The electric vehicle (EV) industry, once hailed as a burgeoning sector of growth and innovation, is now showing signs of significant strain.
Recent reports indicate a widespread downturn, with Tesla ($TSLA), a leading figure in the industry, making substantial workforce reductions.
The company’s decision to cut over 14,000 jobs globally, affecting its most significant markets in the United States and China, highlights deeper issues within the sector.
Tesla’s CEO, Elon Musk, pointed to falling sales and escalating competition in the EV market as the primary drivers behind these layoffs.
This move by Tesla, as our data will show us, is not an isolated incident but part of a larger trend affecting the entire industry. Analysis of job posting data reveals a general decline across many companies once considered growth engines.
Alternative data insights: What job postings tell us
At AltIndex, we utilize alternative data to uncover insights that traditional metrics might overlook. Job postings, for instance, can provide a forward-looking view of a company’s growth outlook. A decrease in postings often signals a strategic pullback, while an increase might indicate expansion plans.
Recent data analysis shows a sharp decrease in job postings over the last three months among major EV players:
| Company | Job Posts | 3m change | 3m change %Â | |
|---|---|---|---|---|
 | Canoo | 56 | -10 | 15.2% |
 | Rivian | 487 | -509 | 51.1% |
 | Polestar | 11 | -17 | 60.7% |
 | Workhorse Group | 1 | -5 | 83.3% |
 | Faraday Future | 1 | -12 | 92.3% |
 | Tesla | 235 | -5,815 | 96.1% |
In contrast, traditional automakers like GM and Ford have slightly increased their job postings.
Stock performance and investor implications
This reduction in job postings correlates with a noticeable trend in stock performance. Over the last three months:
GM:Â Stock up by 25%
Ford:Â Stock up by 20%
These figures contrast starkly with the performance of key EV stocks:
Tesla:Â Down by 31%
Polestar:Â Down by 37%
Rivian:Â Down by 42%
This divergence highlights a current investor preference for more traditional auto companies over EV-centric firms. The decrease in job postings among EV companies might reflect internal adjustments to market pressures such as reduced demand, fiercer competition, and broader economic challenges, which in turn could be affecting investor confidence and stock valuations.
What should investors do?
The significant reduction in job postings among EV companies, combined with the downturn in stock prices, marks a critical transition within the industry. These changes signal a move away from previous growth patterns, suggesting that these companies may no longer align with the traditional ‘growth stock’ profile in the short term.
However, this trend also presents a unique opportunity for investors. Those companies that first reverse this trend by increasing their job postings could be signaling a return to growth and a potential resurgence in their market position. Such a shift could represent an attractive investment opportunity, as it may precede improvements in financial performance and stock appreciation.
Investors are advised to keep a close watch on the job posting trends within the EV sector. Monitoring these changes can offer early indications of which companies are regaining momentum and positioning themselves for future growth. In addition to job postings, investors should continue to scrutinize financial reports and operational strategies to fully understand the financial health and long-term viability of these companies.
By staying informed through a combination of alternative data and traditional financial analysis, investors can better navigate the complexities of the EV market and identify promising investment opportunities as the industry evolves.
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