Shares of electric vehicle startups Rivian and Lucid extended their declines that began last year after they announced 2024 guidance. Rivian, a maker of electric pickups, crossovers and cargo vans whose major shareholder is Amazon.com Inc., said its production will remain at last year's levels. In addition, the company intends to reduce staff again.
In turn, Lucid, which is majority owned by the Saudi Arabian National Wealth Fund (PIF), forecasts only a slight increase in production compared to 2023.
Both forecasts turned out to be lower than analysts' expectations, which caused a corresponding reaction among the company's investors. However, investor pessimism began to grow since October last year after Tesla Inc warned of a decrease in interest in electric vehicles. And while its shares have fallen about 20% since then, the impact on smaller rivals like Rivian and Lucid has been catastrophic, Bloomberg noted.
Rivian shares fell about 44% after Tesla's October forecast and closed last Friday at a record low. Lucid's stock fell about 33% over the same period, barely above its low. And if not for the strong support from large investors (according to Bloomberg, Amazon owns 17% of Rivian shares, and the Saudi Arabian Sovereign Wealth Fund owns about 60% of Lucid's assets), the fall in shares would have been more significant.
Amazon said in an emailed statement that Rivian's current results would not impact its “existing investments, collaborations (with the startup), size or timing of orders.” Rivian has a contract with Amazon to supply it with 100 thousand electric vans by 2030.
Rivian and Lucid are now worth an order of magnitude less than they were when they debuted on the public market in 2021. Rivian's market value is about $9.6 billion and Lucid's is about $6.9 billion, up from $153 billion and $91 billion in 2021, respectively.
Wall Street analysts also cut their forecasts for these companies. Just this week, their average 12-month price targets for Rivian and Lucid shares fell nearly 20%. At the same time, the prospects for the electric vehicle market continue to deteriorate. Global electric vehicle sales are expected to grow 20% this year to about 16.7 million units, according to the latest BloombergNEF analysis. By comparison, electric vehicle sales grew 33% last year.
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