"The Trap of Discrepancy"... US New Electric Vehicle Stocks Plummet to One-Quarter

[Asia Economy Reporter Yujin Cho] The promising new electric vehicle (EV) startups in the U.S. are falling like autumn leaves. Lucid and Rivian, which once boasted market capitalizations surpassing the U.S. Big 3 automakers and claimed to be Tesla's strongest rivals, have seen their valuations shrink to a quarter of their value in just one year.

Lucid's stock, listed on the U.S. Nasdaq market, closed at $13.64 on the 3rd (local time). This represents a 75% decrease from its peak of $55.21 on November 15 last year. On the same day, Rivian's stock price was $32.24, plunging 81% from its high of $172.01 in November last year.

The stock prices, which had soared solely on expectations, have sharply declined as the gap between reality and hype became apparent. The supply chain disruptions that emerged last year, combined with production setbacks, have also dimmed earnings prospects.

Rivian has lowered its annual production target to half of the original 50,000 units (25,000 units). Due to ongoing cost pressures from inflation, the company expects its annual operating loss to widen from $4.75 billion to $5.4 billion. Rivian is scheduled to announce its third-quarter earnings after the market closes on the 9th.

The situation is no different for Lucid, which is set to report earnings on the 8th. Due to supply chain disruptions, Lucid posted a net loss per share of 33 cents in the second quarter. The total vehicle production for this year has been drastically cut to 6,000?7,000 units, down to one-third of the initial target of 20,000 units.

Peter Rawlinson, Lucid's CEO, explained, "We have taken swift actions such as reorganizing logistics-related teams to address supply shortages," but investors are rapidly withdrawing amid production shortfalls.

Nikola, the first among the new EV startups to report earnings, announced a third-quarter net loss per share of 28 cents. Revenue was $24.2 million, exceeding Wall Street's estimate of $22.1 million.

As of the third quarter cumulative, Nikola produced 125 electric trucks and delivered 111 to customers. The company had expected to deliver at least 300 electric trucks annually, but due to worsening economic conditions and rising borrowing costs, it warned that this year's overall performance would fall short.

Kim Brady, Nikola's Chief Financial Officer, stated during the conference call after the third-quarter earnings release, "Annual electric truck deliveries are expected to fall short of previous estimates," adding, "The fourth quarter is also expected to underperform relative to expectations."

Additionally, Nikola did not disclose its electric truck delivery forecast for next year, citing uncertainties regarding the timing and costs of factory expansion plans. Following the disappointing delivery results and earnings uncertainty, Nikola's stock price plunged nearly 12% at one point after the earnings announcement.

The stock prices of new EV startups surged last year amid the market paradigm shift toward electric vehicles. Tesla, the leader in electric vehicles, saw its stock price soar up to 11 times last year, surpassing $1 trillion at one point, drawing market attention and fueling expectations for the "next Tesla" among new EV startups.

This content was produced with the assistance of AI translation services.