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Shares of the electric vehicle (EV) maker Rivian Automotive (RIVN -1.36%) were sliding this morning on seemingly no company-specific news. Instead, investors may be reacting to the fact that fellow EV maker Tesla delivered fewer vehicles in the third quarter than Wall Street was estimating.
EV investors often look to other companies to gauge how well the industry is doing, and it appears that Rivian shareholders took Tesla’s latest vehicle production and delivery numbers as a troubling sign for other EV companies.
As a result, Rivian’s stock fell by as much as 5.8% today and was down by 4.2% as of 11:15 a.m. ET.
Over the weekend, Tesla said it delivered a record 343,830 vehicles in the third quarter (ending on Sept. 30), which was up 42% from the year-ago quarter but below analysts’ consensus estimate of 364,660 deliveries.
Image source: Rivian.
Total vehicle production for the quarter reached 365,923, up 54% from the year-ago quarter.
In a press release, Tesla said it’s “becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.” That may have some investors worried that Rivian could face some transportation logistics problems as well.
Rivian investors may also have seen comments that Wedbush Securities analyst Dan Ives made to Reuters. Ives said that Tesla’s latest vehicle production and delivery numbers could be showing signs of some demand problems and added, “There is a dark cloud over the auto sector.”
The automotive industry — and EV companies in particular — have been hit with rising material costs as they deal with supply chain issues and soaring inflation. As a result, many investors have left risky EV stocks because of the uncertainty in the economy.
There’s no getting around the fact that EV stocks are suffering from a lack of investor confidence right now. Rivian’s share price is down 68% since the company went public in November 2021.
And Rivian shareholders may not see a share price rebound anytime soon. Inflation is still at a 40-year high in the U.S. and the Federal Reserve is committed to raising rates in order to bring it back down.
With vehicle prices on the rise, inflation making loans more unaffordable, and increasing concerns about an economic slowdown, EV sales could suffer in the short term.
That doesn’t mean Rivian won’t end up being a good long-term investment, but shareholders will likely have to be very patient before they potentially see the company’s stock turn around.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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