Will the stock market keep backing EV start-ups?

Nascent EV firms have been attaining astronomical valuations for several years now

- NICK GIBBS

The sky-high valuations of companies such as Arrival, Canoo, Lucid, Nio and even Tesla are already deflating. Of 23 electric vehicle manufacturer stocks tracked by the Financial Times in a chart entitled Electric Bubble Watch, all are down on their peaks, some by more than 70% as we went to print (including Arrival, Faraday Future, Lordstown and Workhorse).

In one crazy moment last year, Tesla was valued at more than the next 10 largest manufacturers while selling fewer vehicles than Isuzu.

If you organise global car makers based on their market capitalisation (the combined price of publicly and privately held stock), Tesla still comes way out in front of Toyota, with a $1 trillion (£750 billion) valuation in a snapshot taken on 7 December. But are we entering a phase where the stock valuation begins to align more closely with the physical realities of the start-ups?

After Toyota comes Chinese EV and battery maker BYD, and then in sixth, ahead of General Motors, is electric car, truck and van maker Rivian, at $87bn (£65.7bn). California-based luxury EV maker Lucid is eighth, at $78bn (£58.9bn), just ahead of Ford at $76bn (£57.4bn). Chinese EV maker Nio is 14th, ahead of Honda. And Fisker, another Californian outfit, ranks 36th, at $5.2bn (£3.9bn), ahead of Mazda.

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