Tesla has a dominant share of the electric vehicle market but Morgan Stanley’s Adam Jonas said Monday that control is “unsustainable” and will soon be disrupted from electric vehicle maker Rivian.
Jonas, whose thoughts on electric autos are widely followed on Wall Street, expects Rivian will be “the next serious competition from a ‘clean sheet’ start-up with access to talent & capital focused on the fastest growing segments of pickup trucks & SUVs,” Jonas said. He estimates that currently Tesla makes about 80 percent of the electric vehicles in the U.S., while capturing as much as 90 percent of U.S. electric vehicle revenues.
Rivian is a suburban Detroit start-up, which previewed its R1T electric truck prototype at the Los Angeles Auto Show in November. Rivian said the R1T will deliver 400 miles of range, with four individual motors allowing for all-wheel-drive. Additionally, Rivian CEO R.C. Scaringe said the R1T will be able to hit 60 mph in 3 seconds and tow up to 11,000 pounds.
Tesla may unveil an electric pickup truck this summer, CEO Elon Musk said during the company’s fourth-quarter conference call. In December, Musk talked extensively on Twitter about what he would like to include in a pickup truck design, including all-wheel drive with “crazy torque & a suspension that dynamically adjusts for load.”
Rivian is also building the R1S, which is an electric seven-passenger SUV. Rivian says the R1S will also have a range of over 400 miles.
Jonas said that Morgan Stanley has a “strong belief that all-electric vehicle architecture will need a truly ‘clean sheet’ approach” to take on Tesla, rather than “adapting existing legacy OEM architecture.” OEM is an auto industry term that stands for Original Equipment Manufacturer.
“We believe companies like Rivian will take elevated importance in investors’ minds as EVs become the focus of OEM investment and strategy,” Jonas said.
– Paul Eisenstein and CNBC’s Michael Bloom contributed to this report.