Electric vehicle stocks tumbled Monday in a brutal sell-off as wary investors backed away from risk assets.
The broader market extended its longest weekly losing streak in a decade.
Brian Price, head of investment management, Commonwealth Financial Network, said “the path of least resistance remains lower for global equity markets to start the week.”
“The overwhelming focus continues to be on inflation, rising interest rates, and the war in Ukraine,” Price said. “The combining factors of tight supply chains resulting from China’s zero Covid policy, and rising oil and food prices due to the war in Ukraine, are causing inflationary fears that are triggering a move out of risk assets.”
Risk is an issue with many electric vehicle makers as investors search for the next Tesla.
Companies will need to raise additional cash as they ramp up production, but the current climate is looking increasingly risk-averse.
Lordstown Motors (RIDE) – Get Lordstown Motors Corp. Class A Report shares were off 5.5%, and down 48% since Jan.3. The company, which posted a wider-than-expected loss for the first quarter on Monday, said its still expected production of its Endurance electric truck to start in the third quarter with commercial deliveries expected in the fourth quarter.
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CEO Daniel Ninivaggi said in a statement that “we made significant progress toward launching the Endurance during the first quarter,” adding that “our highest priority remains getting the Endurance into customers’ hands.”
“We are managing through a tough macroeconomic environment, and we are focused on managing our liquidity as we bring the Endurance to launch,” said Adam Kroll, chief financial officer. “At the same time, we understand that raising additional capital is critical to our ability to achieve our business plan in 2022 and beyond.”
Fisker (FSR) – Get Fisker Inc Class A Report was off 5% at last check and down 40% from January. Lucid Group (LCID) – Get Lucid Group, Inc. Report was also hurting, falling nearly 11% on Monday and down 55% since Jan.3.
Rivian Automotive (RIVN) – Get Rivian Automotive, Inc. Class A Report, which tumbled nearly 19%, open lowered after CNBC reported that Ford Motor Co. (F) – Get Ford Motor Company Report is selling 8 million of Rivian’s as the insider lockup for the stock expired on Sunday.
This year, Rivian shares have dropped more than 76%. Rivian’s market capitalization has shrunk by almost $70 billion to $21.91 billion from Dec. 31.
Rivian is scheduled to report quarterly earnings on Wednesday.