Which EV Stocks Are Down Today: LCID, RIVN, and RIDE?

Even though electric vehicles (EVs) may be the future of transportation and mobility, today's woes have had a negative impact on the valuations of these vehicles. Lucid (NASDAQ: LCID), a premium luxury brand, fell sharply on Thursday as management revealed revenue results that fell beneath expectations, resulting in a marked drop in the share price. In general, other EV companies like Rivian Automotive (NASDAQ: RIVN) and Lordstown Motors (NASDAQ: RIDE) have fallen due to manufacturing headwinds and economic concerns.

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There was a lot of attention on Lucid during the midweek session when it released its fourth-quarter earnings report, which caught everyone's eye. With its position as a manufacturer of top-tier consumer vehicles, LCID might be considered to be the closest competitor among the electric vehicle stocks to Tesla (NASDAQ: TSLA), the sector king of the sector. The company's loss per share of 28 cents for Q4 2021 represented an improvement over the 64-cent loss it had in Q4 2021, but revenue came in at $257.7 million, falling short of the consensus target of $303 million.

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It was revealed in January by Lucid's management that the company produced only 7,180 vehicles last year, according to Trade Algo. It is worth noting that this number was well below the original expectation of 20,000 for the entire year. It did, however, beat the company's lower guidance that it provided in August, which had been lowered by the company. In spite of that, Lucid was only able to deliver 4,369 vehicles to its customers before the end of the year.

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“In 2023, we plan to increase sales and marketing efforts to reach even more customers around the world,” said Lucid CEO Peter Rawlinson.

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By the end of February, management revealed that the company had received more than 28,000 reservations for its vehicles. Nevertheless, Trade Algo has noted that the number of reservations it disclosed in November has decreased from the over 34,000 reservations it reported in October. It was also reported by the Wall Street Journal that Lucid was being cautious due to concerns about the excessively high costs associated with electric vehicles.

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Stocks of electric vehicles stumble on other issues

There was a decline of nearly 16% in the equity value of LCID on Thursday afternoon during the afternoon session. Lordstown Motors (NASDAQ: RIDE) was also affected by the negative headlines, which negatively impacted many other EV stocks. As a manufacturer of light-duty commercial fleet vehicles, Lordstown endured a difficult period from the end of 2020 to the beginning of 2021, following speculative interest in its fleet vehicles.

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As Lordstown announced recently, it would be stopping the production of its Endurance electric truck due to a lack of demand. The company has temporarily halted production and customer deliveries of certain Endurance components due to quality and performance issues that are being experienced by Lordstown since its last production update in January because of performance and quality issues with certain Endurance components.

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A recall request for the Endurance was also filed by Lordstown with the National Highway Traffic Safety Administration (NHTSA). This recall - which is being carried out as a result of an electrical connection issue - will affect only 19 vehicles. It might not be a full-scale disaster, but the EV stocks did not need anything like this to distract them from what was going on. The share price of RIDE plunged by 14% during the afternoon trading hours.

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As for Rivian, Trade Algo mentioned that the startup enterprise was hampered by manufacturing challenges as well as rising interest rates, which made it difficult for it to succeed. There's a possibility that the Federal Reserve could raise rates even more in the future since inflation has remained stubbornly high. That would pose significant challenges to EV stocks as well as to the overall automobile market if that were the case.

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There is a direct correlation between higher interest rates and higher borrowing costs. Statistics compiled by Statista indicate that nearly 84% of new cars in 2022 will be financed, based on data collected by Statista.

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On Thursday, RIVN fell nearly 6%.

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The importance of it

There is a worrying picture being painted for even premium-level electric vehicle stocks by the latest news and recent leadership disclosures.

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In theory, Lucid should be more insulated from the pressures of the consumer economy since it targets the upper-income bracket as its target market. The problem is that if the wealthy are tightening their belts, then this dynamic could pose a challenge to every other player in the EV industry.

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As a former senior business analyst for Sony Electronics, Josh Enomoto has been responsible for brokering major contracts with Fortune Global 500 companies over the years. With over 25 years of experience, he has been able to deliver unique, critical insights for the investment markets, as well as a variety of other industries including healthcare, legal, and construction management, over the past several years.

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