranking among the top five in the new energy SUV market of more than 200,000 yuan. The company said it aims to rank among the top three new energy vehicle sales in China within the next five years, and will also build more than 1,000 flagship stores and experience centers with Huawei next year.

The global electric vehicle market ushered in a capital explosion driven by Tesla to a large extent, and the only electric vehicle company that really achieved profitability at present is Tesla. The company's market capitalization peaked at $1.2 trillion last month and has since slipped about 20 percent as a result of Musk's sell-off.

Tesla CEO Musk recently said that Tesla electric vehicles have accounted for two-thirds of the us electric vehicle market. The company delivered a record 240,000 electric vehicles in the most recent quarter, and now Tesla's production base has expanded to Germany and Texas, and production is expected to double.

U.S. government support for the electric vehicle industry has also driven corporate valuations. The U.S. bipartisan approach has signed an infrastructure bill under which the government will invest about $550 billion to support transportation, the Internet and utilities, of which $75 billion will be spent on building a network of electric vehicle charging stations.

With more and more enterprises and capital entering the market, the market is expected to usher in a large number of electric vehicle deliveries in 2022. Lucid Motors plans to produce 20,000 electric vehicles next year, and as of September this year, the company had just $720,000 in revenue and a net loss of $520 million in the third quarter, compared to a loss of $1.5 billion in the first nine months of the year; Rivian began selling in the third quarter of this year but delivered only 11 electric vehicles with revenue of $1 million, and the company lost $1.23 billion in the most recent quarter.

In addition, U.S. electric vehicle companies, including Faraday Future (FF), Canoo, Lordstown Motors and Fisker, have also pledged to start delivering in 2022.

But to meet the production and delivery targets for electric vehicles, automakers will have to deal with a number of challenges in the next year, including supply chain disruptions, labor market challenges, inflationary pressures and rising capital costs.

Vitaly Golomb, an analyst at Drake Star Partners, an investment bank focused on electric vehicle technology, said in a report: "After the capital comes in, the next stage of competition will focus on who starts production first, and translate market interest and investment in the brand into satisfactory deliveries for customers." ”

Emerging electric vehicle manufacturers also need to compete with traditional auto giants for components such as chips. The Volkswagen Group has said it will boost production at its headquarters plant in Wolfburg, Germany, in 2022, up 43 percent from this year's level.

The mass production plans of some electric vehicle companies that have previously been listed through SPAC have been repeatedly delayed, and have been sued by investors, and short-selling institutions have also targeted these electric vehicle listed companies.

In October, short-selling agency J Capital Research accused FF of falsifying vehicle reservation numbers and other issues in a research report, and questioned FF's ability to mass-produce electric vehicles on a large scale, saying that the company "can't sell a single car." FF's financial data forecasts a cumulative loss of approximately $2.8 billion as of September 30, 2021, with significant operating losses to continue for the foreseeable future.

FF has refuted the short-selling agency's allegations and upheld expectations for mass production deliveries in July next year. The company also said it would need an additional $1.5 billion for the development and production of the FF81 and FF71 projects.

"We expect increased costs, which are primarily due to certain product improvements and upgrades related to the enhancement of FF91 product capacity, accelerated spending related to the preparation and development of FF81 projects, and factors such as increased construction and labor costs, rising raw material prices, semiconductor chip shortages, tariffs and other supply chain constraints." The company said on an investor conference call earlier this month.