Electric High Performance Car Segment Investing

Investing in the Electric High Performance Car Segment

There are new entries to attract tech investing in the electric high performance car segment, and Tesla must get over its production hassles.

In investing and stock trading you always look for potential opportunities and lucrative industries to invest in. The high performance electric car market is getting crowded and competitive, and is caching in on the fast growing supercar segment.

How the Electric High Performance Car Segment Is Heating Up

Famed Italian automobile design house Pininfarina SpA is planning to take on electric car market leader Tesla Inc. ($TSLA) and supercar manufacturer Porsche SE by building an electric hypercar. Hypercars are a notch higher than the already superfast and luxurious supercars. Hypercars are blindingly fast, atrociously expensive and highly exclusive, even more than supercars. It’s a market focusing on the crème de la crème of the society, but it falls in the broader supercars category which is a high-growth segment, according to this Investopedia article.

Pininfarina’s Quest for Hypercar Glory

Pininfarina’s primary call to fame is being the designer of many iconic Ferraris, Maseratis, Fiats and Alfa Romeos (all belonging to the Fiat Chrysler group) as well as Cadillac models. Its electric hypercar will be priced at $2.5 million, targeting a tiny car buyer sub-segment that can afford cars like these and is also drawn to philanthropy and environmental preservation. Pininfarina is owned by Indian automobile giant Mahindra & Mahindra Ltd (NSE: M&M) that has a great deal of high performance electric powertrain experience as a result of its participation in the Formula E electric car racing championship.

Though Pininfarina has designed many iconic cars as well as office buildings, video projectors and other products, a luxury electric vehicle (EV) with hyper car levels of performance will certainly be the design house’s most challenging project particularly because of the capital required. Battery procurement is a major challenge, reckons Investopedia contributor Shoshanna Delventhal.

Supercar Sales Growth Triples Global Car Sales Growth 

Contrary to what all that exclusivity suggests, growth in supercar sales in 2017 actually tripled that of the global car market. While Tesla’s earlier electric cars are more in the supercar territory than the recently introduced, and more mass market targeted, Model 3, it is still a luxury electric vehicle. Setbacks in its production are not doing Tesla any good, with investors getting disappointed with all the production delays.

Will Tesla’s Model 3 Production Delays Hamper Its Position?

Tesla stock has struggled as a result, with the bears even saying that the company is close to bankruptcy, though the bulls are continuing to be hopeful. The company has had to raise a great deal of operating cash. And news of other manufacturers attempting electric cars only magnifies the sense of incompetence regarding Tesla. How long, till Tesla finally comes out of its production difficulties?

Recently, Elon Musk confessed that excessive automation at Tesla’s production facility was a mistake and blamed it for the production issues faced. He did give the reassurance that Tesla would increase its production, by year end, to 5000 vehicles per week. Tesla also announced that it wasn’t planning to raise more capital this year, which did manage to lighten the minds of investors.

Pininfarina to Source Batteries from External Supplier

Pininfarina isn’t likely to face such production issues though it doesn’t have experience in mass production. That’s because parent company Mahindra & Mahindra has tons of experience here. Besides, M&M has announced that it will not be making its own batteries for the electric hypercar. Instead, it would be sourcing them from another supplier.

Volvo in the Mix Too

Tesla and Pininfarina aren’t the only manufacturers with high performance electric car segment. There are others too, one of which is Volvo. The Swedish company, under Chinese owners Geely ($GELYF), has purchased the Polestar performance tuning company for building its high-performance electric car and navigate supply-chain issues.

There could be more players here soon, so it’s worth watching this space. Will Tesla finally come out of its Model 3 production issues, and how successful will Pininfarina and Volvo be in their electric high performance car plans?

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TradeZero is an online broker dealer that offers commission free trading of the US equity markets, US equity and index options trading. Its clients receive up to 6 to 1 intraday leverage and the ability to trade the US markets without any pattern day trading rules. TradeZero clients have access to a variety of cutting edge trading platforms which include real-time streaming market data.

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