In a year that has been tough for growth stocks of all colors and stripes — especially EV companies trying to make room for themselves in a still-nascent industry while competing with century-old automakers — Rivian’s misfortune still stands out. Among the sizable EV startups in the US, shares of the electric-truck maker have fared the worst this year by a mile, down 64% through Wednesday’s close.
“More speculative investments — like EVs — may struggle as the Fed continues to withdraw liquidity from the market,” said Wiley Angell, chief investment officer at Ziegler Capital Management. “Though the current administration’s push for EVs may support sales on the margin, Rivian’s earnings are still expected to be negative for the next five years.”
Risks to the group are many — EVs are still far from mainstream and also more expensive than gas-fueled cars, and a surge in the battery raw materials means their prices will continue to rise before technology improves further and brings the costs down. To make matters worse, the stubborn supply-chain crisis that has plagued the automotive industry is even harder to navigate for startups.its 2022 production target, citing “extraordinary supply chain and logistics challenges.
And then there is the change of sentiment in the stock market, where the specter of a recession has turned investors risk-averse.