What happened
Investors are focused on electric vehicle (EV) makers today for a good reason. After sector pioneer Tesla (TSLA 1.50%) reported earnings, stocks of several upstarts are moving higher. Rivian Automotive (RIVN 3.65%) shares jumped over 2%, while both Nio (NIO 0.38%) and Lordstown Motors (RIDE -5.97%) popped nearly 5% early Thursday. As of 12:05 p.m. ET, Rivian was still up 0.5%, Nio held onto a gain of 1.7%, Lordstown was up 2.3%, and Lucid Group (LCID -1.39%) rose 0.9%.
That all came after Tesla reported third-quarter earnings that showed demand remains very strong.
So what
Tesla reported earnings that nearly set a new quarterly record even in the face of headwinds that are affecting the industry globally. That bodes well for other EV makers that are working to ramp up production and achieve profitability themselves. Rivian will report its quarterly update on Nov. 9, and investors will want to hear several things from the company. Supply chain issues have affected the entire industry, and Tesla also had shipping bottlenecks that forced it to deliver 22,000 fewer electric vehicles than it produced. But it maintained its automotive gross margin versus the prior quarter.
Rivian investors want to know if it remains on track for its production goal for 2022 and how it is handling other headwinds. That's the case for Chinese EV maker Nio also, as it becomes more of a global EV supplier beyond just China.
Now what
Nio announced this week that it has begun delivering its luxury ET7 flagship sedan to Germany, the Netherlands, Denmark, and Sweden. That's the first expansion in Europe since it first exported vehicles from China to Norway last year. Tesla also supplies both China and Europe with vehicles produced at its Shanghai plant in China. That plant produced a monthly record 83,135 vehicles in September, showing that demand remains robust in the same markets that Nio supplies.
Overall, Tesla reported third-quarter production jumped 54% year over year. While shipping constraints prevented all of it from being delivered, they are vehicles that have customers ready to accept them. That demand is essential for companies like Rivian, Nio, Lordstown, and Lucid to move toward profitability as they ramp up production.
Tesla stock moved lower after its announcement as some investors focused on the discrepancy between production and deliveries. But that is likely a short-term logistics issue, and it's more important for early stage companies like Rivian and the others to see demand remaining strong. That helps explain why these names moved higher today.
