When the stock markets is at an extreme, it is easy to be led by our emotions. At the top, investors end up buying because of “FOMO,” which is really just a form of greed. At the bottom, people panic and sell because of fear.
Tesla is one of our firm’s biggest long holdings and Rivian is also a good-sized portfolio position for us, so let’s look at the facts to get a sense of where things stand in the EV industry. While those companies have rolled out EV models of their own, they have so far been unable to produce those vehicles at scale, nor at price points that are attractive to most consumers.
As we have stated before, Rivian’s biggest challenge in the near-term is getting its production up in order to lower its cost of goods sold per unit. Our golden rule for startups like Rivian has been execution, and thus far management has done a good job of executing on its plan to produce at least 50,000 units in 2023. If Rivian hits that target, we expect the company would generate sales this year of about $4.5 billion, up from $1.6 billion in 2022.