Rivian Automotive (RIVN -1.49%) When lucid group (LCID -5.42%) 2021 has seen a wave of bulls amid a buying frenzy for electric vehicle (EV) stocks. But stocks in both companies have plummeted over the past year as rising interest rates and other macro headwinds kept investors away from speculative growth stocks.
As a result, both Rivian and Lucid are trading about 80% below their all-time highs.Should I buy any of these unsupported EV stock?
Difference between Rivian and Lucid
Produced by Rivian 3 cars: R1T pickup truck, R1S SUV, EDV (electric delivery van) Amazon (AMZN -2.28%)The company’s R1 cars can be purchased for less than $70,000, can travel over 300 miles on a single charge, and have about 150 miles of EDV range.
Rivian has churned out 15,000 vehicles since it began production last September. Originally set to produce 50,000 cars this year, he halved that target to 25,000 in March as supply chains struggled with constraints. The company reaffirmed its full-year targets in its third-quarter report. There is still a lot of latent demand for the company’s vehicles. In addition to Amazon’s first order of 100,000 for his EDV, Rivian has received pre-orders for his 114,000 of his R1 Series pickups and his SUV so far.
Image Source: Rivian.
Lucid’s luxury sedan is called the Lucid Air and comes in Pure, Touring, Grand Touring and Dream editions. Starting at around $90,000, the Pure Edition has just over 400 miles of range. Starting at around $150,000, the top Dream edition can reach 520 miles on a single charge.
Lucid has delivered 2,562 vehicles since it began production last September. Originally he planned to ship 20,000 vehicles in 2022, but in February this year he lowered that target to 12,000-14,000. It then halved that estimate to 6,000-7,000 units in August as it struggled with supply chain issues. In its recent third-quarter earnings report, Lucid reaffirmed its full-year guidance and said it plans to fulfill more than 34,000 bookings.
What are the fastest growing companies?
Rivian’s near-term goal is to expand production of R1 vehicles and EDVs. The company currently has an annual capacity of 150,000 units at its main plant in Illinois, and is expected to reach his 200,000-unit capacity when the plant expansion is completed next year. Rivian plans to open a second plant in Georgia by 2024, which could boost annual production capacity to about 600,000 vehicles.
Rivian plans to ramp up production of its second-generation ‘R2’ vehicle in 2025. No clear roadmap has been revealed for these plans yet, but they could expand their reach beyond pickups, SUVs and vans.
Lucid’s AMP-1 manufacturing plant in Arizona can produce up to 34,000 vehicles per year. A second phase expansion of his AMP-1, which began last July, is expected to increase annual production capacity to his 90,000 units by 2023. We also recently signed an agreement with a Saudi investor to open a new factory in the country. This will expand the annual production capacity. 155,000 vehicles.
Lucid plans to launch its next vehicle, the Project Gravity SUV, in 2024. But more importantly, the company believes the Saudi deal will allow him to deliver 500,000 vehicles by 2025.
Which company is financially stable?
Rivian and Lucid are aggressively expanding their businesses and may continue to be unprofitable for the foreseeable future. Here’s what Wall Street expects to happen to both companies over the next two years.
|
Metric (Estimated) |
2022 |
2023 |
2024 |
|---|---|---|---|
|
Rivian Earnings |
$1.75 billion |
$5.77 billion |
$11.56 billion |
|
rivian net income |
($7.02 billion) |
($6.21 billion) |
($4.49 billion) |
|
clear income |
$723 million |
$2.56 billion |
$4.79 billion |
|
clear net profit |
($1.9 billion) |
($2.27 billion) |
($1.69 billion) |
Data Source: S&P Global.
Those estimates should be taken with a grain of salt, but these losses mean automakers with stronger balance sheets are safer investments. ended with $13.3 billion in cash and equivalents, total debt of $3.7 billion, and a low debt-to-equity ratio of 0.2. This manageable leverage should give Rivian more room to raise fresh cash in new loans and secondary offerings.
Lucid ended the third quarter with $1.3 billion in cash and equivalents and $2.1 billion in short-term investments. But total debt is his $3.7 billion and a much higher debt-to-equity ratio of 1.1.
Winner: Rivian
Rivian’s enterprise value of $20.4 billion is less than double the company’s 2024 revenue potential. Lucid’s enterprise value of $21.6 billion is valued at 4.5x its projected 2024 revenue.
In addition to its lower valuation, Rivian already produces more vehicles than Lucid, has a healthier balance sheet, and is focused on a more practical market for mid-range pickup and delivery vans. I’m here. It is also backed by Amazon, fordRivian is still a speculative EV stock, but I believe it is a much more promising investment than Lucid.
