E-cars: Start-ups get more orders – stocks are still under pressure

by Al Root
Barrons
Translation: Thomas Steer

The electric car startup Fisker is currently booking more and more orders for its all-electric SUVs. The same applies to competitors Lucid and Rivian.

This is good for the small electric car manufacturers – but not so much for their shares.

Fisker has 50,000 pre-orders for its Ocean SUV, which will be launched later this year; There are also 3,200 orders for the Pear SUV, which should be available in 2024. The Ocean starts at less than $ 40,000; the smaller pear costs $ 30,000. By comparison, Tesla’s standard Model Y costs around $ 63,000.

And more and more vehicles are also pre-ordered from Lucid and Rivian. Lucid receives pre-orders for its luxury model, Lucid Air. The price of the standard model, Air Touring, starts at $ 107,400; Air Dream Edition is offered for $ 169,000. Rivian’s bestseller is the R1T pickup, which starts at $ 67,500.

Lucid Motors
(WKN: A3CVXG)

The problem is: Investors are not interested in orders right now.

Fiskers’ share has fallen about 11 percent since the new order figures were released. Rivian and Lucid are also down, down 10 percent and 15 percent respectively. The Tesla share has also lost around 10 percent.

The market is clearly guilty of this. The S&P 500 and Nasdaq Composite are down about 8 percent and 9 percent, respectively.

The problem is inflation and has been for a while. Higher inflation puts pressure on the car industry’s margins due to higher costs. And higher interest rates, which are used to fight inflation, have a negative impact on demand for new cars. For most car buyers need to finance their car.

Newly started electric cars are hit harder than most traditional car manufacturers. Because especially in inflationary times, investors have little interest in companies that do not generate any free cash flow and no profits.

The fishing share is down about 46 percent this year. That’s about 64 percent during the November 52-week high of nearly $ 24 a share. Tesla shares have fallen about 38 percent so far this year and about 47 percent below their 52-week high in November of $ 1,243.49 per share.

At present, the e-mobility industry can only do one thing: process orders and save as much money as possible.

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