The market is bouncing back today from a rough last week. Tech stocks are leading the way, with the Nasdaq jumping 3% this morning. But EV start-up stocks are doing even better. Rivian Automotive (NASDAQ: RIVN) is soaring 15.2% as of 11:16 a.m. ET. Lucid Group (NASDAQ: LCID) shares are also higher, jumping 12.3% at that time. Lesser-known Arrival (NASDAQ: ARVL) also popped 21.1% with some additional news of its own.
It’s not just the general market rebound that’s lifting EV names today. One legacy automaker that is diving full force into EV production announced some news Friday that is lifting the newer players. General Motors announced a price increase for its Hummer EV, one of its first big launches in the sector.
That’s especially good news for Rivian after it bumbled its first announced price increase back in March. After the start-up said it was raising prices to offset inflating raw material costs, customers who had already made reservations blew a gasket. The company quickly walked back that increase for existing orders, but it gave Rivian a black eye and raised a red flag concerning management’s credibility.
GM said Friday it was hiking Hummer EV prices by over $6,000 to help cover increasing commodity and shipping costs, as reported by Reuters. Perhaps learning from Rivian’s mistake, GM is honoring previous pricing for the more than 77,500 reservations that were already in place. The price hike on the high-end pickups priced from about $80,000 to $110,000 is a much smaller percentage than the 20% bump Rivian initiated for its new orders. But it seemingly gives the start-ups more backing to help cover their rising costs.
While Arrival shares are likely benefiting from that momentum, the stock is also jumping from some big company-specific news today. Arrival announced that its commercial delivery van has achieved EU certification and received European Whole Vehicle Type Approval. In other words, the vehicle is now officially allowed on EU roads and highways. Arrival says it has more than 140,000 non-binding orders or letters of intent for its electric delivery vans.
Arrival is attempting to use a unique, smaller “microfactory” manufacturing approach, with production facilities built specifically for local customers. One of those plants in Bicester, U.K. will make the Arrival vans beginning in the third quarter. Today’s approval news means it now can confidently begin production.
Arrival didn’t discuss pricing, but it likely will need to cover increasing costs along with other automotive manufacturers, or face margin pressures. Lucid, maker of expensive, luxury electric sedans, announced last month that it will be adjusting previously announced prices as a result of “rising raw material costs and global supply chain factors.” Investors in the young sector are happy to see many manufacturers are in agreement in trying to cover those costs.