Rivian and Lucid Stocks Tumble Amid Disappointing Earnings

Despite the steady increase in electric vehicle adoption, not every EV maker is performing well. In a significant downturn, electric vehicle manufacturers Rivian and Lucid saw their share values drop sharply following their fourth-quarter earnings reports, which revealed underwhelming performance and projections.

Rivian's stock plummeted by approximately 25%, while Lucid's fell nearly 17%, reflecting investor concerns over the future growth and profitability of these companies.

Rivian disclosed a modest production forecast for 2024, aiming to manufacture 57,000 vehicles, slightly down from the 57,232 vehicles produced in the previous year. On the other hand, Lucid projected a production of 9,000 vehicles for 2024, marking a 7% increase from the 8,428 vehicles manufactured in 2023.

Despite these projections, financial results were less than promising. Rivian reported a quarterly revenue of $1.32 billion, surpassing Wall Street predictions, but its net loss per share of $1.36 was more severe than anticipated. Additionally, Rivian announced a workforce reduction of 10%. Lucid's quarterly revenue stood at $157.2 million, falling short of expectations, with a net loss per share of 30 cents, aligning with analyst predictions.

What Does This Mean for Me?

Both companies attributed their challenges to the broader economic context, including high interest rates that have dampened demand. Rivian and Lucid'sstruggles come amid a slow growth in electric vehicle sales, which constituted 6.9% of total vehicle sales leading up to December, a modest increase from the previous year.

When compared to Tesla's dominant U.S. market share of about 55%, Rivian and Lucid's shares in the EV market are minimal, further highlighting the competitive pressures they face.