Benzinga - by Shanthi Rexaline, Benzinga Editor.
As electric vehicle market leader Tesla, Inc. (NASDAQ:TSLA) pushes well ahead of the competition, the upstarts are left to fight it out for the distant second slot. Benzinga took a look at two of the U.S. EV startups namely, Rivian Automotive, Inc. (NASDAQ:RIVN) and Newark, California-based Lucid Group, Inc. (NASDAQ:LCID), that have shaken off the early commercialization jitters but are still grappling with production ramp-up.
Is there light at the end of the tunnel, or is the economic uncertainty adding to the gloominess? Here's what the numbers tell.
RIVN Vs. LCID: How Stocks Fared Over Past Year
Irvine, California-based Rivianis a manufacturer of electric SUVs, delivery vans, and pickup trucks, while Lucid has positioned itself as a manufacturer of luxury EVs.
A comparison of stock price performance since Sept. 2022 shows that Rivian and Lucid continued to head southward through the end of 2022. Although a short-lived recovery followed from their early-January highs, both resumed the downtrend in late June.
A rebound attempt helped both stocks recoup some of their losses. By mid-July, the two began to diverge. While Rivian managed to hit a near-term high around late July and has been seeing a consolidation move since then. Lucid has been tracing another downward move.
Figure: Comparison of market price trajectory of RIVN and LCID over a period of one year.
Credit: Neer Varshney /Benzinga
RIVN Vs. LCID: How Much $100 Investment A Year Ago Is Worth
As an extension of the stock price performance, the returns are also in the red for the past year, but Rivian yielded a less negative return than Lucid. A $100 invested in Rivian a year ago is currently worth $71.43, a negative return of about 29%. If an investor had bet a similar sum on Lucid, he would now be staring at a loss of over 61% as his capital would have dwindled to $38.97.
Figure: Comparison of scaled returns delivered by RIVN and LCID over a period of one year.
Credit: Neer Varshney /Benzinga
The negative performance of the two stocks reflects their floundering fundamentals. As the U.S. Federal Reserve and the rest of the global central banks began to tighten interest rates in early 2022 amid a spurt in inflation, consumers turned defensive. The first cuts fall on discretionary items such as cars, and this time was no exception. This began to manifest as declining toplines for these companies.
The EVs of both companies do not fall in the affordable category. Rivian currently markets the R1T EV pickup truck, which has a starting price of $73,000 in the U.S. Its R1S electric SUV starts at $78,000. Amazon has been the captive customer for Rivian's electric delivery vans.
Rivian's R.J. Scaringe said in a Code Conference interview that the company could launch affordable EVs down the line and would also work toward lowering EV costs over time.
Lucid, meanwhile, sells three models of Air EV sedans and the cheapest is Lucid Air Pure, which has a starting price of $82,400. The company's Air Sapphire super sports sedan, which is yet to be marketed, costs a whopping $249,000.
Come 2023, sentiment toward stocks began improving but the EV industry was left to contend with another risk. Tesla began aggressively cutting prices forcing the rest of the pack to follow suit. Those who opted not to react found their bottom line sink deeper into the red.
Do RIVN And LCID Price Actions Correlate?
Figure: Linear regression analysis of RIVN and LCID to see if there is a correlation in how the stocks move.
Credit: Neer Varshney /Benzinga
Linear regression analysis, which gives the correlation between two variables — in this case, the stock performances of Rivan and Lucid, throws up a coefficient of determination of 0.792. The number suggests a fairly tight correlation between the stocks.
What Do Analysts Think of RIVN and LCID?
Figure: Comparison of analyst consensus between RIVN and LCID.
Credit: Neer Varshney /Benzinga
Despite the abysmal performances seen over the past year, analysts are hopeful of these two stocks rebounding. The oversold levels of Rivian and Lucid provide a perfect platform for a spring upward, although much depends on these companies managing to keep EVs churning out of their production line and find buyers for the vehicles.
It is to be noted that Lucid in May lowered its production guidance from 10,000-14,000 units to over 10,000 units.
Rivian is down 31.70% over the past year compared to a roughly 62% decline by Lucid. In terms of upside potential, Lucid edges out Rivian.
Rivian ended Thursday’s session rose 0.13% to $23.08 and Lucid outperformed with a 1.28% gain before closing at $5.53, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Read Next: How Rivian Became Analysts’ Darling: All Upsides Of Tesla, Minus The Risks?
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