What happened
Technology stocks are leading the market lower Tuesday morning, and names in the electric vehicle (EV) sector are showing some of the largest drops. Shares of Rivian Automotive (RIVN -2.27%), Lucid Group (LCID 0.41%), and Blink Charging (BLNK -2.97%) pared some of their early losses but still led growth and tech stocks lower. As of 12:15 p.m. ET, Rivian was down 4.1%, Lucid was lower by 7.4%, and Blink Charging stock was off by 5.9%.
So what
Rivian shares spiked about one month ago after it reported its third-quarter results, but it has now given back all of those gains and more. Rivian's shares are now near their six-month lows.
The slide over the last month hasn't been unique to Rivian. Lucid stock has plunged nearly 40% in that time.
Today's declines aren't due to any specific business news from any of these companies. Rivian, in fact, just announced some positive news related to the growth and development of the renewable energy sector.
Image source: Rivian Automotive.
Now what
Rivian expects to produce 25,000 vehicles at its Normal, Illinois, plant this year, with plans to continue to increase that production volume next year and beyond. The company also expects to have a second factory manufacturing EVs in Georgia starting in 2026.
Yesterday, the company announced it has signed a power purchase agreement (PPA) to utilize renewable energy sources to power as much as 75% of its Illinois plant operations. The agreement with Apex Clean Energy will supply 50 megawatts (MW) of electricity from a proposed nearby wind farm to Rivian's plant. Upon completion, the project will generate 300 MW of renewable energy and is scheduled to begin operations in 2024. Approvals and permitting are a stipulation of the PPA.
Some investors in EV stocks -- and likely most buyers of electric vehicles -- want to see a growing renewable energy sector. So Rivian's plans and recent announcement fit the company's mission and that of many shareholders. But investors need to make money, too.
Lucid's recent stock drop was due to the struggles it is having getting its production ramped up. It has cut 2022 production targets twice and only expects between 6,000 and 7,000 of its vehicles to be produced this year. It also has laid out plans to raise as much as another $8 billion over the next several years to fund and grow its operations. The company already announced $1.5 billion raised last month that will dilute existing shareholders.
Blink Charging is also a long way from profitability. Even with revenue growing 169% year over year in the third quarter, its net loss also grew by 67%.
Those growing losses are why investors in search of safety were fleeing from names like Rivian, Lucid, and Blink Charging today.
