What happened
U.S.-based electric vehicle (EV) company stocks took off today after what had been a relatively rough start to 2023. After the first week of the year, stocks of EV makers Rivian Automotive (RIVN 2.18%) and Lucid Group (LCID) along with charging network company ChargePoint (CHPT 1.84%) were down between 5% and 11%. But that trend reversed today after investors decided to get back into this growth sector. Shares of Rivian were higher by 3.2% as of 2 p.m. ET. Lucid and ChargePoint stocks were up 7% and 13.6%, respectively, at that time.
So what
Each of these stocks was down substantially in 2022. That came as investors sought more safety and less risky growth stocks in an uncertain economic environment. Companies that are still spending money to invest in growth and aren't yet profitable were hit particularly hard. But the investment theses for these names got some better news that was reported by The Wall Street Journal on Friday. Market research data showed just how much growth in the U.S. EV sector increased last year, giving these names some added momentum today.
Image source: Lucid Group.
Now what
The fortunes of EV start-ups like Rivian and Lucid rely on the basic premise of EV market growth. ChargePoint also needs EV penetration to increase with customers in its U.S. and European markets. In its recent report, The Wall Street Journal cited data from market research company Motor Intelligence that showed sales of fully electric vehicles soared to 807,180 in the U.S. in 2022. That was more than two-thirds higher than the prior year and represented a near doubling of market share to 5.8% of all new vehicles sold.
Also notable was the fact that EV leader Tesla's market share dropped from 72% in 2021 to 65% last year. That highlights the progress that other EV manufacturers are making in the U.S. to build out their offerings.
Early-stage start-ups like Rivian and Lucid still make up a small slice of the market. Rivian reported last week that it came up slightly short of its goal to produce 25,000 of its vehicles in 2022. Lucid expects to have sold between 6,000 and 7,000 of its luxury EV sedans last year. Investors won't know how fast these companies expect to grow production in 2023 until they report their fourth-quarter and full-year updates.
ChargePoint is rooting for all EV makers to succeed. Late last week it announced it was partnering with global auto giant Mercedes-Benz to add over 400 charging hubs in North America. That will include more than 2,500 ChargePoint DC fast charging ports in the U.S. and Canada.
After the lousy year these stocks had in 2022, confirmation that the sector is indeed growing quickly is seemingly attracting some investors back into the sector today.
