Palo Alto, California-based electric vehicle manufacturer Tesla Inc’s chief executive officer Mr. Elon Musk has expressed confusion at the soaring valuations of new entrants into the space. Tesla, the first American company to manufacture and sell electric vehicles capable of exceeding 200 miles in traveling range, is now playing in a market where other companies plan to launch their products. One company that has caught consumer interest is another Californian company, now referred to as Lucid Group who plans to deliver its luxury Lucid Air electric sedan to its customers this month.

Elon Musk Expresses Confusion At Soaring Valuations Of Lucid Group and Rivian Automotive

Musk made his latest comments on the soaring valuations of Lucid and Rivian on the social media platform Twitter. He responded to a tweet comparing the valuation of Tesla when it went public with the ones the other two have secured far. This data was presented alongside deliveries made by the three companies, and it revealed that while Tesla had delivered 1,400 vehicles when it went public, the others are yet to make a single one.

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The current state of the electric vehicle industry is significantly different from when Tesla decided to sell its shares to the general public. This change, which is mostly due to Tesla’s success, has resulted in strong retail and institutional investor enthusiasm for the sector, and it is this change that Mr. Musk described as “strange.”

After Tesla was incorporated in 2004, Musk joined the company less than a year later when he invested $6.5 million in the company and became its board chairman. He would then become Tesla’s chief executive, a role that allowed him to oversee the company’s daily operations directly, soon after Tesla’s earliest co-founders Marc Tarpenning and Martin Eberhard, departed from the company.

An image tweeted by Twitter user @WR4NYGov comparing the delivery and valuations of Tesla, Rivian and Lucid when they went public. Note: Rivian is yet to sell its shares publicly, but it has disclosed a valuation of $80 billion. Image: @WR4NYGov/Twitter

The executive’s initial response to the image tweeted (shown above) simply stated that:

These are strange days

11:05 PM · Oct 14, 2021·Twitter for iPhone

He then wondered whether it was possible in the current environment for a company to market itself as developing electric vehicles and secure a valuation lesser than $1 billion without making any deliveries.

Musk’s remarks in this aspect were as follows:

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If it possible to start an EV company without shipping any cars & get a valuation less than a billion dollars!?

11:22 PM · Oct 14, 2021·Twitter for iPhone

Musk, who has shared his struggles with executing mass production several times, added a cautionary note for new entrants into the electric vehicle market. Prior to wondering about valuations, he cautioned them to be wary of the worries that accompany scaling up a new company’s operations in several business areas.

According to him:

I hope they have a high pain tolerance. Scaling production, supply chain, logistics & service is a world of hurt.

11:16 PM · Oct 14, 2021·Twitter for iPhone

Lucid Group’s Lucid Air luxury electric vehicle is the talk of the town. Image: Andrew Krok/Roadshow

Since Tesla started selling the Roadster in 2008, the industry has significantly grown, and Lucid Group’s Lucid Air is a vehicle that has impressed investors and reviewers alike. The Air has an Environmental Protection Agency (EPA) estimated range of up to 520 miles (for the higher end variants), and reflecting its luxurious nature, the vehicle has a starting price exceeding $70,000.

Rivian, on the other hand, focuses on sports utility vehicles (SUVs), pickup trucks and delivery vans. The company’s vans have already received an order from retail giant Amazon, and it kicked off production of its R1T pickup truck in September this year.

On the other hand, Tesla delivered roughly a quarter of a million vehicles in the third quarter of this year, representing roughly half of the company’s deliveries made during 2020. Its success with a manufacturing facility in China injected fresh optimism into the company, which investors rewarded via a meteoric rise in share price. Since the start of 2020, Tesla’s share price has grown by an astounding 880%, and since its initial public offering, the shares have appreciated by an eye-popping 21,853% based on closing prices this Friday for a market value of $834 billion.