Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.

Twitter

The Musk effect on markets is a trend we’ve increasingly seen over the past year and it’s no different with the recent news around Twitter.

Last week Elon Musk announced he was purchasing Twitter shares and joining the company’s Board of Directors and, despite the latter not materialising, Twitter’s share price surged.

However, as the news flow became less supportive, the price also retreated – proof that traders should never just follow the zeitgeist. In fact, if we look at Twitter, the app has consistently been outperformed by social media competitors such as Facebook.

Despite this, new additions such as CEO Parag Agrawal and the introduction of new premium services including Twitter Blue in the US, Canada, Australia and New Zealand will hopefully bring in more revenue for the app.

Whilst celebrities and magnates like Elon Musk make the headlines, increasing publicity around Twitter, it is crucial investors don’t rely on the noise. 

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Not investment advice.  

The multi-billionaire entrepreneur has said he will “acquire all of the outstanding Common Stock of the Issuer not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share.” 

The proposal was delivered via a letter to Twitter on 13 April, with Musk saying that Twitter needs to go private in order for necessary changes at the company to occur. 

Musk has said that he would need to reconsider his position as a shareholder if Twitter does not accept his offer.

Following the news, Twitter shares are up over 13%. 

Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.

Tesla 

By now, Tesla is renowned for its well-performing stock as well as its prolific CEO, Elon Musk. But, the company has reached new heights, delivering 310,048 cars in the first quarter of 2022.

Despite ongoing supply chain interruptions and China’s zero Covid policy, Tesla broke their own sales record – delivering nearly double the 184,800 cars in Q1 2021.

With Tesla’s Berlin factory up and running, and the increase in overall production, momentum will only grow for the company.

Whilst this progress is impressive, it is the news of a stock split that has accelerated Tesla’s stock price. Investors may see this as a green light to invest in Tesla stock but they should be wary that a stock split could have little to no impact on the overall stock price.

An added facet for investors to consider is the concerningly high valuation of the company. This gives very little room for the company to stall or misstep, something which comes with the territory of the market. 

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. 

Not investment advice. Past performance is not indicative of future results.

According to filings made to the US Securities and Exchange Commission (SEC), Musk, who regularly puts out controversial Tweets, has taken a 9.2% stake in Twitter at the cost of $2.89 billion on Friday. 

Following the news, Twitter shares soared as much as 26% in pre-market trading, adding over $8 billion to its $31.5 billion market value prior to Musk’s interest being made public. Following the stock price jump, Musk’s shares are now worth approximately $3.6 billion. 

At the end of last month, Musk had said he was giving “serious thought” to creating a new social media platform after remarking that Twitter doesn’t allow for free speech. In a Tweet, the billionaire said, “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” 

Some analysts predict that Musk’s shareholding could lead to him taking an active interest in the social media platform which may result in a buyout. 

“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” said Dan Ives, an analyst at Wedbush Securities.

Shane Neagle, Editor In Chief at The Tokenist, explains what impacted Bitcoin in 2021 and where it goes from here.

Bitcoin’s Performance In 2021: An Overview

Bitcoin gained almost 50% in the last month of 2020, reaching an all-time high (at that time) of over $29,000. On the first day of 2021, the flagship cryptocurrency managed to surpass the $30,000 mark as it eyed further gains.

Throughout the first four months of 2021, Bitcoin resumed its rally with considerable momentum as digital finance adoption continues to pick up steam — for context, 71% of consumers now prefer to pay with a debit or credit card, as opposed to cash. This reflects a changing sentiment among consumer preference, where digital finance and FinTech are not only becoming more convenient and user-friendly, but actually preferred. While this does not directly impact the price of BTC, it certainly provides important context which cannot be ignored.

In mid-April, Bitcoin achieved a historic milestone by reaching the $65,000 mark. However, a combination of unfortunate events brought an end to this trend. It all started with Elon Musk announcing that Tesla halted Bitcoin payments over environmental concerns. For the same reason, China started a vigorous crackdown on crypto mining, further exacerbating the sentiment around Bitcoin. 

