The EV Landscape Today
Tesla rose about $8 in an attempt to bounce back. BYD has become the standard for scaling the EV business. Rivian edged up 2 cents ahead of an afternoon earnings report.
Rivian's Problem
Rivian sits in a tough spot because it depends only on the US premium EV market. Consumer demand and sentiment for electric vehicles have been weak ever since the Biden-era tax credits expired in the United States. Higher oil and gas prices this year led some to expect more EV buying, but Rivian's stock never gained from that. Its business is almost 100% US-based, which leaves it exposed.
The better way to view this industry is the whole global ecosystem. China leads on EV adoption because it still runs strong government incentive programs. The Crane Shares Global Electric Vehicles and Future Mobility ETF, ticker KARS, takes that global approach. It holds Chinese firms like BYD and US firms like Rivian. This year KARS has beaten Rivian, mostly thanks to its stake in materials companies that gained from rising commodity prices. The actual EV makers in the fund, including Rivian, dragged on returns, while the firms extracting and supplying resources to EVs, robotics, and other industries lifted it.
For an investor who wants a pure play on the US EV market and believes EV spending and adoption will return, Rivian is a reasonable bet. Lucid falls in the same category: a US premium-market EV maker with the same setup. Both are the clearest pure plays on mostly US EV demand.
Tesla: Passed the EV Test, Now the Robotics Question
Tesla has passed the EV test. It saw strong adoption worldwide, including in China, the world's largest EV market, which is why KARS stays overweight there. Tesla was the first pure-play EV maker and the leader, and it has done the best in the space.
A simple way to judge Tesla: first check that the core EV business funds everything else. If EV sales slip, executing the other plans gets much harder. The stock is priced for that other work to succeed. To pivot into robotics, Tesla needs profits and cash to spend.
Elon Musk is a wild card who can pull funding from different sources. Policy could drive more demand for robots made in the US, since most humanoid robots are made in China, and Tesla could benefit if it actually starts shipping them. Other funding paths exist too, such as a possible spin-off or a talked-about combination of Tesla with SpaceX. These are very different businesses, but both live inside Musk's ecosystem, and either move could shape how the robotics buildout gets funded.
There is more opportunity in Tesla than in the others. Tesla is down more on the year than Rivian, yet it still trades at a high price-to-earnings ratio of 60 times, so how it funds the robotics shift stays an open question. China shows a workable route: manufacturers there have converted EV production lines into robot production. Tesla holds one of the largest manufacturing footprints in the United States and some of the most EV infrastructure, so it could shift partway into humanoid robots without needing a huge new capital outlay.
For now, Tesla is still really a vehicle company. It has delivered no robots year to date. Because of that, the Crane Shares Global Humanoid Robotics ETF, ticker KOD, does not yet hold Tesla, since none of its Optimus units have shipped. Investors are working hard to figure out how to value the stock, as a pure-play EV maker or as a robotics company.
A Defined-Risk Tesla Options Trade
Tesla is the most oversold it has been since March 2025, even with the day's pop. Its RSI stayed under the 30 level, considered oversold, for the last few days as the stock slumped after earnings.
You can take a directional bias without being aggressive, so you can be wrong and still profit. The trade uses the August monthly options, about 22 days to expiration: sell a neutral-to-bullish short put vertical. Sell the August 295 strike put and buy the 275 strike put against it to stay risk-defined, a $20-wide spread. That collects a credit of about $5.50, so you can make $550 with about $1,450 at risk. Risk runs higher than reward, but the break-even drops to $289.50, roughly 5.5% below the current share price, giving a cushion. The short 295 put has about a 62% chance of finishing out of the money at expiration, so the odds favor success. The trade works if the stock consolidates, moves higher, or even drifts a little lower while staying above the break-even.
Market Backdrop
The morning looked like momentum striking back after losses the day before following the Fed. The NASDAQ 100 was up over 3%, wiping out the 2% drop from the prior session. This is a momentum trade, and caution is warranted ahead of Apple and Amazon earnings after the close. By late morning the gains started to slip off the highs.
