CFRA says Tesla has a “ significant first-mover advantage ” in electric vehicles – but 3 smaller names are also poised for success as electric vehicle sales soar in 2021

Tesla It has created a “significant first engine advantage” over new entrants in the ever-expanding electric vehicle market, but some other smaller names are emerging, according to CFRA’s Garrett Nelson.

In a note published on Wednesday, the chief stock analyst said Rivian and Lucid Motors are backed by Amazon and Fisker They will emerge as “success stories” with the surge in electric vehicle sales in 2021.

Nelson uses four categories to analyze emerging electric vehicle manufacturers: 1) Specifications (price, range, etc.) and the overall attractiveness of their prototypes; (2) Financial considerations such as sources of financing, balance sheet and liquidity. (3) Opportunity for growth of their sub-industry; And (4) management experience and credibility.

He said all three names are good in each category. Additionally, all three automakers will be among the first to bring electric cars onto the road, with Rivian and Lucid expecting to put models on the road this year and Fisker in late 2022.

Fisker made its public market debut in October, While Lucid Motors announced its merger with SPAC Churchill Capital Corp. IV on Monday. Rivian is looking to roll it out to the public sooner in September With a valuation of $ 50 billion, Bloomberg reported earlier this month.

Nelson added that Tesla has an advantage over the newcomers. Citing how the company increased electric vehicle sales in the US by more than 50% last year.

With all the talk of increased competition from new EV models in 2020, Tesla increased its market share from an estimated 58% share in 2019, as models such as the Audi e-Tron, Jaguar I-PACE and Nissan LEAF were disappointed to some extent. Great from a sales perspective, ”Nelson added.

CFRA expects US electric vehicle sales to grow by more than 50% to exceed 500,000 units in 2021, especially if the Biden administration passes legislation that could benefit electric vehicles. The research firm has a “strong buy” rating on Fisker, and a “contract” rating on Tesla.