Why EV Stocks Tesla, Rivian, and Lucid All Fell Today

Electric vehicle (EV) stocks fell today after Tesla (NASDAQ: TSLA) and Rivian (NASDAQ: RIVN) both reported disappointing first-quarter delivery numbers.

It was the latest sign that demand for EVs continues to fade and that the sector’s stocks look broadly overvalued. Tesla is seen as a bellwether in the EV market as well, and other EV stocks tend to respond to Tesla-specific news.

Tesla and Rivian closed down around 5%; Lucid (NASDAQ: LCID) dropped 3.5%.

Image source: Tesla.

EV stocks hit the skids

The first quarter was one to forget for the EV industry based on Tesla’s numbers.

The industry leader said it produced 433,371 vehicles in the first quarter and delivered 386,810, meaning deliveries were down 8.5% from the quarter a year ago, which was its first year-over-year decline since 2020 and a clear sign of demand challenges. The gap between production and deliveries also shows that Tesla struggled to move inventory in the quarter.

The decline in deliveries wasn’t particularly surprising as Tesla had lowered prices a number of times over the last year, and CEO Elon Musk has complained about the impact of higher interest rates on car sales several times in recent months. In its fourth-quarter earnings report in January, the company gave vague production guidance for the year that indicated a significant slowdown in growth, but deliveries can still lag production if demand is weak.

Toward the end of the quarter, Tesla announced price hikes, which some analysts interpreted as a push to sell more vehicles before the end of the quarter. It also faced production challenges in the first quarter, including parts shortages because of attacks on ships in the Red Sea and the loss of power at its German plant due to an arson attack on the grid.

Rivian also underwhelmed with its first-quarter delivery report. The EV start-up, generally considered Tesla’s closest pure-play EV competitor, reported production of 13,980 vehicles and deliveries of 13,588. It also reaffirmed its production guidance of 57,000 vehicles this year.

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Those results missed production estimates…

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