All of this prompted a sharp sell-off that saw the leading cryptocurrency plunge by as much as 50% compared to the April peaks over the course of a few months. In early July, Bitcoin even dropped below $30,000 for a brief moment, a level that was last seen in early January 2021, according to data by CoinMarketCap.

Bitcoin’s hashrate, the amount of computing power contributed to the network through mining, also took a plunge as a result of China's clampdown, dropping by over 50% in just one month. However, as Chinese miners settled overseas and started to resume their operations, the hashrate started recovering.

Historically, a high Bitcoin hashrate, which represents higher security in the network, coincides with prices moving higher. This describes why Bitcoin started to reclaim its lost territories as the hashrate was recovering. By October 8, Bitcoin hit a new ATH, as its hashrate was up by almost 85% compared to the bottoms seen in July. 

Eventually, Bitcoin’s hashrate fully recovered from the China ban in early December. Brandon Arvanaghi, a Bitcoin mining engineer, summarised the larger impact:

“The bitcoin network withstood an attack by a major superpower and emerged stronger than ever six short months later. How can anyone ever argue, ‘But what if nations ban it?’ again?”

What Caused Bitcoin's Rally?

Bitcoin's rally throughout 2021 was largely fueled by an influx of high-profile investors. Among the more noticeable examples, major electric carmaker Tesla acquired $1.5 billion worth of Bitcoin, while Michael Saylor's Microstrategy continued its Bitcoin buying spree, increasing its holdings to above 121,000 BTC. 

There were also some other factors that had an impact. For one, Bitcoin experienced its once-every-four-years halving event on May 11, 2020, cutting the reward for mining Bitcoin transactions from 12.50 BTC to 6.25 BTC. In other words, the rate at which new bitcoins enter circulation was cut in half. The event is regarded as important since it has historically correlated with intense boom and bust cycles.

Furthermore, when the pandemic hit the US, it triggered a deep economic downturn, prompting the Fed to take significant measures to limit the economic damage. Among the first moves, the central bank cut the interest rate by a total of 1.5 percentage points, lowering the rate to a range of 0% to 0.25%.

While banks were offering near-zero rates, crypto-assets were delivering triple-digit returns. Bitcoin, for instance, gained almost 300% during 2020. Moreover, crypto lending products offered well over 7% APY on less risky products like stablecoins, which are crypto-assets pegged to fiat currencies at a ratio of 1:1. 

This prompted some investors, including Billionaire and Shark Tank star Kevin O'Leary, to get exposure to crypto. This wasn’t a private matter, resulting in great publicity for the digital asset. And in a similar light, Bitcoin and digital assets have become increasingly accessible, as a growing list of traditional stockbrokers now offer select digital assets. Even the majority of paper trading apps now include digital assets such as Bitcoin.

As another measure, the Fed also started buying massive amounts of debt securities to abate the economic damage and restore the smooth functioning of markets. Initially, the central bank was buying trillions of dollars of bonds, slowing the pace to $120 billion per month by mid-2020, and eventually to $15 billion per month by 2021.

However, the strategy also referred to as quantitative easing, is largely criticised for causing inflation. Some experts warn that quantitative easing is effectively a form of money printing, which leads to inflation—and potentially even hyperinflation—in the long term. 

Nevertheless, the emergency moves by the Fed, accompanied by massive government spending, managed to prevent the economy from sinking into a prolonged downturn. However, several factors, including supply chain bottlenecks and labour market issues, resulted in rising inflation. 

Most recently, the Consumer Price Index (CPI), which measures the average change over time in the prices, climbed by 6.8% in the year through November, hitting its highest level since 1982. This rising inflation also pushed some investors towards Bitcoin and the broader crypto market. 

In mid-October, strategists at JPMorgan reported that inflation concerns were pushing investors towards Bitcoin. "We believe the perception of Bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into Bitcoin funds since September,” they said. 

