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Rivian stocks are slipping while older carmakers are raising EV targets




January 6 (Reuters) – Rivian Automotive Incs (RIVN.O) shares fell briefly during the IPO on Thursday in a sale with other electric car manufacturers as the battle for market share intensifies and older companies increase their own production.

Rivian fell as low as $ 75.1[ads1]3, during the first IPO in November of $ 78 for the first time. The stock reduced losses and ended down around 3% to $ 87.33.

The competing electric car manufacturers Tesla Inc (TSLA.O), Lordstown Motor (RIDE.O) and Fisker (FSR.N) fell between 2.1% and 3.3%, with high-flying growth stocks under pressure from expectations that the US Federal Reserve could increase interest faster than previously thought.

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“Rivian investors need to keep nearby expectations under control,” Morgan Stanley analyst Adam Jonas warned in a note to clients. “Tesla has shown us the extremely difficult way to increase the production of electric cars. You can not get the reward without the pain.”

Jonas considers Rivian’s stock to be “overweight”.

Rivian’s shares have fallen around 14% since the beginning of Wednesday, when Amazon.com Inc, one of Rivian’s largest investors, said it had merged with carmaker Stellantis NV (STLA.MI).

The two companies will develop cars and trucks with Amazon software and distribute electric vans made by Stellantis on Amazon’s delivery network. read more

US stocks in Stellantis rose 2.5% on Thursday and are now up 11% in 2022.

Rivian signed a contract in 2019 to build 100,000 electric vans for Amazon by 2025. But now the business for electric commercial vehicles, an important market for Rivian, is becoming more crowded.

Rivian said on Thursday that they expect Amazon to buy vehicles from many suppliers and that the partnership with Amazon is intact.

General Motors Cos (GM.N)’s electric commercial vehicle company, BrightDrop, has signed agreements with Walmart Inc (WMT.N) and FedEx Corp (FDX.N), while Ford Motor (FN) is expected to deliver its E-Transit cargo van to customers this year.

Meanwhile, General Motors Co. (GM.N) unveiled its electric Chevrolet Silverado pickup this week, while Ford said it is increasing production of the F-150 Lightning. Both pickups would compete with the Rivian’s R1T at a time when it is struggling to stick to delivery dates due to chip supply limitations.

Ford’s share has risen 18% so far this year and is now at its highest level since 2001. GM has risen 7% in 2022.

“(Rivian) investors are likely to be a little intimidated by the old industry making a comeback,” said Guidehouse Insights analyst Sam Abuelsamid.

Ford, GM passes Rivian in market value

Rivian, which lost $ 1.2 billion in the third quarter, is expected to deliver cars to customers this year. Production at the second plant in Georgia, where it has invested $ 5 billion, is likely to begin only by 2024.

“It’s still in a way untested in terms of the investability of it as a stock versus some of the other names like Tesla, and no doubt Ford,” said David Keller, marketing strategist at StockCharts.com.

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Reporting by Nivedita Balu and Akash Sriram in Bengaluru Further reporting by Eva Mathews and Tiyashi Datta, and by Noel Randewich in Oakland, California. Edited by Nick Zieminski and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.



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