Electric vehicle stocks closed the week that ended on Oct. 6 on a down note, although market leader Tesla, Inc. (NASDAQ:TSLA) managed to post a weekly advance despite reporting underwhelming third-quarter deliveries. The sector-wide weakness came amid the broader market volatility and some company-specific news.
Tesla reported Monday third-quarter deliveries of 430,488 vehicles in the third quarter, down from 479,700 units it sold in the second quarter. The number also trailed the company-compiled consensus of 455,000 units. The Elon Musk-led company, however, affirmed its full-year deliveries goal of 1.8 million units.
The company blamed the shortfall on planned downtimes for factory upgrades. With volumes remaining insensitive to price cuts and several key catalysts lined up for the final leg of the year, analysts were bracing for no further price cuts from the company. Tesla belied expectations and announced price cuts for its Model Y and Model 3 EVs in the U.S., with the percentage of reductions ranging from 2.65% to 4.23%. Following the move, Future Fund’s Gary Black said Wall Street analysts would likely lower their 2024 earnings per share estimate for Tesla by $0.30 to $0.50.
Investors did not take kindly to Rivian Automotive, Inc.’s (NASDAQ:RIVN) announcement concerning a green, senior convertible note offering with an eye to raise $1.5 billion. The announcement came close on the heels of the EV maker reporting above-consensus third-quarter deliveries and production and affirming its full-year production guidance.
The stock fell about 23% in reaction to the proposed debt offering. Future Fund’s Black said the sell-off may have been overdone. Given that Rivian’s equity capital is $17.3 billion, even if 100% of the new debt issue is converted and assuming a conversion price at 30% above the current stock price, maximum dilution would be only about 7%, he said.
Rivian also announced third-quarter revenue in line with the consensus estimate and said its cash runway is adequate enough to fund operations through 2025.
Premium EV manufacturer Lucid Group, Inc. (NASDAQ:LCID) this week launched a cheaper version of the Air sedan as it struggles to push sales. The company said it would offer a single-motor, rear-wheel-drive version of its Air Pure sedan, with a starting price of $77,400, about $5,000 less than its previous cheapest, dual-motor, all-wheel-drive Air Pure EV.
Legacy automakers Ford Motor Co. (NYSE:F) and General Motors Corp. (NYSE:GM) reported their monthly sales results this week. Dearborn edged out its crosstown rival in terms of EV sales, with the former selling 20,962 EVs in the third quarter compared to the latter’s tally of 20,092 EVs.
So far this year, Ford has sold 46,671 EVs, a 13.2 year-over-year increase.
Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE) said YT Jia, its co-founder, will take delivery of an FF 91 2.0 Futurist Alliance this weekend at an event at its headquarters in Los Angeles. He will be involved in a three-phase co-creation process to enhance and improve both the user experience as well as the next generation of FF products, the company said.
Faraday Future has scheduled weekly “FF Delivery Co-Creation Days” with developer co-creation officers throughout October.
The KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) ended the week up 0.92% at $26.41, according to Zenger News Pro data.
Produced in association with Benzinga
