The demand for electric vehicles (EVs) is growing rapidly on increasing concerns surrounding climate change, rising oil prices, and the availability federal tax credits. New EV registrations soared 60% in the first three months of 2022. Also, the White House has set a goal of 50% of total vehicle sales to be electric vehicles by 2030.
This month the Biden administration announced that it would begin a $3.1 billion plan to boost domestic manufacturing of batteries to help the country shift from gas-powered cars to electric vehicles. The global electric vehicle market size is projected to grow at a 21.7% CAGR to 39,208units by 2030.
However, not all companies are well-positioned to capitalize on the favorable industry trend. In addition, sanctions on Russian metals, extended COVID-19 lockdowns in China, higher upfront costs, and growing competition in the EV space have weighed on the performance of some EV companies.
The shares of Rivian Automotive, Inc. (RIVN), Arrival (ARVL), and Mullen Automotive, Inc. (MULN) are down more than 73% in price year-to-date and we think could witness further price declines because of their poor growth prospects.
Rivian Automotive, Inc. (RIVN)
Headquartered in San Jose, Calif., RIVN designs, develops, manufactures, and sells electric vehicles and accessories. The company provides five-passenger pickup trucks and sports utility vehicles. It provides its Rivian Commercial Vehicle platform for an electric Delivery Van in collaboration with Amazon.com.
During the first quarter, ending March 31, 2022, RIVN’s loss from operations increased 285.1% year-over-year to $1.58 billion, while its net loss increased 284.8% from its year-ago value to $1.59 billion. The company’s loss per share amounted to $1.77.
The stock has plunged 73.5% in price year-to-date and 81.2% over the past six months.
RIVN’s POWR ratings are consistent with this bleak outlook. The company has an overall D rating, which translates to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
RIVN has an F grade for Stability and a D grade for Sentiment. Within the F-rated Auto & Vehicle Manufacturers Industry, it is ranked #44 of 68 stocks. To see additional POWR Ratings for Growth, Quality, Value, and Momentum for RIVN, click here.
ARVL researches, develops, and designs commercial electric vehicles (EVs), EVs components, robotic manufacturing processes for EVs, and associated software internationally. Its product portfolio includes commercial EV vans, buses, and cars. The company is headquartered in Howald, Luxembourg.
For the first quarter ending March 31, 2022, ARVL’s loss for the period amounted to €9.25 million ($9.78 million). Its interest expenses came in at €5.84 million ($6.13 million), compared to interest income of €1.29 million ($1.36 million) in the prior-year quarter. The company’s adjusted EBITDA loss increased 129.5% year-over-year to €59.66 million ($62.65 million).
The stock has declined 73.1% in price year-to-date and 81.8% over the past nine months.
ARVL’s weak fundamentals are reflected in its POWR ratings. The stock has an overall D rating, which equates to Sell in our POWR Ratings system. The stock also has a D grade for Stability and Quality. In the Auto & Vehicle Manufacturers industry, it is ranked 42 of 68 stocks.
In addition to the POWR Ratings grades I have just highlighted, one can see the ARVL rating for Momentum, Value, Growth, and Sentiment here.
Mullen Automotive, Inc. (MULN)
Headquartered in Brea, Calif., MULN, is an electric vehicle manufacturer and distributor. It also functions as CarHub, a digital platform that leverages AI to offer an interactive solution for buying, selling, and owning a car; and provides battery technology and emergency point-of-care solutions.
MULN’s loss from operations increased 484% year-over-year to $30.45 million during the quarter ending March 31, 2022. Its net loss grew 250.3% from its year-ago value to $32.57 million, while its net loss per share amounted to $0.63. The company’s net cash used in operating activities increased 342.6% to $24.87 million for the six months ended March 31, 2022.
The company’s shares have plunged 78.2% in price year-to-date and 90.7% over the past six months.
MULN’s poor prospects are also apparent in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system.
It also has an F grade for Sentiment, Quality, and Stability. MULN is ranked 60 in the Auto & Vehicle Manufacturers industry. Click here to see the additional POWR Ratings for MULN (Growth, Momentum, and Value).
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RIVN shares were trading at $26.73 per share on Wednesday afternoon, down $0.76 (-2.76%). Year-to-date, RIVN has declined -74.22%, versus a -17.04% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing. More...
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