What happened
It's reporting season for companies in the electric vehicle (EV) sector, and investors are reacting strongly to the results. That has included big drops for Lucid Group (LCID 1.19%) and Proterra (PTRA) and a big gain for XL Fleet (XL).
After Lucid gave investors its financial update, shares tanked yesterday. And the drop has continued into today. Like Lucid, Proterra didn't give investors the forward guidance they were looking for. Shares of Lucid and Proterra had dropped as much as 5.6% and 16%, respectively, earlier Wednesday. As of 3:08 p.m. ET today, both recovered some, with Lucid down 1.5% and Proterra down 4%. But vehicle electrification company XL Fleet was the winner of the group, with shares holding on to a 16.3% gain at that time.
Image source: Lucid Group.
So what
Lucid reported its first quarter of meaningful revenue, but it slashed its production outlook by up to 40% for the full year 2022. After previously saying it expected to manufacture 20,000 of its luxury electric Air sedans this year, the company updated guidance to a range of 12,000 to 14,000. CEO Peter Rawlinson said that was due to "extraordinary supply chain and logistics challenges we've encountered and our unrelenting focus on delivering the highest-quality products."
Proterra similarly said that while demand was strong, its electrification installations were limited in the second half of 2021 "primarily due to shortages of critical charging hardware." The company said production challenges due to these issues were likely to continue for several more quarters.
The jump in XL stock was as much a result of how far the stock had fallen as what came from its fourth-quarter and full-year report. The company did say it generated more than half of total 2021 revenue in its fourth quarter. But that $8 million was still down from the year-ago period. The company ended the year with about $350 million in net cash on its balance sheet, and its market cap was just $255 million going into the report.
Now what
Each of these companies is seeing growth hindered due to supply chain issues. Recent geopolitical events are adding to investor uncertainty related to that as well as other potential impacts.
While XL shares popped today, it may just be that investors realized its cash balance was significantly higher than its entire valuation. And the quarter showed that the business is still moving forward.
These companies all still need to prove they can grow into a profitable business. That won't happen anytime soon, and the stocks are bound to remain volatile, especially around the times operations and financial updates are released.
