Shares of electric vehicle (EV) stocks Nio (NYSE:NIO), Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID) are all in the red today. Each company has dealt with its fair share of challenges in recent weeks.
Let’s start with Nio, which reported its third-quarter earnings a week ago. They were disappointing, to say the least, although NIO stock actually climbed higher following the report. Now, investors may be realizing that the price surge wasn’t backed by good numbers.
Revenue tallied in at 19.1 billion yuan, below the analyst estimate of 19.4 billion yuan. The company also experienced declining gross and vehicle margins and a net loss that increased by 10.8% year-over-year. Additionally, the EV company guided for the delivery of between 47,000 and 49,000 vehicles during the fourth quarter compared to third quarter deliveries of 55,432 vehicles.
Finally, Nio also announced that it may be considering additional job cuts following a 10% workforce reduction last month.
Why Are EV Stocks NIO, RIVN, LCID Down Today?
For Rivian and Lucid, concerns about unionization among its employees are underway. The United Auto Workers (UAW) has revealed that workers from 13 nonunion automobile manufacturers, including Rivian and Lucid, are in the process of starting synchronized campaigns nationwide in order to join the UAW. Recently, the UAW signed an agreement with General Motors (NYSE:GM) and Ford (NYSE:F) involving higher pay and a shorter time period to reach the highest pay tier.
The UAW has established itself as an outspoken advocate for employee rights and pay. Higher salaries and wages can be detrimental to profitability and margins while benefitting employees.
Meanwhile, Lucid CFO Sherry House has announced her resignation, effective immediately. House will stay at the company in an advisory role through Dec. 31, while Vice President of Accounting and Principal Accounting Officer Gagan Dhingra will step up as Lucid’s interim CFO and Principal Financial Officer during the search for a permanent replacement.
House’s resignation comes just days after the Nasdaq announced that LCID stock would be removed from the Nasdaq 100 index, effective Dec. 18. The index tracks the 100 largest non-financial companies listed on the Nasdaq exchange, while LCID stock has plummeted by over 30% this year.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
