$Rivian Automotive, Inc.(RIVN)$ has garnered investors’ interests after the EV maker disclosed that Volkswagen would invest up to $5 billion in a new joint venture. News of fresh capital allays concerns over Rivian’s cash flow to support the launches of its next-generation vehicles, the R2 and R3 mass-market SUVs. This sent its stock price soaring over the past few weeks. However, until Rivian is able to demonstrate profitability, I think that the stock price has run ahead of its fundamentals amidst softening demands for EV, and I would adopt a more cautious view and refrain from FOMO.
Sluggish demands, growing competition and prevailing price war to maintain market dominance have been adding to the woes of the Chinese EV trio $NIO Inc.(NIO)$ , $XPeng Inc.(XPEV)$ , $Li Auto(LI)$ along with the latest entry $XIAOMI-W(01810)$ . Slowing demands for electric vehicles in China are reflected in the latest July sales numbers published in China. As more players jump onto the EV bandwagon, the battle for market share is intensifying. As the Chinese EV makers struggle to sustain growth amidst rising competition and narrowing profit margins, their stock prices are likely to stay subdued.
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