Beware! The coming EV disruption may turn stubborn OEMs into value traps

Innovations have often left erstwhile leaders in their wake. When incumbents have approached the seismic changes in their industries with a sense of denial until it is too late to respond, their eventual decline has been a foregone conclusion. The intervening period between the two events (sense of denial and decline) is generally a tricky period for investors, as the incumbents’ cheap valuation is juxtaposed against the probability of the disruptors’ success. In today’s article, I note how investors have been better off ignoring the incumbents’ value trap. Here’s a brief history of disruptions before we look at the current issue.