Likewise, billionaire hedge fund manager Paul Tudor Jones told CNBC that Bitcoin is a better hedge against inflation than gold:

“It would be my preferred one over gold at the moment. Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment."

Bitcoin In 2022: Where Is It Heading?

While it is largely unclear how Bitcoin will perform in the upcoming year, some analysts believe it may perform poorly as a result of the expected rate hikes. In mid-December, the Federal Open Market Committee (FOMC), the Fed's monetary policy arm, said it aims to speed up tapering of its bond purchases so that the programme would end in March.

The central bank also noted that it plans three hikes of the benchmark interest rate in 2022. Usually, risk assets like Bitcoin take a hit when interest rates increase. “To the extent BTC is a hedge like gold, I think it could suffer,” said economist Claudia Sahm.

On the other hand, there are some levels of optimism around Bitcoin. For one, Bitcoin's long-anticipated update Taproot was implemented around mid-November. The update, which gives developers an expanded toolbox to integrate new features, is deemed a game-changer for Bitcoin as it could put it on a par with Ethereum, which hosts nearly the entire decentralised finance (DeFi) ecosystem.

Moreover, Securities and Exchange Commission Chairman Gary Gensler said in early October that the US won't ban crypto assets. “Our approach is really quite different,” Gensler said, ensuring investors that the regulatory body does not intend to ban crypto as other jurisdictions have done. The regulatory body has also approved several Bitcoin-linked ETFs.

Meanwhile, some theories suggest that higher nominal rates could actually have a positive impact on Bitcoin. Data accumulated by Caleb Franzen, a market analyst, shows that there is a direct correlation between Bitcoin and 10-year Treasury yields, which is not normally seen between risk assets and yields. Based on this correlation, Franzen argues that Bitcoin could continue its upward movement despite yields increasing. He added that this scenario will more likely play out if inflation persists in 2022.

Musk has been selling off chunks of Tesla stock since asking his Twitter followers in a November Twitter poll whether he should sell some of his stake in the company. “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” Musk wrote, causing Tesla shares to drop by 24%. 

3.5 million Twitter users voted 57.9% in favour of the move by Musk. He later said he would exercise options toward the end of the year. 

According to regulatory filings, the billionaire has now sold around 13.5 million shares for approximately $14.1 billion. However, to fully meet his 10% pledge, Musk still needs to offload some 17 million shares. 

According to Forbes, Musk’s net worth currently sits at $245.6 billion. 

Michael Kamerman, CEO of Skilling explains why crypto is here to stay. 

On the one hand, the continuing emergence of new cryptocurrencies presents a new way for traders to manage their finances, but on the other, crypto is perceived as a “get rich scheme” influenced by endorsements from celebrities and social media. The Bank of England is pushing to regulate crypto, arguing its volatility poses an existential threat to the global financial system, which is problematic for those who know of its potential and see its drive within the younger generation. Today’s retail traders must apply emotional intelligence and carry out thorough research in their crypto trading if they wish to reap long-term rewards from its growth.

Crypto’s misguided reputation

For those not yet involved in crypto trading, the crypto world may seem slightly daunting to begin putting their hard-earned money into. Its current volatility is sometimes directly driven by notable influencers online such as Elon Musk who recently, upon simply sharing a picture of his dog on social media, dramatically raised the value of the Shiba Inu coin - which is now the world’s 11th largest crypto. Social media influence from magnates directly causing the rise and fall of crypto assets has also been seen with other popular cryptos such as Dogecoin, emphasising the importance of applying emotional intelligence when trading.

It doesn’t help that many brokers have taken advantage of the current crypto zeitgeist to create novel crypto coins and tokens – leading traders to unwittingly embark on “pump and dump” schemes. Taking advantage of novice traders by promising to multiply their investment, only to then pull the rug out from underneath them, has also unfairly tarnished crypto’s reputation, epitomised by the recent Squid Game tokens scandal.

