Rewind the clock about a year ago and the stories of Lucid Group (LCID -3.03%) and Rivian Automotive (RIVN -2.78%) were quite different. Lucid had a string of disappointments for investors while Rivian arguably had more momentum than any other start-up electric vehicle (EV) maker. The stock prices reflected that, with the two EV makers moving in opposite directions.
The third quarter of 2024 has brought a reversal, with Lucid deliveries soaring and Rivian slashing its full-year production guidance. There's more to the story, though.
What have you done for me lately?
Let's first take a look at Lucid's third-quarter results. The EV maker produced 1,805 vehicles and managed to deliver 2,781 vehicles. While Lucid's production only increased 16%, it did enable the company to clear out some vehicle inventory. Its delivery tally was a significant 91% jump compared to the prior year, and good enough to set another Lucid record. It's Lucid's third straight quarter of record deliveries.
As previously mentioned, there's a little more to the story. A large driving force behind the company's surge in deliveries was heavy factory incentives on its Air sedan, which increased 28% during the third quarter compared to the prior year. In fact, those incentives hit a massive $19,403 per vehicle, according to Motor Intelligence.
With three consecutive quarters of record deliveries under its belt, and deliveries reaching 7,142 year to date, Lucid is more than on pace to meet its full-year forecast of delivering 9,000 vehicles.
What happened to Rivian?
Although Lucid's spike in sales was partially driven by higher incentives, Rivian might opt for that rather than the third quarter it had. Rivian's third-quarter deliveries dropped by 36% to 10,018.
Data source: Rivian production and delivery press releases. Chart by author.
Rivian also cut its full-year production forecast from 57,000 vehicles down to between 47,000 and 49,000. The production cut came as the company admitted it had hit a production snag due to a shortage of shared components between the R1 and RCV platforms. "This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues," Rivian said in a press release.
The silver lining for investors is that while the company hit a production snag and its Q3 deliveries disappointed, management reaffirmed its full-year delivery guidance of 50,500 to 52,000 vehicles. That means Rivian will have to deliver just a little over 13,100 vehicles to hit the low side of that range. Rivian can certainly hit that mark in the fourth quarter, assuming the third-quarter delivery decline isn't the start of a trend.
The big question for Rivian investors is whether this will impact the company's ability to turn a gross profit during the fourth quarter. Analysts will likely ask this question during the company's third-quarter earnings call.
What it all means
Rivian will be just fine moving forward, but investors look forward to the day these production snags are a thing of the past. This is a reminder that owning shares of an upstart EV company isn't for the faint of heart, and there will be wild swings up and down over the years. These stocks will remain speculative and should be a smaller part of your portfolio. Lucid and Rivian both have immense upside, but there's a long road ahead before either company nears profitability.
