Insights

Why Rivian, Lucid, and Nikola Stocks Bounced Around Today

What happened
Electric vehicle stocks have been getting hit hard during the recent market swoon. Rivian Automotive (NASDAQ: RIVN), Lucid Group (NASDAQ: LCID), and electric heavy-duty truck maker Nikola (NASDAQ: NKLA) all bounced early today. In morning trading Tuesday, these stocks jumped between about 6% and 7%. But as the market gave back its gains on the day, so did these stocks. At 11:35 a.m. ET, Rivian shares were down 4.2%, while Lucid and Nikola were 2.8% and 5.9% lower, respectively.
So what
Today’s initial rebound came after several days of meaningful drops in these stocks. Over the last several trading days, Lucid stock had dropped 11.5%, while Rivian and Nikola shares were down 24%.
Image source: Rivian Automotive.

The overall negativity comes from struggles related to supply chain constraints and rising material costs, along with growing competition. Even though these names couldn’t overcome the negative market sentiment today, the early bounce indicates there are some investors still focusing on their long-term potential. 
Now what
Rivian shares took a big hit yesterday after its IPO share lockup period expired. Much of the selling came as investors saw Ford unloading 8 million of its shares in Rivian. But Ford still holds 94 million shares, or about a 10% stake in the EV maker. 
Investors can now focus on what Rivian says when it announces its first-quarter results after the market close tomorrow. Two key areas need to be watched. Last quarter, the company said it expected to produce only 25,000 vehicles in 2022 even though it has the equipment and processes in place for 50,000. That shortfall is due to supply chain disruptions. Investors will want to know if there has been a change in the supply chain situation either for better or for worse. The impact of rising raw material costs will also be in focus. 
Lucid reported its first-quarter results recently and kept its previously reduced production forecast the same. Nikola also reiterated its plans for full-year production of its battery electric heavy trucks. 
As these companies continue to ramp up their businesses to full-scale production, their stocks will likely remain volatile. With the general market in a correction or even a bear market in some sectors, investors should expect added volatility that can push these companies’ share prices around as it has today.
Howard Smith has positions in Lucid Group, Inc. and Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Electric vehicle stocks have been getting hit hard during the recent market swoon. Rivian Automotive (NASDAQ: RIVN), Lucid Group (NASDAQ: LCID), and electric heavy-duty truck maker Nikola (NASDAQ: NKLA) all bounced early today. In morning trading Tuesday, these stocks jumped between about 6% and 7%. But as the market gave back its gains on the day, so did these stocks. At 11:35 a.m. ET, Rivian shares were down 4.2%, while Lucid and Nikola were 2.8% and 5.9% lower, respectively.

So what

Today’s initial rebound came after several days of meaningful drops in these stocks. Over the last several trading days, Lucid stock had dropped 11.5%, while Rivian and Nikola shares were down 24%.

Image source: Rivian Automotive.

The overall negativity comes from struggles related to supply chain constraints and rising material costs, along with growing competition. Even though these names couldn’t overcome the negative market sentiment today, the early bounce indicates there are some investors still focusing on their long-term potential. 

Now what

Rivian shares took a big hit yesterday after its IPO share lockup period expired. Much of the selling came as investors saw Ford unloading 8 million of its shares in Rivian. But Ford still holds 94 million shares, or about a 10% stake in the EV maker. 

Investors can now focus on what Rivian says when it announces its first-quarter results after the market close tomorrow. Two key areas need to be watched. Last quarter, the company said it expected to produce only 25,000 vehicles in 2022 even though it has the equipment and processes in place for 50,000. That shortfall is due to supply chain disruptions. Investors will want to know if there has been a change in the supply chain situation either for better or for worse. The impact of rising raw material costs will also be in focus. 

Lucid reported its first-quarter results recently and kept its previously reduced production forecast the same. Nikola also reiterated its plans for full-year production of its battery electric heavy trucks. 

As these companies continue to ramp up their businesses to full-scale production, their stocks will likely remain volatile. With the general market in a correction or even a bear market in some sectors, investors should expect added volatility that can push these companies’ share prices around as it has today.

Howard Smith has positions in Lucid Group, Inc. and Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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