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After weak EV earnings reports, Rivian and Lucid shares plunge.

Investors witnessed a sharp decline in the shares of electric vehicle giants Rivian and Lucid on Thursday following lackluster fourth-quarter earnings reports and stagnant production figures. Rivian saw its stock plunge by roughly 25%, while Lucid experienced a nearly 17% drop during the trading day.

In their earnings releases after Wednesday’s market close, Rivian projected a production of 57,000 vehicles for 2024, slightly below the 57,232 vehicles manufactured in the previous year. Similarly, Lucid anticipated producing 9,000 vehicles in 2024, reflecting a modest 7% increase from the 8,428 vehicles produced in 2023.

Despite Rivian’s quarterly revenue of $1.32 billion surpassing Wall Street expectations, the company reported a net loss per share of $1.36, worse than analysts’ predictions. Additionally, Rivian announced plans to reduce its workforce by 10%.

RJ Scaringe, CEO of Rivian, attributed the company’s challenges to economic and geopolitical uncertainties, particularly citing the impact of historically high interest rates on consumer demand.

On the other hand, Lucid reported lower-than-expected quarterly revenue of $157.2 million, with a net loss per share of 30 cents in line with estimates. CEO Peter Rawlinson noted that macroeconomic conditions and higher interest rates had also affected Lucid’s performance, emphasizing the need to adapt to different market dynamics in new locations like Saudi Arabia.

Despite significant investments in electric vehicles by various companies, EV sales have not grown as rapidly as anticipated. Rivian and Lucid, while prominent players in the industry, still represent only a fraction of EV sales compared to market leader Tesla, which commands over half of the market share.

Rivian’s stock has declined by approximately 40% over the past year and has fallen 85% from its IPO price in November 2021, while Lucid’s shares have dropped about 70% in the past year and more than 75% from its IPO price in October 2021.

In addition to Rivian and Lucid, investors also closely monitored electric truck maker Nikola, which reported worse-than-expected revenue in its earnings release on Thursday. Despite this, Nikola’s stock traded relatively flat, reflecting a significant decline from its peak value in June 2020.

Overall, the challenges faced by Rivian, Lucid, and other EV producers highlight the complexities of navigating the rapidly evolving electric vehicle market amidst economic uncertainties and shifting consumer preferences.

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