As usual, there was much going on in the fast-growing electric vehicle (EV) space this past trading week, Aug. 7-11. Following are three of the top EV stories of the week of which investors should be aware.
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1. The Tesla CFO baton was handed off
On Monday, Tesla (TSLA -1.57%) revealed via a regulatory filing that CFO Zachary Kirkhorn is leaving the electric vehicle pioneer after a 13-year tenure, the last four and a half years as its financial leader. He stepped down as CFO on Aug. 4 but will remain with Tesla until the end of the year to "support a seamless transition," the filing said.
Tesla's Chief Accounting Officer, Vaibhav Taneja, was appointed CFO as of Aug. 4 and will also continue in his current role.
It's never a good thing when a well-regarded CFO -- as was the case with Kirkhorn, whose tenure saw Tesla's financials improve dramatically -- leaves a company. It could be a neutral or a negative, as individual investors just about never know what goes on behind the scenes.
The decision to part with Tesla might have been entirely Kirkhorn's. It's also possible that he could have been nudged out by CEO Elon Musk or the company's board of directors, as there could have been some dissatisfaction with the company's financial direction over the last couple of quarters. Lowering its vehicle prices has increased Tesla's sales but significantly dented its margins and profits.
Tesla stock fell 4.4% last week versus the S&P 500 index's 0.3% decline.
2. Rivian beat Q2 estimates and raised 2023 production guidance
After the closing bell on Tuesday, premium EV maker Rivian Automotive (RIVN -0.49%) released second-quarter results that exceeded Wall Street's consensus estimates for both revenue and earnings. In addition, the company increased its annual production guidance to 52,000 total vehicles, up from 50,000.
In Q2, the maker of three EV models -- a pickup, an SUV, and a commercial delivery van for partner Amazon -- grew revenue 208% year over year to $1.12 billion. Wall Street was expecting revenue of $1 billion. Revenue growth was primarily driven by the 12,640 vehicles delivered in the quarter. That delivery number was up 59% from the first quarter.
Rivian's all-important quarterly production number also got a turbocharged boost. In Q2, the company manufactured 13,992 total vehicles, up 49% from the prior quarter.
Despite the revenue and earnings beats and the raised production outlook, investors sent shares of Rivian tumbling nearly 10% on Wednesday.
Why? Most likely because many investors are concerned about Rivian's cash-burn rate. Indeed, the company has a big cash pile -- about $10.2 billion -- but at the current quarterly burn rate of $1.62 billion, that cash would only last just over six quarters.
Rivian stock dropped 14.6% last week.
3. Ford and GM are hitting speed bumps in their EV initiatives
Legacy automaker giants Ford Motor (F -0.17%) and General Motors (GM 0.69%) are experiencing setbacks in their EV plans. Naturally, this is not good news for investors in those companies, but it's a positive for companies that already have several models of EVs on the market, such as Tesla and Rivian.
On Thursday, Ford moved back the launch of its all-electric Ford Explorer for the European market to the summer of 2024. The original rollout date was early 2024. This EV will be made in Germany on a Volkswagen platform.
Also on Thursday, Reuters reported that GM CFO Paul Jacobson said at an investor conference that the automaker is still having issues in producing its new Ultium battery packs, which is slowing its output of EVs. These batteries are being produced by the Ultium Cells joint venture between GM and South Korea-based LG Energy Solution at a factory in Ohio.
Ford and GM stocks were down 5.8% and 7.3%, respectively, last week.