However, instability is to be expected with a decentralised asset such as crypto. The fact that it is not issued, regulated, or backed by a central authority cannot be foolishly overlooked. Whilst this can be attractive to novice and younger traders in particular, traders must be mindful of what exactly they are putting their money into by conducting extensive research and not allowing themselves to become emotionally influenced by any social media hype. Crypto can prove to be an incredibly successful financial investment if traders aren’t foolish. After all, you wouldn’t invest in a property without carrying out your due diligence beforehand, nor would you invest in it simply because a celebrity promoted it, so why would you when it comes to crypto investment?

Emotional intelligence and crypto

With a social media post about crypto being uploaded every 2 seconds on the internet, fluctuations in a crypto coin or token’s value are often driven by the over-excitement or fear that comes with it. Fear of missing out on a profit or losing money may cause traders to make a regrettable decision with their trading, resulting in “bad plays” as the value of the coin dramatically changes, for seemingly no reason, sometimes in the space of a few hours.

To mitigate risks, traders need to make sure they are emotionally rational with their investment decisions. Constantly looking at the price of a coin in fear of losing money or missing out on a gain, can do more harm than good, leading to reckless, unwise decisions being made. Instead, being thorough in prior research of a crypto and trusting in its value will help make sure a social media post from a particular celebrity doesn’t cause traders to panic.

A young person’s game

Traditionally, consumers looking to diversify their financial portfolio would likely consider investing in stocks and bonds as a “safe” way of ensuring long term financial gain. Today’s older generations, who started their investing journey decades earlier, are now reaping the benefits and are less concerned with making money in the short-term in a way that might be risky.

For today’s younger, more adventurous and risk-taking traders, stocks and bonds are too slow a way of making money. With many having the luxury of more time on their hands, they can afford to take bigger risks with their investments to multiply their money faster than traditional forms of investments. Crypto is the perfect asset for them to champion, with certain tokens having incredibly innovative business models and using technology in ways that will likely continue to shake up the industry in the coming years. 

Nevertheless, with investing in something as exciting yet volatile as crypto, retail traders need to keep a level head to ride through the inevitable peaks and troughs. Prospective traders should make sure to assess crypto investments as they would any other investment, as being too emotionally vested in the initial outcome may end up hurting their capital, leaving them disillusioned and dissatisfied.

Ultimately, crypto is like any other asset in the market - its value is driven by investors who bump and lower the price. What is fundamentally different, however, is the severity and speed by which its value can change. In such a volatile space, it is crucial that investors are considered, thorough, and apply significant emotional intelligence if they wish to successfully cash in on crypto investment.

This article does not constitute investment advice. 66% of retail CFD accounts lose money. Trading cryptocurrency is not available for UK retail clients.

Turning to Twitter, Musk said, “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?"

3.5 million Twitter users voted 57.9% in favour of the move by Musk, who launched the poll following criticism that he does not pay enough tax. 

"Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock," Musk also tweeted. The 10% stock is worth approximately $21 billion. 

Following Musk’s Twitter poll, shares in Tesla fell 7.6% in early trade on Germany’s Tradegate on Monday. In late October, Tesla passed a trillion dollars in market cap, joining several other big companies such as Amazon, Apple, and Microsoft. Around this time, some of Tesla’s board members chose to sell a large number of shares, including Elon Musk’s brother Kimbal Musk.  

The clean energy car manufacturer’s stock market value has soared throughout 2020 and 2021 as investors bet on accelerating sales of electric cars in a global push towards increased sustainability amid the climate crisis. By 2030, the UK government plans to ban the production of petrol and diesel cars to meet national climate targets. 

On Monday, Tesla shares increased by as much as 9% to as high as $998 following the announcement of Hertz’s 100,000 vehicle order. The shares later returned to below this level. Nonetheless, it marks a major milestone for Elon Musk’s company. 

The milestone follows a record quarter for Tesla in which its Model 3 became Europe’s best selling car in September. This was the first time a battery electric vehicle topped the monthly sales chart in the continent.

Hertz has said that the vehicles would be delivered by the end of 2022 as part of its goal to build the largest EV rental fleet in the United States. It is understood that the purchase could cost as much as $4 billion, even with a bulk discount. 

