EV Makers Are on the Rise Again

Shares in many producers of electric vehicles (EVs) continued to soar last week after experiencing a sharp selloff in 2022 as the Fed’s aggressive tightening of monetary conditions hurt unprofitable growth stocks.

Here we look at the three EV stocks that recorded solid gains last week:

XPeng 

Xpeng’s (XPEV:US) U.S.-listed shares soared on Friday after the Chinese EV startup announced the pricing of its new G6 sport utility vehicle at a price that has been considered as attractive.

The new G6 EV costs as much as 20% lower than Tesla's Model Y in China. Hence, investors expect XPeng to record strong sales of its new model, which is now being reflected in the stock price. G6’s price starts at 209,900 yuan ($28,882), much cheaper than Model Y which starts at 263,900.

"We believe that the G6 will become the best-selling model in Xpeng's history," said Hanyang Wang, an analyst at 86Research Ltd.

Tesla’s Model Y has experienced strong sales in China recently. More precisely, Model Y has become the world's top-selling vehicle in Q1 2023.

"We do admit the G6 pricing strategy created a unique product segment of BEV (battery electric vehicle) SUV at the 200,000-230,000 yuan range, which attracts customers wanting an entry-level mid-sized BEV SUV but cannot afford a Tesla model-Y or Xpeng P7i," Citigroup analysts also wrote to their clients.

Deliveries of the new vehicle will begin as soon as July. The EV startup will hope that the new model can reaccelerate sales growth after the company delivered just 7,506 EV units in May, which represents a decrease of 25.9% compared to the same period last year.

XPeng U.S.-listed shares soared over 35% last week, becoming one of the best-performing stocks in the U.S. stock market.

Lucid Group

Lucid Group (LCID:US) gained 26% last week after the U.S.-based EV startup secured a much-needed win with the recently-announced Aston Martin Lagonda partnership. Two carmakers agreed on a strategic technology partnership that will see Lucid supply the legendary British carmaker with high-performance EV technology. 

Under the terms of the agreement, Lucid will get a roughly 3.7% stake in the UK company after Aston Martin issues around 28.4 million shares to Lucid. The British carmaker will also make phased cash payments to the firm. The aggregate value of shares issued and cash payments totaled about $232 million.

Aston Martin’s goal has been to secure access to Lucid’s current and future powertrain and battery technology as it makes an aggressive push to transform its embattled brand into a powerful EV player globally.

"In line with its strategy, Aston Martin selected Lucid, recognizing the profound benefits of adopting its world-leading electric drivetrain technology, exemplified by the breakthrough 516-mile EPA-estimated range achieved by the Lucid Air Grand Touring,” said Peter Rawlinson, CEO and CTO, Lucid. 

On the same day when the Aston Martin partnership was disclosed, Saudi Arabia’s Public Investment Fund (PIF) disclosed that the investment titan acquired 266 million shares in the electric-vehicle maker for about $1.8 billion through a private placement.

PIF’s subsidiary Ayar Third Investment purchased the shares to further solidify PIF as Lucid’s majority shareholder.

Congress members Zoe Lofgren, Ro Khanna, and Daniel Goldman were all selling Lucid shares in the last couple of months. 

Rivian

Rivian Automotive (RIVN:US) closed 23% higher after the U.S.-based EV maker recently announced it will adopt a Tesla charging adapter. Rivian will be able to access 12,000 Superchargers with adapters in the U.S. and Canada in the spring of 2024. The EV company also committed to developing a Tesla-style charging port standard on its vehicles, starting in 2025.

This way, Rivian followed Ford Motor and General Motors in adopting the North American Charging Standard (NACS), which has been used by Tesla for years.

"It's great to see the industry coming together to adopt the North American Charging Standard," Tesla's Senior Director of Charging Infrastructure, Rebecca Tinucci, said in a statement.

Canaccord Genuity analysts weighed in positively on Rivian shares recently.

“While Rivian's operational issues since its 2021 IPO have proven frustrating, its vehicles remain highly desirable and well-reviewed. We see the operational clouds breaking as production ramps and financials improve. We would also encourage management to continue to fortify the balance sheet to de-risk operations and instill confidence in stakeholders and customers."

Congressmen Ro Khanna and Daniel Goldman were trading Rivian stock in 2023, which fell 90% from the record high set following the initial public offering (IPO) in November 2021. Representatives Marie Newman and Dan Crenshaw both bought the stock above the $100 mark back in 2021 while shares of the EV maker closed last week at $16.66.