EV Companies Had a Difficult Quarter as Nikola and Lucid Miss Investor Expectations
Key takeaways
- EV start-up Nikola refocuses on the North American market while Lucid revealed greater losses than expected
- Nikola shares dropped 13% and Lucid’s stock price fell 9%
- A dismal first quarter for the EV market as a whole as consumer and business spending drops
Ever since Tesla revealed it had missed expectations for its Q1 earnings, investors’ attention has been focused on the EV industry. Unfortunately, it’s more bad news for the sector as start-ups Nikola and Lucid both missed targets, but there’s hope for both companies with grand plans to innovate in 2023. Let’s get into the details.
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What were Nikola and Lucid’s earnings reports?
EV trucks company Nikola has confirmed it’s dropped out of the European market to focus on its North American business after it missed its revenue target. Revenue came in at $11.1 million compared to the $12.5 million prediction, but adjusted loss per share came in at 26 cents as expected. Its net loss was $169.1 million for Q1.
Lucid’s earnings report revealed bigger quarterly losses than expected and the EV start-up has revised its guidance for 2023. While revenue rose to $149.4 million from $58 million last year, Lucid lost $780 million in Q1 compared to an $81.2 million loss the previous year.
The two earnings reports are more bad news for the EV sector, which is struggling with sales as the economy bites. Tesla, one of the biggest EV brands and owned by Elon Musk, reported a drop in its gross margins after rolling out price cuts across its EV models.
How did Wall Street react?
Unsurprisingly, neither company fared well on Wall Street after their respective announcements. Nikola’s stock plunged 13% while Lucid’s share price dropped 9% after markets closed on Monday. Lucid has tanked 60% in the last 12 months, and Nikola stock has dropped a massive 61% this year.
There’s some hope for recovery. Nikola said it had orders for 140 hydrogen fuel-cell trucks for 12 customers, and Lucid aims for 10,000 vehicles to be in production in 2023. It’s also planning on unveiling its Gravity SUV later this year. It could be enough to pull these two EV start-ups out of the danger zone with investors.
The bottom line
There’s no denying that the EV industry is currently struggling with the macroeconomic situation. As households have less to spend on what’s considered a luxury, and businesses cut back on spending, the market adapts as quickly as possible to survive. Watch this space.
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