The rise in Tesla’s share price has further boosted the fortunes of its founder and CEO. Even before Monday’s gains, Musk’s gains stood well above the $250 billion mark.  

If you’ve only recently started to buy bitcoin, then you might be in net loss right now.  Down nearly 50%, it once again proves that volatility can come even at the most bullish seasons.

Many investors claim that the current price does not reflect the condition of the market. They talk about manipulation from traders, FUD from influencers, and other issues we have seen so many times before. In this article, we take a critical look at the current landscape of the market, whether the price reflects reality, and what could cause the sustained and continuous drop in bitcoin’s value. Let’s delve in.

Bullish news keeps on coming

Over the past few weeks, Bitcoin has made front-page news once again, as it has now reached geopolitical significance. During the Bitcoin 2021 conference, we witnessed a rather emotional speech from Jack Mallers, founder of Strike, who made what many consider one of the most important announcements of the year. Nayib Bukkele, president of El Salvador, has been in contact with Jack, in order to set out a plan which would make Bitcoin legal tender in the country. Two days later, the bill was submitted and approved, setting a giant milestone in Bitcoin’s path to global currency status.

Shortly after the decision was made, El Salvador’s president changed his Twitter avatar, adding laser eyes, a symbol often used by Bitcoin maximalists who believe in the coin’s future. The move caused a domino effect, with many politicians across Latin America following his example. In just two days, many more countries seem to be ready to adopt the Bitcoin Standard.

Does the price reflect existing demand?

The current price of bitcoin seems to be quite low given the bullish news. However, during this period of time, analysts have been tracking the movement of coins across the board, and came up with some interesting observations:

• The large price drop was mainly the result of trader liquidation. Millions of traders hit their stop loss targets after the price started dropping, causing extreme fear in the markets.
• Coins have been steadily moving from new wallets to older wallets. This means that new market participants are selling at a net loss to older participants, who have more experience in the market.
• Bitcoins in dormant wallets (>2 years old) barely moved during this period of time, signaling intact conviction. Price dips are natural in bull markets, even if the dip is larger than most people expect.

In short, the current price does not reflect the true value of bitcoin and the actual demand for the cryptocurrency. 

Potential reasons for low prices

So what are the reasons for the current low prices across the board? There are many potential explanations:

• China recently banned Bitcoin once again and is now looking to make arrests of 1100+ people involved in illegal mining practices.
• Elon Musk has been on a rampage of “bashing tweets” towards bitcoin, which have instilled fear in retail and thus a tendency to sell.
• Senators in the US are now talking of a potential banning of FIAT onramps and offramps as a collective, having multiple countries go against the decision of El Salvador. This is, in reality, the last resort, as there is no way to ban the network itself.

The latest point is the most important here, as it would expedite transactions made purely in bitcoin instead of cashing out to FIAT first. By doing this, the public would eventually start dealing in satoshis and move towards the Bitcoins standard even faster.

Bitcoin saw an 11% price increase after Tesla CEO Elon Musk stated that his company will start accepting bitcoin once miners begin to use cleaner energy. Turning to Twitter, Musk said: “When there’s confirmation of reasonable (~50%) clean energy usage by miners with a positive future trend, Tesla will resume allowing Bitcoin transactions.”

Back in February, Tesla revealed that it had bought $1.5 billion of bitcoin and stated that it would accept the cryptocurrency on its cars. But, by last month, Tesla did a U-turn, announcing that its vehicles could no longer be purchased using the digital currency. Tesla said this was due to bitcoin’s increasing use of fossil fuels for its mining. The announcement resulted in the cryptocurrency crashing. 

Analysis by Cambridge University suggests bitcoin currently uses more electricity annually than the whole of Argentina. The mining process to create new units of bitcoin involves solving complex mathematical equations, which is reliant on high levels of computer processing power. Many critics believe that there is no such thing as “green bitcoin” as miners will always opt for the cheapest option to maximise their returns. However, others believe that institutional investors can lead bitcoin down a more environmentally sustainable path. Yves Bennaïm, the founder of non-profit Swiss think tank 2B4CH, has argued that as big investors like Tesla boost digital currency prices, there’ll be a greater incentive for investments in renewable energy sources. 

