The pandemic has sharpened the focus on the future of transportation, with experts confident that EVs will dominate the global auto market. Joe Biden’s win in the U.S. presidential election and China announcing plans recently to keep bolstering the industry have also raised expectations. That’s even as some of the companies have yet to report profits, with some market watchers questioning whether this is a bubble.
“Major countries around the world have been encouraging EV development as their main measure to cut carbon emissions, especially after the pandemic,” said Andy Wong, a fund manager at LW Asset Management in Hong Kong. “Tesla, Nio and XPeng saw improvements in autonomous driving recently, and it also helps lift their valuations.”
Musk’s rivals may be growing their wealth faster, but he’s sitting on the biggest total gains this year thanks to a 580 percent rally in Tesla shares. After Musk, the second-richest person among EV makers is Wang Chuan-Fu, founder of BYD Co., whose net worth has more than tripled to $14 billion.
In addition to Tesla and its bigger rivals, investors have also bet on newer firms in the sector with potential for rapid growth, creating another wave of self-made fortunes.
Fisker and Lordstown Motors Corp. founder Steve Burns have both become billionaires after taking their companies public this year through special-purpose acquisition vehicles, according to data compiled by Bloomberg. The firms’ U.S.-traded stocks jumped more than 85 percent last month, bolstered by the announcement of Tesla joining the S&P 500, now scheduled for Dec. 21.
Representatives for XPeng and Lordstown Motors declined to comment, while a BYD spokeswoman said China’s recent plan adds potential to the industry. A Fisker spokesman said the company is focused on its first vehicle, the Ocean SUV, which is scheduled to go into production in 2022. A representative for Nio didn’t respond to a request for comment.
“The size of the EV market seems to have gotten much bigger, creating an opportunity even for newer, smaller players to vie for a piece of that pie,” said Bloomberg Intelligence analyst Steve Man.
