The EV bubble spreadsheet: update dos

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With more bubbles in the stock market than on a match day at the London Stadium, you’d be forgiven for forgetting about the big one that’s been brewing in the markets for the past year or so.

Of course, we’re talking about the absurd valuations gracing any business with a tangential relationship to electric cars. And, if you weren’t aware, just gawp at the aggregate figures in FT Alphaville’s proprietary EV bubble Google Sheet, which we launched a fortnight or so ago.

Our favourite ridiculous metric at the moment? BMW’s research and development spend in 2019 is almost double what every electric vehicle stock is expected to spend in 2020. Which somewhat dampens the idea that this particular market bubble will have positive spillover effects in the real economy.

So what’s new in the sheet this week? Well, in terms of stocks, we’ve added much hyped electric vehicle maker Faraday Future to the sheet after it announced a deal to merge with a Nasdaq-listed Spac called Property Solutions. The transaction should bring in $1bn of proceeds to help get its yet-to-be-released flagship luxury electric vehicle, the FF 91, into consumer hands.

Other additions to the sheet include BMW, who we somehow contrived to leave off the list first time around, and FREYR — a Norwegian battery cell producer backed by storied clean energy names such as Koch Strategic Platforms and Glencore — which announced Friday its going public on the Nyse through a Spac named Alussa Energy. The Koch vehicle seems to like Spacs, with another one of its investments — battery producer Microvast — also planning to go public via that route, according to reports Sunday from Bloomberg. Of course, we also updated Tesla’s financials to include its fourth-quarter results from last Wednesday.

While we’re on the subject of raising cash — a few of the EV returned to the capital markets last week. Arcimoto, the $740m producer of two and three wheeled electric vehicles, announced an at-the-market offering in which it can raise up to $80m. Plug Power, the near $30bn hydrogen fuel cell company, said it was planning to raise a minimum of $1.8bn in a stock offering. The proceeds of which will be used for “for working capital and other general corporate purposes”.

In other news we also had Biden’s announcement that he plans to replace the entire US federal fleet with electric vehicles. And, quelle surprise, promises of fresh government subsidies sent the EV stonks mad with Workhorse Group, XL Fleet and Blink Charging all among those hitting new highs last week.

Yet, in terms of broad market health, the space seems to be suffering from a bit of fatigue. On average, the stocks in the sheet are down an average of 28 per cent from their all time highs. So has the bubble deflated? With king stonk Tesla only 12 per cent off its all time highs, and up 3 per cent in pre-market, that feels a little premature to say. But given the market enthusiasm for things that go up fast has quickly moved into heavily shorted stocks and err, silver, it’s clear that the space is increasingly becoming yesterday’s news. Yet its fair to say that with an ever-fresh supply of electric vehicle plays still hitting the market, never has the supply of EV stocks been greater, and the demand for them weaker.

Related Links:
FT Alphaville presents: the EV bubble in real time — FT Alphaville
The EV Bubble spreadsheet: update uno — FT Alphaville

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