Big news in early January was a Porsche Taycan knocking off nearly an hour from Tesla’s record for driving an Electric Vehicle (EV) across the USA in just 44 hours and 26 minutes. Most people think Tesla will soon be back on top, perhaps by using a new 600-mile range, fast-charging battery (which could be a possible option costing a paltry $180,000 when you spec your new car); or, it might be some new producer that takes the Cannonball Trophy.

A few weeks ago I wrote in my market commentary, The Morning Porridge, about the 120-160 new Electric Vehicle companies feeding the frenzy in the EV sector. (No one is quite sure how many are genuine…) All of them are making grand promises about why their tech is better, how they are going to revolutionise the sector, and presenting vaguely sketched plans to achieve profitability by selling 5 million units by 2025.

That’s unlikely to happen.

As we transition from conventional Internal Combustion Engine (ICE), EV demand might hit 12-15 million electric vehicles by 2025 and maybe 25 million by 2030. Yet, the current market valuation of these 120+ speculative EV startups is around $300 billion – which is an awful lot of money someone is going to lose when it becomes clear that, no matter how marvellous and inventive they are, there just won’t be a big enough market for them to deliver into.

Many of these new firms contain the kernel of a brilliant idea. They could revolutionise all kinds of things we didn’t realise we needed until they invented them. Supporters will say: “These aren’t auto companies, they are creating new energy/autonomous driving/tech opportunities….”.  The reality, however, is that the whole startup EV sector looks like a massive tech-struck speculative bubble.

But the EV is here to stay.

Tesla deserves the credit for starting the revolution and has reaped the rewards. Its stock currently trades somewhere north of unbelievable and is likely to go even higher (all the way to absolutely ridiculous). Some analysts see it going even higher, as it expands its footprint to make and sell cars in China. There will soon be a Berlin factory to supply Europe. It may also finally deliver on promises to expand production from 499,000 vehicles in 2020 towards maybe 5 million in a few years. (Few being a random number between 3 and 30.)

There is plenty of evidence to suggest that keeping a standard ICE engine and planting a tree every time you fill the tank is a better route to achieving carbon neutrality than buying a Tesla.

Does it matter how many cars Tesla sells? The reality is that the company doesn’t make a brass cent of profit from selling cars – its sparse profits have all come from the sale of regulatory credits. That has not deterred all these new entrants to the market who intend to compete with it. They are riding a tidal wave of new technologies and innovations aimed at overcoming the critical issues with EV: the high costs of batteries, limited range, lack of charging infrastructure, and the time it takes to recharge.

Battery makers are some of the most inventive people on earth, filing more patents than just about any other tech sector. New, bigger, faster batteries will be one way to go – except that demand for lithium is going through the roof, casting doubt on the future of EVs if the batteries become prohibitively expensive. The sector is founded on the belief that widespread adoption will cause the cost of batteries to fall – ignoring the reality that lithium is a very scarce resource.

To solve the range and cost conundrum, a Chinese EV maker has had a great idea: sell cars without batteries and switch in a new fully charged unit at any conventional petrol station. There are new lithium-ion phosphate batteries that work and charge faster at high temperatures. Neither of these will solve the cost problem. Fortunately, there are carbon-ion batteries on the horizon that will charge fast, are solid-state with limitless life, and are cleantech, but they aren’t energy-dense (i.e. range) yet.

There are other, deeper issues to resolve. There are the social implications of EVs, (the “S” in ESG), including mining (child labour, exploitation of poor countries, and environmental degradation), the longevity of batteries (they just don’t last long and most won’t go more than 100,000 miles), and the difficulties and pollution problems connected to recycling them.

