24/7 Wall St. Insights
- Rivian Automotive Inc. (NASDAQ: RIVN) is the worst-performing car stock this year.
- Investors worry that the struggling EV maker will not survive as a public company.
- Also: Dividend legends to hold forever.
CNBC made a list of car stocks ranked by stock performance in 2024. Of the 14 companies listed, Rivian Automotive Inc. (NASDAQ: RIVN) was at the bottom, with a share price down 55%. General Motors Co. (NYSE: GM) topped the list with a 55% gain. The second worst-performing stock was that of another small electric vehicle (EV) manufacturer. Lucid Group Inc. (NASDAQ: LCID) shares dropped 48%.
Rivian went public in November 2021. Its share price topped $100, which gave it a market cap of $86 billion. That is about double Ford’s market cap today. Ironically, Ford was one of Rivian’s early investors. Recently, though, Rivian’s shares dropped to $11 a share.
Investors have worried that Rivian will not survive as a public company. Like many companies that post significant losses, it is in a race to become profitable before it runs out of cash.
Difficult problems have hit Rivian this year. The most troubling of those is that supply chain issues have caused the EV company to cut back production. It described the problem, which is key to one of its engines, as “acute.”
Rivian’s production and delivery numbers are shockingly low for a company that relies on unit growth to profit. For instance, Rivian produced 13,157 and delivered 10,018 vehicles in the third quarter. At the same time, it cut guidance for annual production to between 47,000 and 49,000 units.
Another sign that Rivian cannot solve manufacturing problems was its third-quarter revenue. It fell to $874 million from $1.34 billion in the same quarter a year ago. The company posted a net loss of $1.10 billion, compared to $1.37 billion the year before.
Finally, Rivian operates in an EV market where demand is well below what was expected just a year ago. EV sales were supposed to climb in the United States as drivers switched out of gasoline-powered cars. However, that did not happen in 2024.
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