This is why Lucid Motors has a passionate fanbase
An underrated aspect about $LCID is that they document their journey on their YouTube channel.

After going through a couple videos, the main takeaway I got is that Lucid’s team stresses high quality and range. Rather than going after Tesla with their Plaid and minimalistic interior, they wanted to create the Mercedes Benz S-Class of electric vehicles.

Also, Peter Rawlinson made arguably the best explanation vehicle about how electric vehicle batteries work. Link: https://youtu.be/2aDyjJ5wj64

By documenting their journey, I understand why Lucid was able to build a small “cult-like” following on social media. Their social media strategy is different from Tesla since Tesla’s social media strategy is mostly about showing how cool their products are and not much about the journey that they’re currently on to make newer and better products.
What to watch for the week of 5/2/22.
Are you prepared to take on the markets this week? Here’s a watchlist that I created of some potential catalysts I’ll be keeping an eye on and looking to trade for the week beginning May 2nd. Feel free to save it for reference, share it in your trade groups and repost it on your social media page. Also be sure to follow me. Let me know what you’ll be watching in the comments.

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The Coming Week in Earnings
Woooo boy, this week will be fun for my portfolio.

Monday (5/2)
  • $BIGC^ (On my Sell Watchlist)

Tuesday (5/3)

Wednesday (5/4)

Thursday

Friday

Anything with a ^ indicates I read the 8-K and 10-Q/10-K and track their financials along with KPIs on a spreadsheet I have.

So basically, this will be me next week...
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Should $GM and $F spin-off their electric vehicle business segments?
On February 18, 2022, $F shares surged as CEO Jim Farley was looking at the benefits and risks of spinning-off their Ford's vehicle business.

Unlike Ford, $GM chose not to cater Wall St.'s demands in spinning off their electric vehicle business.

Investors want these automakers to spin off their electric vehicle businesses because they believe that it will unlock value. Auto executives are hesitant to spin off their electric vehicle business for two reasons:
  1. their electric vehicle business is young and still relies on the resources of their parent company to survive and build a foundation
  2. if ever electric vehicles do go mainstream, then shareholders of the ICE-vehicle business could essentially see their stake go to zero

Regarding the second point, the advantage that the ICE-vehicle business would have is that they have the infrastructure to make any vehicle that has many moving parts. Even if cars of the future could stop running on gas, they can run on other fuels like hydrogen. And regarding hydrogen vehicles, they still have many moving parts.

Back in 2018, Hyundai saw the move to hydrogen-powered vehicles as a way to preserve many jobs in the automotive supply chain. Since a fuel cell engine closely resembles petrol engines, there wouldn't be many changes to the automotive supply chain if the industry moves towards producing hydrogen vehicles. Until refilling infrastructure ramps up, consumers are going to continue to remain hesitant in adopting a hydrogen-powered vehicle.

With everything, the debate on whether these big automakers should spin off their electric vehicle business segments is still difficult. The surge in interest rates and concerns over the supply of rare earth metals and other metals essential to electric vehicle production is making investors hesitant in investing in electric vehicle stocks. At the same time, these brands come with high notoriety, and with that, they'll have an easier time selling vehicles to consumers. They're not young brands like $RIVN and $LCID, who've been covered negatively by the press over their issues with production. At least with the Big Automakers, their relationships are more established, they hold more influence in the overall automotive supply chain, and the people working there have a lot more experience with the issues that the industry is currently dealing with compared to those working in the startups.

Me personally, I think that Ford's electric vehicle business is more established and thus, I think they should consider a spin off. As for GM, their electric vehicle business is less established as the company is currently transitioning away from producing the Bolt and ramping up production for the Hummer EV and the Cadillac Lyriq.
If oil goes to $200, here's what I'm bullish & bearish on
Bearish:
$UBER $LYFT $DASH $GRUB and other gig economy transportation platforms
$AAL $UAL $DAL $LUV and other airlines
$KNX $JBHT $USX $SNDR and other trucking companies

Bullish:
$TSLA $F $GM $RIVN $LCID $FSR and other electric vehicle manufacturers
$SEDG $RUN $ENPH $TAN and other solar stocks
$XOM $CVX $OXY $PXD $COP and other oil stocks

Oil companies today have pricing power like never before. Automakers have pricing power like never before. Solar companies, they'll soon start jacking up their prices as demand for solar energy systems surges during the summer.

Meanwhile, fewer people are gonna use their vehicles to offer ridesharing services and food delivery services because already, fuel costs are eating up a majority of their earnings. Also, airlines will have to balance between finding ways to attract passengers to fly with them (through lower prices) and not deterring them through higher prices (since they want to pass down the higher fuel costs to customers).

Trucking companies have it the worst. The industry has been commoditized as all truckers are essentially independent contractors with their own trucks and they do their own deliveries. The smaller companies are more vulnerable to high oil prices. Meanwhile, the larger trucking companies will have to bump pay for truckers to justify them making deliveries amid the high fuel costs.

These times are unprecedented. We need to drill more oil. Bring back the fracking revolution. The OPEC cartel members have an incentive to produce a lot more oil than their current production target.

Reactivating nuclear power plants takes months or even a few years. Quadrupling down on renewables requires heavy investment and a lot more raw materials, which we are currently struggling to import. Plus, transitioning to a green energy economy takes a very long time. The green energy solutions we currently have aren't dependable. The wind doesn't blow all the time. The sun doesn't shine all the time and it doesn't shine every day and every month. Geothermal plants and hydroelectric plants can only be built in certain places. Biomass may seem viable but we don't want to cause food prices to rise because we're now removing food supply for the sake of energy production.
I don't argue that higher oil prices are good for ALL EV makers, but I can't rationalize the valuations of $RIVN $LCID $FSR and others. While I do believe $TSLA is wildly undervalued (watch their EPS growth this year), too much unearned credit has been given to others trying to follow in tesla's footsteps. These new players have a long way to go before justifying their current valuations, let alone any future growth.
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Upcoming Earnings Calendar (Feb 28th - Mar 4th)
Hey guys! Here's the upcoming earnings calendar! Two of my holdings, $SE and $SOFI report next week, so I'll be paying significant attention to both. Other than that, I'm also interested in seeing what retailers like $TGT $BBY and $COST have to say about supply chain issues and inflation.

Good luck to everyone!

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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THU:


FRI:
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Commercial viability is hitting EV stocks hard
$RIVN has been on the front pages of newspapers over the past couple of days as journalists report the production issues that the company faces in building out their vehicles.

At the same time, other companies like $ARVL $LCID, and so on have also experienced growing pains and investors are getting pessimistic with them as well.

$FSR and $NKLA stand out because their business model mostly relies on outsourcing the capex heavy activities to other manufacturers like $MGA and $CNHI. Plus, Nikola Motors already delivered the first-ever electric truck.

$GGPI had their SuperBowl commercial and I wouldn't be surprised if many people ordered a Polestar vehicle (or at least considered buying one) after watching the big game.

I do have confidence that Rivian and Lucid will make it through the growing pains because there's already immense demand for their vehicles from wealthy individuals. As for both Rivian and Arrival, they both have a ton of orders from B2B customers.

With the abundance of capital in this market, many investors have more tolerance for growing pains. Also, many on Wall St. are willing to inject more capital into these startups as a way to get them ready to capitalize on the high car prices ASAP. The chip shortage does stand in the way of commercialization, and I have confidence that things will get better on that end.

$TSLA might be dominating today, but in the future, their competitors will provide a ton of competitive pressure on them. Maybe Jim Cramer will be wrong and Rivian does become the next Tesla.
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