There are also doubts that EVs are the right way to address the “E” (Environment) in ESG. Potential customers looking to go green may conclude that more efficient hydrocarbon ICE engines, or hydrogen fuel-cell cars (in the future) are cheaper and better for the planet in the long run. There is plenty of evidence to suggest that keeping a standard ICE engine and planting a tree every time you fill the tank is a better route to achieving carbon neutrality than buying a Tesla.

However, the real winners in the EV space could very well be very automakers that Tesla set out to replace – the existing big firms. Tesla was founded in 2003 and it took years for the big firms to perceive and recognise the scale of the threat. (Musk bought his way into the firm in 2004 with a $6.5 million series A investment – a trade that’s made him the richest man on the planet… that’s genius.)

All the big automakers are now wide awake to the EV threat. The A-Z of makers, from Alfa Romeo to Volvo are all planning EV launches. These firms have a pedigree going back a century or more. They have the weight and heft, plus the networks and infrastructure to design, built, market and sale new EVs… if only they could get it right.

That’s what’s been proving difficult.

Tesla’s great success comes from its fundamental advantage – it was never a conventional carmaker. It wasn’t burdened by the baggage of years of building ICE engines, conventional drive trains, engineers opining on how many cylinders it will require to make it go faster, and cost accountants who understood the input and output costs of their industry.

All the big automakers are now wide awake to the EV threat. The A-Z of makers, from Alfa Romeo to Volvo are all planning EV launches.

Tesla started with a clean sheet, reimagined the car and electric engine, the potential of software and upgrades, and designed everything else around that. Everything that’s followed has been incredible. Some of it has debatable provenance - myths created around the brand including the new religion that Musk is a tech messiah and inventive genius. It’s simple - a car, an electric engine and a battery.

Tesla rode its own wave as demand was stoked by the environmental proposition, conveniently ignoring the pollution and recycling issues, and subsidy from the government. The image has been polished by the narrative that it's not a car company – instead, it's about energy, data, batteries, autonomous driving, etc. The final stroke of genius was to market it by closing the marketing department and nurturing fans prepared to big up Tesla on social media and day-trading investment sites.

In contrast, the big auto firms have moved at glacial speed; tripping over their internal ICE bureaucracy and making some terrible mistakes. They are still designing EVs as if they are conventional cars. After being caught falsifying emissions, VW has staked its future on EVs, but their ID.3 offering is lacklustre, dull and can’t yet be updated over the net. The Porsche Taycan struggles in performance terms versus the cheaper and older Tesla.

One of the funniest things I’ve read recently is “Renaulution” – the plans of Luca de Meo, CEO of French carmaker Renault, to turn around the producer of perhaps the world’s least desirable cars by becoming Europe’s leader in EVs. He plans to move Renault from “a car company working with tech to a tech company working with cars”.  It’s announced grand but probably empty statements full of corporate verbiage such as “the brand will embody modernity, and innovation within and beyond the automotive industry in energy, tech and mobility services...” I didn’t bother to read further because Musk has already said it. Better, clearer and his firm has delivered.

But and here is the nub… VW got it wrong with its first EV. I bet the coming ID.4 will be much, much better. The firm has learnt that the EV paradigm shift pioneered by Tesla is about the cloud, software and apps just as much as getting the tech right. BMW’s new iX can only be described as “fugly”, but it’s got range, it’s lightweight, it’s fast and has cachet because it’s a BMW.

In the next few years, most of the old auto firms will have played catch-up and will be offering cars the public wants to buy. They will offer lots of options, have the service and networks to follow up, and they will also be able to offer alternatives like hybrids which may be ultimately better options. They will have learnt how to adapt – meaning if hydrogen ever becomes a realistic option, they can move fast. And in the meantime, they will be eating Tesla’s lunch. They will take EVs up the evolutionary road to the same stage ICE cars are… commodities.

For full disclosure: because of the range, recycling and battery life issues, I’m thinking about buying a plug-in hybrid Land Rover to replace our ageing Fiat Roller-Skate (which in 10 years has done 6000 miles of to-the-shops and back.)