When Tesla (TSLA) slashed the prices of its electric vehicles so that consumers would qualify for a U.S. tax credit, it hastened costs for competitors. EV firms that booked their supply at higher prices, expecting to fulfill strong demand, are in trouble.
Polestar (PSNY), acquired by Volvo Cars in 2015, guided a 2022 target of 50,000 vehicles. In 2023, it expects to deliver 80,000. The company has a strong cash position to cover costs. Shares are half the post-SPAC price of $10 because investors prefer to trade Tesla stock instead.
Rivian (RIVN), a truck EV maker, is optimistic it could produce 62,000 vehicles. However, in the fourth quarter, the firm lost $1.73 a share (non-GAAP). It delivered only 8,054 vehicles in Q4/2022. RIVN stock is a good speculative trade because of its cash position of $12.099 billion. Bankruptcy risks are remote at this time.
Rivian has a baseline target of 50,000 vehicles produced this year. The 62,000 targets gave RIVN stock trades a boost.
In China, Nio’s weak Q4/2022 loss of 44 cents a share is a major setback. Revenue grew by 62.2% Y/Y to $2.33 billion yet the firm still lost money. A vehicle margin of 6.8% dropped from 20.9% last year.
Bottom Line
Trade Rivian stock for its volatility. Consider Polestar for its long-term potential.
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