Tesla Dominance Put To The Test: How EV Upstarts Lucid, Rivian, Fisker Stack Up In Q2 Results

Electric vehicle start-up Lucid Group Inc. LCID, and Fisker Inc. FSR announced quarterly earnings on Wednesday, drawing comparisons to industry leader Tesla Inc. TSLA. Ahead of that, Rivian Automotive Inc. RIVN issued its second-quarter production and deliveries update.

“Tesla is the next Tesla,” Sawyer Merritt, a Tesla influencer tweeted following the results. This apparently is a dig at some people according the moniker “the next Tesla,” to the startups.

Merritt’s claims are not without any merit. Hard numbers testify to the fact Tesla continues to be a force to reckon with.

Tesla’s Q2 Sales Way Above Rest: Austin, Texas-based Tesla delivered 254,695 EVs in the second quarter – a quarter ravaged by factory shutdowns and supply chain challenges.

Sales did slip back 18% from first quarter kevels but the strong comeback by Tesla in China after an abysmal April is commendable. As the Giga Shanghai factory began cranking back up following a 3-week shutdown in April, Tesla was quick with the ramp-up.

Lucid and Rivian were nowhere near Tesla in terms of deliveries, while Fisker is still a pre-revenue company.

Lucid’s Lean Quarter: Lucid said it delivered merely 679 vehicles during the quarter. The Newark, California-based company once touted as “Tesla killer” produced 1,405 Lucid Air sedans in the first half of 2021.

Revenue came in at $97.3 million for the quarter. On the earnings call, Lucid CEO Peter Rawlinson blamed it all on planned and unplanned pauses in production as well as supply chain and logistics issues. For two weeks and a half, no daily production happened at the factories, he said.

Lucid is currently selling three variants of the Air sedan – the Dream Edition, Touring and Grand Touring. The cheapest of these is the Touring, priced at $107,400. As the economy grapples with a market slowdown, and potentially a recession, consumers may have the proclivity to cut down spending, especially on consumer discretionary items such as cars.

Tesla CEO Elon Musk’s words seem to ring in true here. He once said “prototype easy, production hard,’ and on another occasion, he said, “Manufacturing is so hard. I have the utmost respect for those who build things.”

Related Link: Why This Analyst Thinks Tesla Is The Most 'American' Electric Vehicle Company

Rivian Improves Upon Its Q1 Performance: Rivian’s update issued on July 6 proved healthy for the stock. From under $30 the stock ran up to a high of $36.79 on Wednesday.

The EV maker, which currently sells the R1T EV pickup truck and the R1S SUV, said it produced 4,401 vehicles at its Normal, Illinois facility in the second quarter. It delivered 4,467 vehicles. The company is set to release its full quarterly results a week from now.

The relief rally the stock witnessed following the results could be due to investor optimism over production increasing by about three-fourths from the first quarter. Deliveries climbed 264% quarter-over-quarter.

Fisker Yet To Open Account: Los Angeles, California-based Fisker's Ocean SUV is still in the "vehicle testing and validation phase." Production is set to start on November 18.

Apart from the SUV, Fisker and its collaboration partner Hon Hai Precision Industry Co. Ltd. HNHPF are working on the budget model Fisker PEAR EV at the latter’s newly-acquired Ohio plant.

Commenting on Lucid's results Loup Funds co-founder Gene Munster said Lucid is making Tesla look good.

"It doesn’t matter if they blame it on supply chain, or blame it on the rain — $TSLA is doing a better job of navigating this mess," he added.

$LCID is making Tesla look good. Lucid just cut its full year production number to 6k from its original 20k estimate. Stock is down 12%.

It doesn’t matter if they blame it on supply chain, or blame it on the rain — $TSLA is doing a better job of navigating this mess. pic.twitter.com/WMnrORzRJj

— Gene Munster (@munster_gene) August 3, 2022

Tesla’s Guidance Vs. Rivals: Tesla’s long-term delivery growth guidance of 50% suggests the company has to overwork to hit targets. Musk, however, sounded upbeat on the second-quarter earnings call.

“..we have the potential for a record-breaking second half of the year,” he chimed in.

Nevertheless, it is a tall order for even a company like Tesla. To hit the full-year target of 1.4 million deliveries, Tesla has to deliver a little under 900,000 cars in the second half compared to the 516,469 vehicles sold in the first half.

Lucid, meanwhile, downwardly revised its 2022 production estimate from 12,000–14,000 units to 6,000 to 7,000 units.

“Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered," CEO Rawlinson said in a statement.

Lucid suggested a strong demand outlook for its EVs. Customer reservations for its Air sedan increased 7,000 to 37,000 in the second quarter.

Rivian, meanwhile, maintained its 2022 production guidance of 25,000 units. In early March, the company had cut its forecast by half from the previous estimate of 50,000 units.

Fisker, which is yet to have a product on market, said consumer demand for its Fisker Ocean SUV remained strong.

As of Aug. 1, reservations totaled 56,000, including the 5,000 preorders for its limited edition Fisker Ocean One.

Startups Trade At Ludicrous Valuation: The market downturn has pressured stocks of EV startups and they are deeply in red for the year-to-date period.

So far this year, Lucid, Rivian and Fisker are down about 46%, 65%, and 34%, respectively. In comparison, Tesla has lost a more modest 13%. Despite moderation in stock prices, valuations are still unattractive.

Here’s how Tesla and the startups compare on Price/Sales ratio*:

• Tesla: 15.18
• Lucid: 359.89
• Rivian: 203.30

*data compiled by Yahoo Finance

Benzinga’s Take: Economic and geopolitical challenges are to be partly blamed for the dismal performance of the EV startups. The supply chain was already constrained following the 2020 COVID pandemic. The war in Ukraine that erupted in late February and the COVID resurgence in China in late March aggravated the situation.

Tesla has the frontrunner advantage, but it also once found itself in deep trouble amid the financial crisis and the Great Recession that started in 2007. Strapped for cash, Musk considered taking Tesla private. These new EV companies, therefore, should be given the benefit of doubt. Demand should not be a problem as analysts have been saying the EV market is not a “zero-sum game” and will likely allow multiple players to operate profitably. If these companies have a superior product and execute on plans, they can set right the teething problems and emerge as serious contenders.

EV Stock Price Action: Lucid shares were tumbling 13.13% to $17.86, while Fisker was seen edging up 0.38% to $10.45, according to Benzinga Pro data. Rivian was moving in sympathy with Lucid, with its shares shedding 1.64% to $35.99. Meanwhile, ahead of its annual shareholders meeting, Tesla stock was gaining 1.27% to $933.93.