Tuesday saw quite the highway pile-up with electric vehicle (EV) stocks. One caught in the middle of the collision was pickup and SUV maker Rivian Automotive (RIVN 6.10%), which saw its share price erode by more than 7% as part of the broad sell-off. Oftentimes, companies in a particular sector are unfairly punished when there's discouraging news with a peer. Perhaps that was the case with Rivian.
Fisker's bad news spread EV sector gloom
The immediate reason for Tuesday's deceleration in the EV sector was the news that Fisker's (FSRN -12.70%) chief accounting officer stepped down after a very brief tenure in the position. Most investors would be hard-pressed to identify the top accounting executive at any of their companies. However, recent developments in the EV world haven't provided much ground for optimism, and this one compounded the bearishness.
EV investors are gloomy these days for a number of reasons. The sales growth in such vehicles has been declining recently. That's alarming since the game has been to ramp up production as much as possible to meet strong demand.
Rather uncomfortably, concurrent in its third-quarter earnings announcement, Rivian upped its forecast for full-year 2023. More uncomfortably, this was the second time so far this year it did so. Investors worry that softening demand will lead to fleets of Rivian R1T pickups and R1S SUVs piling up in the factory, unsold and unwanted.
EV demand is still solid
There is some justification for this, although we need to bear in mind that EV sales growth is still robust compared to that for traditional internal combustion engine (ICE) vehicles. So it's probably not time for investors to push the panic button on Rivian just yet. However, both overall EV sales numbers and the company's production forecasts (and results) should be closely followed.
