What happened
Electric vehicle (EV) stocks are soaring this week. A diverse mix of companies in the sector were all higher by more than 20% for the week, as of Thursday at 2 p.m. ET. EV maker Lucid Group (LCID +3.19%) was up by 30%, charging network company ChargePoint Holdings (CHPT +0.66%) was 24.1% above last Friday's closing price, and solid-state battery maker QuantumScape (QS +1.32%) was rising by 32.1% for the week, according to data provided by S&P Global Market Intelligence.
NASDAQ: QS
Key Data Points
So what
Many growth stocks were rising this week as investors anticipated -- and received -- tamer inflation data that spurred hopes that the Federal Reserve would slow, or pause, interest rate hikes. That helped these early-stage growth companies recover some of the big losses the stocks experienced in 2022.
Investors discount future potential earnings more when interest rates rise and borrowing costs are higher. All of these names will need to continue to invest capital as they build their businesses. But there was also some positive news in the underlying businesses that helped drive the share prices higher this week.
Image source: Lucid Group.
Now what
Lucid updated investors with its fourth-quarter and full-year vehicle production and delivery results Thursday morning. The stock moved higher on the news, but it also extended the uptrend the stock had already been experiencing this week.
NASDAQ: LCID
Key Data Points
Lucid produced almost 3,500 of its Air sedans in the fourth quarter to reach a total of 7,180 for the full year. That exceeded the company's most recent estimate for 6,000 to 7,000 vehicles to be produced in 2022. However, the company had lowered the bar by reducing that guidance twice this year.
It was impressive, though, that the company ramped up production enough in the fourth quarter to account for nearly half of its production for the full year. Investors will want to listen to what management says about that progress as well as whether all of those vehicles produced have customers waiting for them. The company did note that only 1,932 were delivered in the fourth quarter. It's important to know whether that is simply a timing issue with transit, or if Lucid is building inventory of unsold vehicles. The latter would be a red flag for investors.
ChargePoint and QuantumScape are both rising this week on a bounce from the prior significant drop in the stocks, and with help from economic data that showed inflation continues to ease. ChargePoint did also announce a new partnership late last week with Mercedes-Benz that will result in over 400 charging hubs being added in North America. That will include more than 2,500 ChargePoint DC fast charging ports in the U.S. and Canada.
These stocks are valued by investors based on where the businesses are expected to be several years from now. They will undoubtedly be volatile along the way. This week that volatility gave investors some relief from last year's poor results.
