Investing

Lucid and Rivian Stock Take a Beating From Wall Street

Douglas A. McIntyre

Published: December 5, 2023 9:40 am

Shares of troubled and small electric vehicle (EV) makers Lucid Group Inc. (NASDAQ: LCID) and Rivian Automotive Inc. (NASDAQ: RIVN) continue to take a horrible beating. Rivian stock is off more than 80% in the past two years. Lucid stock is down slightly more. Over the same period, the S&P 500 is slightly higher. The sell-offs are because many investors think neither company can survive the tidal wave of competition from Tesla and most of the world’s largest car manufacturers, which have spent billions and will spend billions more to move into the sector.

In the most recent quarter, Rivian produced 16,204 vehicles. Over the same period, Tesla produced over 400,000. Rivian lost $1.7 billion on revenue of $536 million.

In its most recent quarter, Lucid delivered 1,457 vehicles. It lost $630 million on revenue of $137 million. (See the 15 worst-selling electric vehicles this year.)

Skepticism About Lucid and Rivian

Generally, Wall Street’s skepticism about the two EV companies is based on comparisons with Tesla and whether they can take any share from the market leader. That would be a mistake. Huge public corporations that can and have invested billions of dollars to get into what each believes is the industry’s future is a challenge neither Lucid nor Rivian can stand up to.

The target for most huge international car companies is that half or more of their sales will be EVs by 2030. Some already have had vehicles on the market for over a year. This includes Ford’s F-150 Lightning, the EV version of the most popular vehicle in America for the past four decades. Ford is also using its Mustang brand for one of its EV ventures. Known as the Mustang Mach-E, it is Ford’s first move into EV crossovers.

GM’s Chevy Bolt has had strong sales and is the primary placeholder until America’s number one car company can launch a larger EV fleet. Its Chevy Blazer, a part of this step into the market, was recently named the Motor Trend SUV of the Year.

GM and Ford are just a fraction of the EV onslaught. Every major German, Japanese and South Korean manufacturer has started to launch EV fleets.

The final challenge for Lucid and Rivian is that the market has turned to hybrids, which the EV industry did not expect. That erects one more barrier.

One thing can be said for Rivian and Lucid for certain. They are too small to compete.