In recent months, Cramer explained that electric car makers saw upward momentum through reverse merges and initial public offerings (IPOs).
Over time, he said it has started to look more like a bubble, expressing concerns about the market’s sustainability. He said:
I think the rest of the electric vehicle space looks like a boom, and then more like a bubble, one that’s already started to burst. We keep seeing more and more of them come public, often via reverse mergers with special purpose acquisition vehicles… and after some big moves higher, their stocks have started to implode.
Yet the demand for Tesla vehicles is continuously surging. Based on the trend, Cramer emphasized the bull market of the carmaker is real. He noted:
The bull market in Tesla is real and it’s spectacular. The bull market in the rest of the electric vehicle plays feels way less substantial, and once again I’m warning you to stay away, no matter how awesome it seems.
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At some point there’ll be a third Gigafactory, probably. This is literally a spur of the moment rough guess, probably we’d start construction in four years-ish. That’s just like my sort of stream-of-consciousness guess.
In the near-term, the electric car market’s slump and Tesla’s growth may achieve three things. It could increase Tesla’s market dominance, strengthen the carmaker’s brand, and increase production capacity.