Rivian Vs Lucid: Fund Manager Gary Black Dissects Divergent Tale Of 2 EV Makers After Q3 Results

Rivian Automotive, Inc. (NASDAQ:RIVN) and Lucid Group, Inc. (NASDAQ:LCID) reported their quarterly results on Tuesday after the closing bell. The two electric vehicle manufacturers had differing outcomes, leading to divergent stock performances in after-hours trading.

What Happened: Rivian upgraded its 2023 production guidance from 52,000 units to 54,000 units due to robust demand for its SUVs and pickups, as noted by Future Fund‘s Gary Black in a recent X, formerly Twitter, post. On the flip side, Lucid reduced its guidance again, lowering it from over 10,000 units to 8,000-8,500 units due to weakened demand for its large sedans, according to Black.

This contrast also manifested in the management’s communications. Black noted that Rivian CEO R.J. Scaringe exuded immense confidence in the company’s future, particularly with regard to the R2 platform. In contrast, Lucid’s Peter Rawlinson appeared “apologetic” and “cautious” about the economy and the company’s prospects.

See Also: Best Electric Vehicle Stocks

Why It’s Significant: While Rivian may have outperformed Lucid, both startups are grappling with losses and have yet to attain profitability. Lucid reported a loss of $630.89 million, and Rivian’s net loss for the quarter amounted to $1.37 billion.

The electric vehicle industry confronts a challenging economic environment marked by wary consumers. Lucid faces a relative disadvantage due to its higher-priced electric sedans.

In contrast, Rivian benefits from a built-in customer base through its electric delivery van for Amazon, even though it announced during the earnings call that it had ended its exclusivity agreement with the e-commerce giant. Furthermore, the forthcoming more affordable R2 next-gen EVs could provide insulation against economic uncertainties.

Lucid’s execution leaves much to be desired, as evident from the successive reduction in its guidance. As Elon Musk of Tesla, Inc. (NASDAQ:TSLA) is known to say, creating a prototype is straightforward, but mass production is the real challenge.

In after-hours trading on Tuesday, Rivian rose 4.36% to $18.18, while Lucid fell 4.19% to $4.12, according to Benzinga Pro data.

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