What is Going on at Rivian?
Before the company went public back in November, the market had high hopes for the electric truck maker. Fast forward five months later and the stock has fallen by nearly 60% from its IPO price, and recently dipped to an all-time low price below $40 per share. For the company that has major investors like Amazon (NASDAQ:AMZN) and Ford (NYSE:F), as well as plenty of institutional buy-in, why does the stock continue to fall?
Sure, I get it, this current market environment is punishing growth stocks, particularly those that are not profitable. But with oil prices as high as they have been in decades, it seems like a great opportunity for electric vehicle makers to gain some customers. But for RIvian (NASDAQ:RIVN), it seems like they are simply making one mistake after another, as they stumble their way towards their second earnings report as a public company.
Most recently, Rivian turned heads when it attempted to raise prices for its vehicles. Not only is this not a great public relations move for a new company, but it even lost some customers when it tried to raise the prices for pre-ordered vehicles as well. Social media was littered with pictures of people cancelling their vehicle reservations.
For a stock that was once a darling with Wall Street analysts, it is receiving some brutal price target cuts ahead of its earnings call. Most notably, Barclays reduced the price target of the stock from $115 to $47 per share. Does this mean Rivian is finished? No, it just means the stock clearly got ahead of itself. It also likely means that the markets are creating their own hierarchy within the electric vehicle sector, and until it can prove otherwise, Rivian is nowhere near the top tier.
Nio Continues to Fall in 2022
Despite all of the good news that comes out of Nio’s (NYSE:NIO) camp, shares continued to decline this year. The stock is now down by over 46% this year, and are trading below $20 per share for the first time since September of 2020. I recently wrote about how the ongoing crisis in Ukraine has put China and its businesses in an awkward position, and I believe that is a large reason as to why Nio continues to get punished.
The major news out of Nio this week is that the long-awaited ET7, the first sedan from the company, is ready for test driving in China. Nio also provided a date of March 28th for the first ET7 deliveries to customers. The sedan has some impressive specs, with the highest end model boasting a range of 1,000 kilometers or 621 miles per charge. This would top the current record for EV battery range of the Lucid Air sedan by over 100 miles.
The ET7 will also top Tesla’s Model S range and is priced significantly cheaper. It is just one of three new models Nio is debuting this year, as the EV maker continues to build up its lineup in anticipation of a global expansion. Of course, that global expansion is currently on hold due to the war in Ukraine. I will continue to pound the table on Nio at its current price levels, in what still appears like it will be a breakout year for the company.
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