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Global demand for electric vehicles (EVs) held strong and sales saw a sharp upward trajectory in 2020 even during COVID-19 lockdown restrictions. EV sales have continued to increase in 2021 with certain brands leading the way in product offerings and in administering online sales.
While Tesla, Inc. (TSLA) has been stealing all the headlines, several new EV players have been established and are seeking to bring stiff competition to the EV juggernaut. Not all new entrants possess sufficient fundamental strength to succeed amid intense competition, however. While the EV behemoths are rapidly scaling up, many new players have yet to expand their production capacity to meet the growing demand. Furthermore, some of these companies lack adequate financial strength to justify their premium valuations.
Now that major auto manufacturers are also entering the EV space, the market will likely get even tougher for emerging EV players like XPeng Inc. (XPEV – Get Rating), Li Auto Inc. (LI – Get Rating), and Workhorse Group Inc. (WKHS – Get Rating). With investor concerns over the overvaluation and poor near-term growth prospects, these stocks have declined year-to-date.