Following the heels of $Li Auto(LI)$ which surprised the market with overwhelming results on a set of stellar earnings reported this week for the previous quarter, $NIO Inc.(NIO)$ will be next in line to announce its quarterly earning results on 5 March, while $XPeng Inc.(XPEV)$ will be the last among the Chinese electric vehicle startup trio to report its earnings on 19 March. Li Auto's earnings have proven to be resilient in the EV maker's fight in the prevailing price war, after its earnings results revealed that price cuts in the past year to defend its market share against the incumbents BYD and Tesla, as well as its startup peers have not eaten into its bottom line. Li Auto has become the envy of the EV industry to be able to hold its margin stable amidst EV demand slowdown and intensifying competition, demonstrating its strengths in supply chain management and cost management. Li Auto is targeting to sell 800,000 cars this year, which if materialised, will mark a 113% jump from the 376,030 vehicles delivered last year! With such encouraging precedent and positive outlook set by Li Auto, hopes are buoyant that the earnings announcement by Nio and XPeng will cheer the market as Li Auto did.
$Rivian Automotive, Inc.(RIVN)$ stock plunged over 38% last week after a disastrous fourth-quarter earnings report that had shown no sign of profitability as the Tesla wannabe presented a loss of $1.36 per share in quarter four with absence of production growth this year, as it expects production of 57,000 vehicles that is flattish compared with last year. Tesla CEO Elon Musk had even posted on X, formerly Twitter, that he predicted that based on Rivian's cash balance, the company could go bankrupt in around six quarters. While he admitted that Rivian's product design was not bad, it had not been able to achieve mass production with positive cash flow in order for the business to be sustainable. As outspoken as he is, Elon even claimed that Rivian would need to slash costs massively and the executive team would need to "live in the factory or they will die". True enough, along with the earnings release, Rivian also announced that it would be trimming its workforce by 10% as part of its cost-cutting measures. However, I believe that more drastic corporate restructuring and EV demand generation will be required to turn around Rivian, otherwise I doubt it will be able to emerge from its downward spiral.
It takes a brave heart to ride through the intraday wild fluctuations in the stock prices of $Faraday Future Intelligent Electric Inc.(FFIE)$ , which despite having lost over 99% of its value over the past year, has been counting on the meme community to partake in short-squeezing of the struggling EV maker. However, I believe that any recovery in stock prices is going to be short-lived and that fundamentalists will prevail over time in the tug-of-war with the meme community, as the EV maker continues to be weighed under weak demands and a deteriorating balance sheet. In fact, Faraday Future's promise to turnaround the company, attain profitability and defend shareholder value has been fruitless so far, and its sustainability as a going concern is a big question mark to me.
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