The investor community is abuzz about Rivian’s announcement of a Q3 net loss of $1.88 per share or $1.72 billion against revenue of $536 million for the third quarter of 2022. The company also announced that it expects a total adjusted loss of $5.4 billion for the full year.
The company fell short of analyst estimates that expected a loss of $561 million, but exceed expectations an expected adjusted EPS loss of $1.86 per share, coming in at $1.57 per share. Additionally, it offered up plenty of positive news which sent the company’s stock up, rising from $27.53 to $32.90 on Wednesday, which it maintained closing at $32.96 on Thursday.
Officials noted its loss was smaller than expected, its preorder numbers remained high allowing the company to reaffirm if full-year production output. The company also confirmed its smaller R2 SUV is expected to begin production in 2026 at the planned Georgia plant.
Comparable losses and some gains
Rivian’s story is reflected by other nascent EV makers across the industry. Lucid’s (LCID) most recent earnings, reported Sept. 30, revealed a loss of $670.2 million, or 40 cents per share. Nikola (NKLA) lost 28 cents per share and Fisker (FSR) lost 49 cents per share.
Lordstown Motors (RIDE) reported losses of $154.4 million or 73 cents per share. Canoo Inc. (GOEV) reported losses of $164.4 million or 68 cents per share at the end of June. Faraday Future (FFIE) won’t release its earnings until Nov. 15, but analysts expect a loss of 37 cents per share on $10 million in earnings. The story is repeated overseas, with Chinese EV maker Nio (NIO) reporting a loss of $571.2 million (4.14 billion RMB).
However, the more established EV companies are reporting positive numbers. Chinese EV automaker BYD (BYDDY) reported revenues of 5.6 billion RMB (about $779 million) in the third quarter. Leading U.S. EV maker Tesla (TSLA) reported $3.3 billion in revenue for the quarter, which is almost twice the company’s revenue for the same quarter last year.
The stock market reacts
Amid the reports, the market reaction has also been mixed. Canoo stock rose by 6% on its news. However, Tesla dropped 3.5% with its report, primarily because the company failed to meet analyst expectations, but also due to market uncertainty over CEO Elon Musk’s recent quixotic behavior purchasing the now-privately-held social media company Twitter.
Lucid lost ground on its news, with shares sliding nearly 18% on its announcement this week, while Nikola is down more than 10% since its peak at the end of October. Fisker had been rising through October but crashed earlier this week. The stock is rebounding now, showing a 14.37% rise during the past month. Lordstown is also up 8.54% over the last month.
With its recent turmoil, Faraday Future is not faring so well, dropping 13.63% in the last month. It’s down to 58 cents per share from a high of 69 cents at the start of this week, but that’s still well up from its 30-day low of 46 cents per share on Oct. 24.
Historical context
Taken as a snapshot, it would be easy to project Tesla as a long-term winner. However, Tesla has years of development advantage over the upstarts, and took its own losses earlier in its history. Tesla turned its first positive revenues in mid-2020 after 10 years of losses since its 2010 IPO.
Founded in 1995, BYD has been in positive earnings territory since reporting began in 2009, except for a small loss of about $20 million in 2011.
Overall, the market is willing to accept losses as long as they are accompanied by progress. As the upstarts bring their products to market, consumer decisions will be reflected in revenues and the companies’ stock prospects.