Scotty Kilmer was right: the EV bubble is slowly deflating

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on Oct 26, 2023
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  • Electric vehicle stocks have plunged hard in the past few months.
  • There are signs that the EV industry is slowing dramatically.
  • Scotty Kilmer has warned about the future of EVs.

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The electric vehicle (EV) is going through a major challenge, confirming what critics have warned about for years. Many EV stocks, including Tesla (TSLA), Rivian (RIVN), and VinFast (VFS) have sunk recently. There are also signs that demand for EVs in key markets like China and the United States is waning.

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EV stocks have plunged

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There has been blood in the EV streets recently. Tesla stock price has crashed by 30% from its highest point this year. Similarly, Rivian and Lucid Motors, two of the best-funded EV startups have collapsed by over 30% in the same period.

Other EV companies have done worse. Faraday Future (FFIE), Nio, Mullen Automotive, Canoo, and Workhorse Group have all become penny stocks. Most of these companies are hanging on a thread, with bankruptcy risks remaining. Lordstown Motors was the first big EV company to go bankrupt a few years ago.

An in-depth look of the EV industry shows that the situation is likely worse than what most analysts believe. Tesla has already slashed vehicle prices several times this year. Most of its models are now selling for over 20% lower than where they were in 2022.

In its latest earnings report, Tesla warned that its revenue and volume growth were slowing. Meanwhile, other car companies are struggling in their EV endeavors. For example, General Motors abandoned its goal of making 400k EVs by mid-2024, citing slower growth. It recently abandoned its plan to expand its EV production.

GM is not alone. Ford has started cutting shifts in a plant that manufactures the popular Lightning pick-up truck. After initial success, Ford has seen demand for the truck dwindle in the past few months.

Worse, there are signs that Internal Combustion Engine (ICE) vehicles are selling at a faster pace than EVs. On average, ICE vehicles are staying in the market for about 52 days while EVs spend more than double that time.

TSLA vs RIVN vs LCID

RIVN, NKLA, TSLA, WKHS stocks

Scotty Kilmer has been an EV critic

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Other things are happening behind the scenes. ExxonMobil, the biggest western energy company, recently decided to buy Pioneer Natural Resources in a $59 billion deal. In another transaction, Chevron decided to buy Hess in a $53 billion deal. 

Meanwhile, European oil companies that invested in clean energy are pulling back. On Wednesday, Shell announced that it would lay-off hundreds of employees in its clean energy business. 

All these confirm what Scotty Kilmer has warned about for years. For starters, Scotty is one of the most successful car YouTubers in the industry with over 2.5 billion views. He is a mechanic with over 50 years in the industry.

In many videos, he has warned that the EV bubble would soon deflate and pointed to numerous factors. For example, he believes that EVs are a new technologies that have not been tested for decades.

He also sees a challenge in the charging infrastructure in the US and other countries. While EV chargers are now readily available, it takes a long time to get a full charge. This could change with solid-state batteries, which will be introduced in the next few years.

Further, Kilmer believes that EVs are not all that clean as advertised. In the United States, most of the energy that powers EVs come from coal and natural gas. Mining EV and transporting EV metals like lithium and nickel is not all that climate-friendly as well. EVS are also more expensive than ICE vehicles.

Therefore, I believe that EV stocks will remain under pressure for a while. I also suspect that many small cash-burning companies like Canoo, Faraday Future, and Mullen Automotive will ultimately file for bankruptcy.

Chevron China Coal General Motors Lithium Lucid Motors Mullen Automotive Oil Pioneer Natural Resources Rivian Shell Tesla USA Electric Vehicle (EV) Energy Manufacturing Precious Metals Startups Stock Market