Source – techshots
Challenges in Production and Economic Uncertainties IImpact Shares
Shares of electric vehicle manufacturers Rivian and Lucid experienced a sharp decline on Thursday following the release of disappointing fourth-quarter earnings. Rivian shares plummeted approximately 25%, while Lucid’s stock saw a nearly 17% decline in value.
Production Forecasts for 2024
Rivian’s outlook for 2024 anticipates the production of 57,000 vehicles, a slight decrease from the 57,232 vehicles manufactured in the previous year. Lucid, on the other hand, projects the production of 9,000 vehicles in 2024, representing a modest 7% increase compared to the 8,428 vehicles produced in 2023.
Financial Performance and Workforce Reductions
While Rivian’s fourth-quarter revenue of $1.32 billion exceeded Wall Street estimates, the company reported a worse-than-expected net loss per share of $1.36. In response to economic and geopolitical uncertainties, including historically high-interest rates impacting demand, Rivian CEO RJ Scaringe announced a 10% reduction in the workforce during Wednesday’s earnings call.
Lucid reported lower-than-expected revenue of $157.2 million for the quarter. Lucid CEO Peter Rawlinson attributed the impact to the macroeconomic environment and higher interest rates. The company, expanding its operations to new locations such as Saudi Arabia, acknowledged adapting to different market dynamics.
EV Market Challenges and Slow Sales Growth
Despite significant investments in electric vehicles (EVs), industry-wide sales have grown slower than anticipated. As of December, EVs constituted 6.9% of total sales, totaling approximately 976,560 units, reflecting a 1.7 percentage point increase from 2022. Rivian and Lucid, while making strides, still account for a fraction of the EV market compared to industry leader Tesla.
According to a Cox Automotive analysis, Rivian represented just over 4% of EV sales in 2023, while Lucid comprised 0.5%. Tesla continued to dominate the market with a commanding 55% share.
Stock Performance and IPO Impact
Rivian’s shares have undergone a significant decline, dropping around 40% in the past year and plummeting 85% from their initial public offering price of $78 a share in November 2021. Similarly, Lucid’s stock witnessed a decline of approximately 70% in the past year and has fallen over 75% from its IPO price of $14 a share in October 2021.
Rivian and Lucid were not the sole focus of Wall Street on Thursday, as electric truck maker Nikola also reported worse-than-expected revenue and a slightly better-than-expected loss per share in its earnings, resulting in a relatively flat stock performance.
The challenges faced by these electric vehicle manufacturers highlight the complexities and uncertainties within the evolving EV market, influenced by production hurdles, economic factors, and growing competition.
