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EV stocks soared in 2021; investors betting revenue to follow in 2022

If 2021 was the year for electric vehicle stocks, 2022 is the year for actual deliveries. At least that’s the wager.

Investor money this year poured into Rivian and Lucid Motors, valuing the EV companies at a combined $150 billion. Neither company has generated meaningful revenue, and they’ve just begun getting keys into the hands of consumers.

Several other U.S. EV makers, including Canoo, Lordstown Motors and Fisker, have hit the public markets in the past year-plus with much lower valuations and promises to start delivering vehicles in 2022 or 2023. And last week, Harley-Davidson said it’s spinning off its nascent electric motorcycle division, Livewire, which will go public through a special purpose acquisition company valued at $1.8 billion.

Rivian electric trucks are seen parked near the Nasdaq MarketSite building in Times Square on November 10, 2021 in New York City.

Michael M. Santiago | Getty Images

It’s all funny money, so far.

The only pure-play U.S. EV company with a real business is Tesla, whose market cap peaked at $1.2 trillion last month before sliding by about 19%. Outside of Tesla’s four models on the market, car buyers wanting to go electric have had a slew of options from large manufacturers. Popular choices include the Chevrolet Bolt, Nissan Leaf, Ford Mustang Mach-E, Mini Cooper SE and Porsche Taycan. Prices range from about $27,000 to more than $150,000.

Drafting off Tesla’s popularity, investors are betting that, starting in 2022, more EV companies will move beyond technology and sleek designs and succeed where so many have previously failed — manufacturing at scale. To get there, they have to contend with supply chain disruptions, labor market challenges, inflationary pressures, increasing competition and the likelihood of higher capital costs.

“The question is going to be who starts production and is able to convert this interest and the investments in the brand into deliveries and happy customers,” said Vitaly Golomb, a tech investment banker who focuses on EVs at Drake Star Partners.That’s really the next phase.”

Electric vehicle start-up Lucid on Sept. 28, 2021 said production of its first cars for customers has started at its factory in in Casa Grande, Arizona.

Lucid

Golomb, who’s based in San Francisco, said he invested in Rivian almost a year ago and preordered the R1T truck a year before that. As of Dec. 15, the company had received 71,000 preorders for its trucks and R1S SUVs. At the time of its IPO last month, Rivian said it would take until the end of 2023 to fill its existing order book.

Rivian sold its first 11 vehicles in the third quarter, for revenue of $1 million, and said it expects to fall “a few hundred vehicles short” of its 2021 production target of 1,200 vehicles. It lost $1.23 billion in the latest quarter, a big number but one it can stomach after raising $13.7 billion in its IPO, and building up to a current market

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