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To say that it has not been a good week for the markets would be an understatement. In the last 5 days, the Dow is down 5.97%, the Nasdaq 100 is down 10.32%, and the S&P 500 is down 7.85%. The news is grim no matter which index you look at, but tech—especially crypto (RIP)—has been hit particularly hard.
I’m not going to spend too much space here asking why, (COVID-19, War in Ukraine, inflation and looming interest rate hikes are all good guesses), but I do want to take a look at Southern California electric vehicles stocks and compare them to the rest of the market.
Spoiler alert: It’s ugly.
Let’s start with Rivian, which I wrote about earlier this week when Ford announced its intent to dump eight million shares of the Irvine-based EV company. Since that news broke Rivian has only continued to slide and is down another 13% today. Shares have lost 40% over the past five days.
That’s a lot of value by any measurement, but even mighty Tesla—a company that is on pace to make 1.5 million cars this year—has spent the last five days in a 21% freefall (Elon buying Twitter is also a factor here). Lucid, the other big Bay Area EV company, is down 29.41% since last Thursday. Whether or not Rivian’s stock price is completely divorced from its underlying business fundamentals is hard to gauge. Their earnings call this afternoon indicated that management still thinks they can hit their (already scaled back) production targets. And the news about their factory in Georgia remains optimistic. Whether that has any impact on their stock price in this market in the short term is anyone’s guess.
Los Angeles-based Faraday Future is also taking an absolute bath. Share price is down 90% from its all-time high in January 2021, losing 58.51% over the past month. The company, which is embattled to say the least, has yet to begin selling a production vehicle. While reports from earlier this year suggested the worst of the upheaval may be behind the EV hopeful, it appears investors are not convinced. With a carousel of seemingly never-ending leadership shakeups, it’s not hard to understand why. But if the company can deliver on its promises and begin selling vehicles as early as this fall, maybe the current price of $1.78/share will look like a steal.
It’s not just electric vehicle manufacturers taking a beatdown. EVgo, the electric vehicle charging company, released a disappointing Q1 earnings report yesterday, in which the company missed earnings targets due to lower-than-expected sales numbers. Their stock has fallen 62.58% over the past 6 months, including a 6.32% drop today on the heels of the earnings report. However, the earnings report also affirms that the company is still anticipating $48-$55 million in sales for 2022. For comparison, they did $7.7 million in 2021.
Had enough doom and gloom yet? Ok one more. Romeo Power. Down 80% over the past 6 months, 25.28% in the last 5 days. However, the electric delivery vehicle company released Q1 earnings on Monday, which seemed largely positive. The company made $11.6 million in revenue (up $10 million compared to Q1 2020), meeting expectations. The revenue expansion came almost entirely from sales, and is projecting $40-50 million in revenue for 2022.
What’s the takeaway here? Market is down bad. Tech is down real bad. SoCal EV sector is down worst of all, despite some encouraging Q1 earnings reports and a global market for EVs that doubled in 2021. If you can weather storm, there may be better days coming, but predicting where the bottom lies is beyond my pay grade .—David Shultz
