Despite a general rebound in the stock market, electric vehicle (EV) stocks did not share the same optimism last week. This was largely due to continued concerns over fundamental weakness in the industry.
Tesla Under Pressure:
Tesla, the market leader, did close higher for the week, but it wasn’t without its challenges. An analyst at Bernstein, Tony Sacconaghi, issued a bearish note pointing to Tesla’s declining market share in North America. He stated that Tesla’s market share dropped from 77% in the second half of 2020 to 48% in the first half of 2024. Sacconaghi believes Tesla will struggle to regain market share until it launches new, lower-priced vehicles, which he anticipates occurring in 2026 and 2027. He also expressed concerns about Tesla’s valuation, claiming it is out of line with current fundamentals.
While Tesla’s performance in the traditional EV market is being scrutinized, others are focusing on its ancillary businesses. Ben Kallo, an analyst at Baird, highlighted Tesla Energy as a potentially undervalued aspect of Tesla’s broader business, estimating it contributes approximately $41 per share to the company’s overall valuation.
In a separate positive note, Tesla topped the list in JD Power’s customer satisfaction survey for DC fast chargers, scoring 731 points out of 1,000. This score placed them above the segment average of 664 points.
Lucid Defends Its Technology:
Lucid Group, a luxury EV maker, is still in the early stages of production and sales. However, CEO Peter Rawlinson asserts that Lucid’s technology surpasses its competitors. In a LinkedIn post, Rawlinson claimed the new Lucid Air Pure achieves a range of 5 miles per kilowatt-hour and an equivalent of 146 miles per gallon of gasoline. He sees competitors like Porsche Taycan, Mercedes-Benz EQS, and Tesla Model S as lagging behind and believes it would take them years to match the Lucid Air Pure’s current technology.
Rivian Faces Production Halt:
Shares of Rivian Automotive took a hit after Reuters reported the company had temporarily halted production of its electric delivery vans for Amazon due to a parts shortage. A spokesperson for Rivian confirmed the production halt, stating that they expect to make up for the missed production.
Recalls Hit Ford and GM:
Ford Motor Company issued a recall for 37,371 vehicles, including its Mustang Mach-E SUV, due to concerns about potential windshield wiper failure. The National Highway Traffic Safety Administration (NHTSA) announced that Ford dealers will inspect and replace the faulty windshield wiper motors free of charge.
General Motors (GM) also recalled 21,469 Cadillac Lyriq electric SUVs due to an unexpected activation of the anti-lock braking system. GM plans to fix the issue through an over-the-air update.
Canoo Focuses on Cost Cutting:
Lifestyle EV maker Canoo reported its second-quarter results, showing a narrower-than-expected loss. The company’s loss also narrowed compared to the previous quarter and the same period last year due to a 33% reduction in operating expenses. Canoo generated $650,000 in revenue for the quarter, a significant improvement from no revenue the previous year. The company also reported a 49% year-over-year reduction in total quarterly cash outflow, amounting to $39 million. Canoo reiterated its previous cash flow guidance and projected an adjusted EBITA loss of $120 million to $140 million for the second half of 2024.
Key EV Stock Performance:
The KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) closed up 0.44% at $18.30 on Friday, gaining 0.77% for the week.
Here’s a breakdown of the weekly performance of key EV stocks:
* Tesla: +8.06%
* Nio: +4.49%
* XPeng: +1.02%
* Li Auto: +3.22%
* Workhorse Group: +2.61%
* Hyzon Motors: -44.89%
* Canoo: -15.73%
* Rivian: -5.31%
* Lucid: +1.25%
* Faraday Future: -43.34%
* Nikola: -3.67%
* VinFast: +1.88%
