Shares of electric-truck maker Rivian Automotive (RIVN 9.00%) plunged 33.2% in October, according to data from S&P Global Market Intelligence.

The company had actually entered the month amid some optimism. But a combination of events -- some unique to the company, and some within the electric vehicle sector -- conspired to lead to a terrible month for Rivian.

Like all loss-making companies, Rivian suffered along with the increases in long-term rates. But Rivian was especially hit as it raised money earlier than investors thought necessary.

Raising $1.5 billion in convertible notes

Things started well for Rivian during the month. On Oct. 2, the company reported deliveries of 15,564 cars in the third quarter, which was higher than the 14,000 or so analysts estimated. Also on that day, Rivian garnered an upgrade from analysts at Evercore ISI, which raised its price target on the company from $30 to $35 and upgraded the company's rating from hold to buy.

That was auspicious timing, as just two days later, Rivian announced an offering for $1.5 billion of green convertible bonds, while also issuing third-quarter revenue estimates. Rivian said it expected $1.29 billion to $1.33 billion in third-quarter revenue, which was about in line with what Wall Street had been expecting. So the fact that deliveries were above target, but with revenue likely to be in line, suggested Rivian may have discounted prices more than some had anticipated. That could also mean the EV market is in worse shape than thought.

Rivian wound up closing $1.725 billion in convertible bonds due in 2030, which bear a 3.625% interest rate with a conversion price of $23.29. That seems to be a pretty low conversion price, not much more above where the stock was at the time.

The fairly cheap-looking money-raise surprised some, given that Rivian still has $9.1 billion of cash on its balance sheet as of Sept. 30. Of course, that was down by $1.1 billion from the prior quarter, showing that Rivian is still burning a healthy amount of cash as it invests in technology and ramps up production. Rivian expects that $9.1 billion to last through 2025, according to the filing. But if that's the case, then why did it need to raise more capital? And did that imply that it wouldn't be profitable even more than two years from today?

When interest rates go up like as did in October, investors tend to become more skeptical, so it's no surprise Rivian's questionable raise caused its stock to fall.

Peers in the EV space suggest a slowdown

Of course, Rivian may have become cautious on its market, as many of its peers in the electric-vehicle space also reported slowdowns in EV sales in October. While electric vehicles are still growing, the rate of growth has slowed from about 50% last year to a projected 20% to 25% in 2023.

On Oct. 30, auto chip supplier On Semiconductor (ON 1.39%) gave weaker-than-expected guidance, and Japanese battery maker Panasonic also took down its full-year guidance. So Rivian was also hit toward the end of the month as well.

Electric vehicles are in a tough market because of higher interest rates and range anxiety. However, if interest rates moderate and technology improves, this might be an opportunity for long-term investors, as the EV market should still grow over time. But as Rivian is still burning lots of cash, it remains a high-risk stock.