For the fourth consecutive day since its first public offering, share prices of electric car startup and supposed Tesla-killer Rivian Automotive inched higher.
By early morning, Rivian share prices had already increased another 6.3% even though there has been no recent news to explain the excitement.
As it turns out, however, one of Rivian’s rivals in the electric vehicle industry, Lucid Motors, just revealed its third-quarter 2021 revenue last night and it appears investors are pretty thrilled about that one.
Although Lucid reported decreased sales and larger losses than anticipated, investors reacted positively to the electric vehicle maker’s report that its Lucid Air car just won Motor Trend’s vehicle of the year award. In addition to that, they were also pretty happy to learn that Lucid reserved 13,000 reservations for new vehicle sales in Q3 and increased that number over 17,000 during a period of six weeks since Q3 ended.
And Lucid was able to report that it has started producing cars to fulfill all of those orders at its Advanced Manufacturing facility in Casa Grande, AZ, where a “second stage of construction” has already started to add 2.85 million square feet of production space.
Every aspect of this speaks to the overwhelming pace at which electric vehicle adoption seems to be taking place, an important fact that bodes well for both Rivian and Lucid. With that being said, I still believe investors need to be mindful about these businesses, which now carry market capitalizations over $76 billion for Lucid and nearly double that for Rivian. That seems like an awful lot of money to spend on a dream, no matter how quickly it is materializing. And more so when you take into consideration that until these businesses start booking some sales, and announcing some profits, you cannot possibly know what type of profit margin they’ll be earning on their vehicles.
Until that takes place, you might know the share price of Rivian and the share price of Lucid — but you will not know the value of either one.
Author: Scott Dowdy