What happened

The stock market opened the trading week on an a high note, with major indexes rising more than 2% early Monday morning. The tech-heavy Nasdaq was leading the charge, with electric vehicle (EV) growth stocks like Rivian Automotive (RIVN -0.10%) and Lucid Group (LCID -1.97%) rising as much as 6% and 8.7%, respectively. EV start-up Canoo (GOEV 3.87%) was an even bigger gainer. As of 10:50 a.m. ET, Rivian was still higher by 5.9%, Lucid by 6.8%, and Canoo by 18%. 

So what

Today's bounce doesn't change what has been a painful year for shareholders of these growth companies. Shares of the EV start-ups are down between 67% and 80% year to date. The stocks have struggled as the companies work to build their respective businesses in the face of supply chain snarls and rising raw material costs. 

Canoo even warned of the potential for bankruptcy earlier this year. After the company reported first-quarter earnings in early May, management issued a warning in the company's Securities and Exchange Commission filing, saying there was "substantial doubt" that its business could continue. It reiterated that warning in August even as it subsequently reported potentially significant order wins, which is also what is helping the stock outperform today. 

Now what

Canoo said today that it has secured a binding order for 9,300 of its electric utility vehicle from commercial van rental provider Kingbee. The agreement allows Kingbee to double the order to 18,600 vehicles. Kingbee provides work-ready vans to supplement business fleets. Its customers include solar home system provider Sunrun, the Utah Department of Health, and small and medium-sized business across the U.S.

Canoo also announced a nonbinding agreement with retail giant Walmart earlier this year. That agreement was to purchase 4,500 of Canoo's lifestyle delivery vehicles that would be used by Walmart to support its e-commerce business. Canoo has provided advanced deliveries for Walmart to test in a seven-days-a-week program in the Dallas area.

Those orders may be a lifeline for Canoo, but just having orders isn't enough to survive. Rivian and Lucid both have a significant backlog of orders. But both companies have lowered production forecasts for 2022 as they work to navigate supply chain disruptions. They also must overcome rising raw material costs. 

Rivian next reports its quarterly update on Nov. 9, when investors will hear more about how it is managing those headwinds. As of June 30, Rivian had orders for about 98,000 of its R1 platform trucks. But it only produced 7,363 vehicles in the third quarter. Lucid similarly has a strong order book, but manufactured just 2,282 of its luxury electric sedans in the third quarter. 

Rivian and Lucid remain well capitalized, but while investors are celebrating the order announcements from Canoo, they should remember that the company has stated that it will need to raise additional capital. That's what investors should focus on when that company reports its third-quarter results next month.