6 Upstart Tesla Competitors to Watch

Six upstart electric vehicle companies to watch.

The biggest name in electric vehicles keeps getting bigger. In 2020 — a year that has included the company’s long-awaited eligibility for inclusion in the S&P 500 — Tesla (ticker: TSLA) shares jumped by more than 400% before a 5-for-1 stock split in late August. While Tesla grabs all the headlines, car companies around the globe are pouring time, money and manpower into catching up. The gap is closing quicker than you think. EV startups are going public in record numbers, and Tesla competitors have never been more prevalent as rivals try to take a bite out of Tesla’s fast-growing business. The EV race has only just begun, and any one of these six automakers could take the lead.

Li Auto (LI)

One of Tesla’s newest competitors is Chinese car company Li Auto, which went public to the tune of $11.50 per share in July and popped 43% on its opening day. Investors are clearly eager to learn more about Li’s range-extending generator, a small onboard gasoline generator that recharges the One — Li’s flagship compact SUV — giving the car a range of 500 miles, an impressive technological feat. This hybrid approach is perfect for an EV in China, where charging station networks have yet to be built out, causing “range anxiety, which limits use cases and impedes the wider acceptance of BEVs (battery electric vehicles) in China,” according to a filing with the Securities and Exchange Commission. Founded in 2015, Li has grown quickly in China, selling more than 10,400 Ones since production began in November 2019 — and a new listing in the U.S. means more money to fund future growth.

Nio (NIO)

In August, Chinese EV maker Nio made a bold statement: The company will begin selling its battery-powered cars without batteries. The electric batteries in an EV are one of the most expensive components in the vehicle. By selling an EV without a battery, Nio can effectively reduce the price of its cheapest model, the ES6 SUV, by around 25%; that’s a big difference for consumers who may be hesitating on the EV price threshold. Nio customers will instead get access to Nio’s battery-swapping stations, where they can exchange spent batteries for fresh ones. The success of this system is predicated on Nio’s network. With just 143 battery stations in China, the company still has plenty of room to grow — and that’s exactly what it’s doing, with vehicle sales up 146% year over year in the second quarter.

Nikola Corp. (NKLA)

Competing with Tesla is just business. But ripping off Tesla’s name? Now that’s just mean. Still, Nikola gets points for originality by combining electric battery power with hydrogen fuel cells in its vehicles. Putting the two together gives Nikola automobiles some serious range — the company’s forthcoming Badger pickup truck will be able to drive 600 miles on a single charge, an impressive distance for an EV that few competitors can beat. However, Nikola’s main focus will be on big rigs, with an all-electric truck hitting the road in 2021 and a hydrogen fuel-powered semi debuting in 2023. These trucks will be sharing the road with Tesla’s semi beginning in 2021, but Nikola has had a good start — the company has signed a deal to provide Anheuser-Busch InBev (BUD) with 800 trucks to make zero-emission beer deliveries around the country.

Workhorse Group (WKHS)

Nikola isn’t the only EV company out there focusing on commercial vehicles. Workhorse builds electric vans that the company wants to position for last-mile delivery services, though it has had few successes so far. The company did enjoy a 950-van order from United Parcel Service (UPS) back in 2018, and if the global delivery giant likes what it sees with that test batch, then Workhorse will be off and running. In the meantime, Workhorse is bidding on a contract to modernize the United States Postal Service’s fleet of 163,000 Long Life Vehicles, and its recent admittance to the Russell 3000 Index back in June means more investors are taking a look at the company than ever before. Workhorse is still a small company, with a goal of producing 300-400 vehicles in 2020 — but the company has big plans and even bigger opportunities ahead.

Canoo Holdings (CNOO)

The latest entrant in the EV race is Canoo, which is going public later this year thanks to a reverse merger with special purpose acquisition company Hennessy Capital Acquisition Corp. (HCAC). In a market that seems to get more crowded by the day, Canoo is setting itself apart — for instance, when its consumer vehicle hits the road in 2022, you won’t buy or lease it. Instead, drivers will be charged a monthly subscription fee for Canoo cars, as well as insurance and access to recharging stations. Canoo plans to target young professionals with this unique value proposition, but in the meantime, the company will utilize its skateboard chassis technology to bring in revenue. The company has partnered with Hyundai and Kia to produce these modular, low-profile chassis, lowering costs for EV production and providing Canoo with a foot in the door of a very competitive industry.

Lordstown Motors (RIDE)

Much like EVs, SPACs are all the rage these days, and DiamondPeak Holdings Corp. (DPHC) isn’t about to miss out on the fun. The SPAC has agreed to a merger with Lordstown Motor to bring the company public, which is actually great news for Workhorse — the company has a 10% stake in Lordstown. Lordstown will be bringing its all-electric pickup truck Endurance to market in 2021, and the company will focus on selling it to business clients rather than consumers. Endurance’s four electric motors, one in each wheel, are a unique feature and could help explain the roughly $1.4 billion in preorders for the truck. That’s a great start for a company valued at about $1.6 billion, but considering that Tesla’s Cybertruck has more than 650,000 preorders, Lordstown has a long way to go to catch up.

Six electric vehicle companies competing with Tesla:

— Li Auto (LI)

— Nio (NIO)

— Nikola Corp. (NKLA)

— Workhorse Group (WKHS)

— Canoo Holdings (CNOO)

— Lordstown Motors (RIDE)

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6 Upstart Tesla Competitors to Watch originally appeared on usnews.com

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