Rivian, Lucid tumble as slowing EV demand upsets ramp-up plans
(Reuters) — Rivian (NASDAQ:RIVN) Automotive and Lucid Group (NASDAQ:LCID) tumbled in premarket trading on Thursday after their earnings reports pointed to the impact of slowing electric-vehicle demand on their costly ramp-up plans.
Rivian fell 15% after it forecast flat growth in annual production, also hurt by a shutdown of its assembly line for upgrades. Lucid sank 8% as its production forecast also came below estimates.
The companies said an uncertain economic outlook and high-interest rates were hitting demand for EVs, echoing remarks from market leader Tesla (NASDAQ:TSLA) and legacy automakers like Ford (NYSE:F).
«Despite having built a highly rated and desirable EV, Rivian appears to have hit a near-term air-pocket and caught the recent EV bug,» said Canaccord Genuity analyst George Gianarikas, who cut his price target on the stock by $10 to $20.
EV startups have been burning billions of dollars in cash in their efforts to develop, source and ramp up manufacturing of vehicles, hoping to be the next Tesla.
Rivian was set to lose more than $2 billion in market capitalization if the premarket losses hold, while Lucid's valuation was set to fall by nearly $1 billion.
Their stocks have had a weak start to the year, with Rivian down 34% and Lucid down 12%, after a tumultuous 2023 when Tesla's price war roiled the industry.
Rivian said on Wednesday it expected to post its first gross profit in the fourth quarter, after it reported a loss of about $43,000 per vehicle in the October-December period.
In comparison, Ford's Model E electric vehicle division lost an average of more than $47,000 per vehicle in the same period.
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Rivian is betting on the R2 sport utility vehicle set to be unveiled next month to
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