In a landscape where electric vehicle (EV) sales are hitting stumbling blocks, two major players emerged as shining stars last month. Rivian Automotive (NASDAQ: RIVN) witnessed a notable 23% spike in its stock performance, while industry leader Tesla (NASDAQ: TSLA) experienced an 11% jump, according to data sourced from S&P Global Market Intelligence.
While investors flocked to these top-performing companies, other stocks faced a downturn as shareholders divested in brands deemed less promising. VinFast Auto (NASDAQ: VFS) serves as a stark example, struggling to gain traction with the EV market as evidenced by a 12.1% decrease in its shares last month.
A Turning Point for Tesla and Rivian
June breathed new life into investor sentiment towards Tesla following a challenging start to the year. Factors contributing to the earlier sluggishness included waning EV sales growth, distractions for CEO Elon Musk, and an expanding array of competitive EV offerings. However, Tesla’s stock received a significant boost last month after shareholders greenlit a controversial pay package for Musk.
With this hurdle cleared, attention shifted to Musk and the company’s core operations. Concerns about Tesla’s grand visions, such as the concept of self-driving robotaxis, were momentarily eclipsed as the company announced a forthcoming presentation on the subject slated for August 8. These developments triggered a trough-to-peak trajectory in Tesla’s stock price, a momentum which has carried into July.
Investor apprehensions surrounding Rivian took a different tone. Despite establishing a distinctive brand and augmenting sales over the past two years, the EV start-up grapples with persistent cash burn. However, a lifeline materialized in the form of an agreement with global auto giant Volkswagen. This collaboration entails investments of up to $5 billion in Rivian over a two-year span, composed of a $1 billion initial investment via a convertible bond. Subsequent infusions of $2 billion each are allocated for common stock and an EV technology joint venture project. The influx of capital is anticipated to propel Rivian towards production of its next-generation R2 vehicle platform, particularly the cost-effective SUV variant poised to attract a broader consumer base. Investors view this juncture as a potential springboard for Rivian’s prosperity.
Rivian’s R2 SUV is expected to begin shipping in early 2026. Image source: Rivian Automotive.
Revival in Electric Vehicle Sales
The conclusion of June hinted at a possible resurgence in EV sales, with several Chinese EV manufacturers reporting robust shipment figures for the month. Notably, Nio recorded back-to-back monthly delivery records in June.
Tesla also disclosed robust sales performance for the second quarter, surpassing projections despite a marginal 5% year-over-year decline in deliveries.
However, not all EV entities are witnessing favorable trends. The bankruptcy declaration by Fisker last month sent ripples of uncertainty through the sector, prompting caution among investors, particularly towards struggling ventures like Vietnam-based VinFast Auto. The company’s U.S. EV sales strategy hinges on a forthcoming plant in North Carolina aimed at accelerating market penetration. Regrettably, delays in the facility’s inauguration persist, with continued capital outlays towards its construction.
Investors are evidently discerning between winners and laggards in the EV domain. June unequivocally favored Tesla and Rivian as victors. Further clarity may surface as both companies announce pivotal updates in the upcoming period. Tesla is poised to unveil its earnings report on July 23, followed by a self-driving technology update on August 8. Rivian, on the other hand, will release its second-quarter earnings on August 6.
Assessing the Tesla Investment Landscape
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Howard Smith has positions in Nio, Rivian Automotive, and Tesla. The Motley Fool has positions in and recommends Tesla and Volkswagen Ag. The Motley Fool has a disclosure policy.