EV Maker Lucid Falls On Declining Orders, Rivian Up On Guidance

Key Points

• Shares of EV maker Lucid gapped down Wednesday, despite higher revenue and a narrower loss. 
• The company grew year-over-year sales, but Wall Street was looking for more. 
• Electric truck maker Rivian was up after hours Wednesday on an optimistic production outlook. 

 

Revenue is growing and losses are narrowing, but that wasn’t enough to stop shares of luxury electric vehicle maker Lucid Group NASDAQ: LCID from gapping down Wednesday.

The company reported third-quarter results late Tuesday, with shares plummeting more than 18% on news of declining reservations, or advance orders, for the Lucid Air electric sedan. 

Lucid was already trending lower ahead of the release. The stock is down 27.88% in the past three months and 64.52% year-to-date. 

The company specializes in luxury EVs. It is vertically integrated, meaning it engineers, designs, and manufactures vehicles, battery systems, and powertrains. 

It went public in 2021 via a SPAC merger, although the company was founded in 2007 to produce battery technologies. 

California-based Lucid said it received reservations for around sedans in the quarter, down from 37,000 previously. The company said it was on track to deliver between 6,000 and 7,000 for the full year.

Lucid reported a loss of $0.32 per share, greater than the consensus estimate of $0.31 per share. That was still an improvement over a loss of $0.43 per share in the year-ago quarter, but Wall Street was looking for more.
 

Missing Analyst Views 

Revenue came in at $195.5 million, a huge year-over-year improvement, but also falling short of analyst expectations. 

Those misses, combined with a slower rate of advance orders, resulted in Wednesday’s selloff. 

Other highlights from the report include:

• Record quarterly production of 2,282 vehicles, more than triple the number in the previous quarter
• Third-quarter revenue driven by customer deliveries of 1,398 vehicles in the quarter
• More than 34,000 reservations, representing potential sales of over $3.2 billion 
• Announced plans to open Project Gravity SUV reservations in early 2023

Capital expenditure was $290,064 in the quarter, more than triple the year-ago quarter’s $92,780. Investors can see the results in the company’s greater production recently. 

For the full year, analysts expect Lucid to post a loss of $1.05 per share, narrowed from 2021’s loss of $3.48 per share. 

The stock’s chart shows a decline that began in November of last year, punctuated by failed rally attempts in July and August, and again in October. In fact, Lucid notched a gain of 2.29% in October, but the stock quickly rolled over. 

It’s not the only EV startup suffering. Rivian Automotive NASDAQ: RIVN, which reported earnings after the bell on Wednesday, is down 16.38% in the past three months and 69.28% year-to-date. 

Wall Street had expected the maker of electric trucks to post a loss of $1.82 per share on revenue of $550 million. The company reported per-share earnings of $1.57 on revenue of $536. 

Supply Chain Still An Issue 

The company cited supply-chain constraints as a factor that limited production in the quarter. 

In the earnings release, the company said, “Based on our latest understanding of the supply chain environment, we are reaffirming our 2022 production guidance of 25,000 total units produced. We are also reaffirming the annual guidance provided during our second-quarter earnings call of $(5,450) million in Adjusted EBITDA.” 

Rivian said it was slashing its capital expenditure guidance to $1.75 billion, shifting some of that to next year. 

The company expects its R2 platform, with production based in Georgia, to launch in 2026. 

Rivian is also a newly public company, having made its debut exactly one year ago, just as broader markets were weakening and pulling into a downtrend. That was unfortunate timing, to be sure. The stock has had small tradeable rallies when it was possible to pocket some fast profits, but for investors, it hasn’t offered much of an opportunity yet.

Shares were up in after-hours trading Wednesday.