To The Moon

🌟🌟🌟This week the best performing EV stock is $Rivian Automotive, Inc.(RIVN)$  as it is up 2.2% today and in the past 5 days, Rivian has jumped 17%.  However Rivian is still down 39% year todate. 

The good news is that Rivian has just unveiled its new R2 electric SUV at a launch event on Thursday.  In addition to that Rivian has also unveiled 2 additional compact SUV models  - the slightly smaller R3 and a performance variant called the R3X.

Rivian had hit an all time low after its 4Q23 earnings when it announced a disappointing production outlook for 2024.  Rivian said that it aimed to produce 57,000 vehicles this year, a slight decline from 2023 and well short of analysts expectations of 65,000 vehicles.

Rivian announced an adjusted EBITDA loss of  USD 2.70 billion versus USD 2.59 expected.  Rivian also planned to cut staff by 10%.

However it seems that investors are hopeful that Rivian has turned the corner and business will start to improve.  Rivian also received an analyst upgrade from Jefferies on Wednesday saying that Rivian has looked closest to Tesla on spirit.  Jefferies said that Rivian's proprietary software stack, strong brand identity has the potential to grow globally.  Jefferies has given Rivian a price target of USD 16, implying an upside potential of 45%.

In contrast $Faraday Future Intelligent Electric Inc.(FFIE)$  has dropped 10% today to 13 cents and in the past 5 days,   Faraday shares have sunk by 34%.    Faraday is now down 77% year todate and have lost a massive 99.8% in 2023.

Faraday Future has filed a lawsuit on Monday against Ding Lee who was Faraday ex Global CEO and the affiliated companies of Human Horizons for infringement of trade secrets and unfair competition. 

On February 25, Faraday has also announced a reverse stock split of 1 for 3 of its stock effective March 1.  This is Faraday's 2nd reverse stock split in just 5 months. 

Faraday has received a notice from Nasdaq exchange in December 2023 after it failed to meet its listing rules mandating a minimum closing share price of USD 1.

Faraday Future has only delivered 10 FF 91 2.0 Futurist Alliance between 2023 and 2024.    Matthias Aydt, CEO of Faraday has announced an updated plan 1.1 to strategically position itself for growth in 2024.  Faraday plans to develop a new market in the Middle East in 2024 in addition to the US and China. It signed an agreement with Abu Dhabi Investment Office to unleash Generative AI and advanced EVs for Abu Dhabi 's SAVI cluster. 

Faraday said that it is now prioritising cash flow breakeven over volume to avoid scaling production too quickly. 

It remains to be seen whether Faraday Future can be successful in its attempt to remain listed in Nasdaq, but it is certainly trying its best to turn things around. 

Rivian however is in a much better position as it has the backing of $Amazon.com(AMZN)$  which had invested USD 1. 8 billion in  2023.  However Rivian's sell off on February 26 have lowered Amazon's investment by USD 986.6 million.   Rivian has ended an exclusive agreement with Amazon on selling its delivery vans solely to Amazon which Rivian announced in Q323 earnings report.  This will allow other companies to purchase its fleet of delivery vans.  Rivian said that it can reach positive gross profit by Q4 24.   Rivian also plans to break ground on a new USD 5 billion factory in Georgia, USA in 2024.

Let's hope Rivian and Faraday succeed in turning things around in 2024.  However the competition among EV companies are rather  intense with price cutting the norm to stay in the race to survive and thrive. 

EV stocks like Rivian and Faraday are rather volatile and not suitable for risk averse investors.  However for those who like high risks, high rewards, these stocks would be more suitable.   There is no right or wrong in investing and everyone has different goals and different risk appetite.  Ultimately it is the results that count to build a resilient and successful portfolio.

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