On a bi-weekly basis, CAR welcomes our audience to decompress with our President and CEO, Carla Bailo, as she covers and shares her thoughts on the latest Hot Topics happening in the automotive industry. While the biweekly newsletter primarily covers four topics, this feature story previews two of the topics covered on November , 2021. If you would like access to the full newsletter for better insights into critical industry issues you and your organization are facing, sign up for our mailing list here.

HOT TOPICS 11/15/2021 – 11/19/2021

Automotive Stocks

• GM stock hits record high as automaker celebrates Hummer EV production
• Rivian drops 18% in its first down day as a public company following massive post-IPO surge
• EV start-up Lucid’s market value blows past Ford at more than $89 billion as shares skyrocket
• A new Big Three? Rivian and Lucid’s valuations are accelerating past Ford, GM
• Why Mary Barra is convinced GM can still catch TSLA—and believes the stock is ‘so undervalued’

Carla’s thoughts:

If you listened to the CAR podcast this week, we talked about the “WHOA” moments that recently happened.  First, Lucid Air won Motor Trend Car of the Year (selling very few and with no track record), and Rivian’s valuation/IPO shares!  Both were quite shocking to those of us who have been in the business for many years.  Mary Barra is totally right when she stated GM is so undervalued, but let’s add any “legacy” automaker to that list.  The “legacy” automakers are pouring dollars not seen before into electrification and are launching vehicles regularly, BUT their value doesn’t budge much.  Sure, Ford stock has doubled, but it remains under $20.  GM is a far cry from Rivian, Tesla, and Lucid, even at the top of the list.

The “legacy” automakers are hindered because they made big promises and underdelivered for so many years.  These broken promises created a hangover of doubt that will take time to correct.  Also, “legacy” automakers need to stay the course on not only EV production but keeping inventory at the proper levels, watching incentives, and more as COVID ebbs.  When times are great, it is easy to slip back into bad habits, and it has happened repeatedly – the analysts need to be proven wrong this time.  Then, it “might” be possible to heal the hangover.

Global EV Competition

• Biden Sells Infrastructure Improvements as a Way to Counter China
• Lucid Motors CEO says the EV start-up is targeting expansion in China, Middle East by mid-decade
• Biden, visiting GM in Detroit, says U.S. will overtake China in EVs
• Cost of EVs to rise as China dominates the market
• China’s Electric-Car Boom Is Fueling a War for Talent

Carla’s thoughts:

China is eating the world in batteries, raw materials and refining, and EV’s – period.  The rest of the world has a lot of catch-up to do.  If the U.S. really wants to catch up, there are several things needed to make this happen:

• Research dollars – we need to do the battery research at our institutions and keep that talent here in the US.
• Battery raw materials – we need to reopen or start mines and refineries and do so with safe and environmentally sound facilities. This work takes time and money but will reduce our dependence on critical materials from outside the U.S.
• Battery manufacturing – we need a lot more capacity to reach the 50% EV by 2030. We need incentives for companies to open manufacturing sites here.
• Talent – we need everything from skilled labor to PhDs in battery research. We need to take a deep dive into what is needed for the future, what our academic institutions currently provide, and fill that gap.  Jobs at the highest risk due to the death of ICEs should be first on the list for training and then go forward from there.
• EV manufacturing – Again, we are a long way from being able to self-supply 50% EV sales by 2030. Incentives for manufacturers to move to our shores are needed (and workforce)!

This necessary development is not just a government problem, an industry problem, or an academic problem.   Let’s stop expecting “someone” to fix this and realize it will take all 3 – the Triple Helix of government, industry, and academia working together to make all of the above happen.  We need to work as “1 USA” to become the leader in EV’s.

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