Investing

This EV Penny Stock Isn't Going to Make It

Austin Smith

Published: September 25, 2024 9:30 am

Last Updated: September 29, 2024 6:46 am

Key Points:

• EV Interest Drops: Fewer people are considering buying EVs this year.
• Lucid’s Big Losses: Lucid Motors lost $790 million in Q2, losing $330K per car sold.
• Small EV Companies at Risk: Lucid’s future is uncertain despite Saudi backing; Rivian has a slightly better outlook with car company support.
• Though EV companies have some struggles and challenges, investors have already identified “The Next Nvidia.” See what all the excitement is about by clicking here now.

Doug and Lee discuss the recent downturn in interest for electric vehicles (EVs) and the struggles of smaller EV companies like Lucid and Rivian. They highlight a report showing declining consumer interest in EVs, which spells trouble for companies already facing financial challenges. Lucid, for instance, lost $790 million in the second quarter, equating to $333,000 lost per car delivered. Despite backing from Saudi Arabia, there are doubts about Lucid’s (NASDAQ: LCID) long-term viability, especially with its stock price collapsing. Rivian (NASDAQ: RIVN) is also struggling, but at least has some support from established car companies. They predict that more news about these struggling EV companies will emerge soon.

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Edited Video Transcript:

Yesterday, a study came out from one of the big accounting firms that said the number of people who will consider buying an EV this year is down from what it was last year.

So that’s incredibly bad news.

So what’s the latest on some of these sort of eeny weeny EV companies?

You know, it’s staggering, you know, and, you know, people came back at us over the Rivian thing like, well, you know, yeah.

And Rivian got some promises for money.

But a lot of that promised money was based upon performance.

Yes, it was.

And, you know, it’s like, well, they got five billion. No, they didn’t.

You know, they did not get a five billion.

I did not keep rolling.

The thing that hit me the other day was when I saw this lucid.

Lost seven hundred and ninety million dollars in the second quarter.

And that was three hundred and thirty-three thousand for each unit that was delivered.

It’s worse.

Friends, they’re losing three hundred and thirty thousand dollars on each car they deliver.

And there’s some things that they were hyping when they came out and discussed all this and their batteries last longer and are cheaper.

You know, the question is though, you know, one of the biggest owners of Lucid and backers is that Saudi sovereign fund.

Yeah.

Yeah. It really is.

And the thing is though, there’s a point when even the Saudis are going to say, uh, I can’t continue to put money into this.

And, you know, they’re working on a smaller SUV, but that’s not going to be out until twenty twenty-six.

Are they going to make it?

Are they going to make it without staggering bad numbers? That’s not going to happen.

Also, here’s this is great irony.

So you’re Saudi Arabia.

Yeah, you’re really the kings of all oil, but you’re backing an EV company.

So I’d like to fly over there and ask them, you know, what’s the thought? Is it a hedge?

I’ll buy a tiny EV company, tiny.

And that’s my hedge. And the EV market explodes and ruins my oil business.

They’re better off investing in pro golf.

I know.

You know, it really seems as though unless they can get continuously, you know, flow of funds from the Saudis or whoever else that they could be doomed.

Because again, they only delivered a total and they only delivered a total of six thousand cars in twenty twenty-three.

Six thousand.

Yeah. No, listen, the company isn’t going to make it.

A couple of these others aren’t going to make it.

I just think if you’re if you’re an investor, you’ve got to ask yourself why in the world would you put a dime into these companies?

Well, at least with Rivian, they’re getting some back financial backing from a car company.

And if nothing else down the road, you know, if, if it falls apart, Volkswagen said, well, we can, we can move their technology and their things that we’ve acquired into our, you know, wide, you know, variety of vehicles like Porsche and all the other things they own.

So I can maybe see them making it, maybe.

But Lucid, if you’re losing almost eight hundred million a quarter and selling four thousand cars a year, that doesn’t sound like a winning hand to me.

It doesn’t at all.

There’ll be news about one of these small electric car companies soon enough.

So we don’t have to, we’ll be back to this soon because every few weeks, one of them raises ten bucks or the stock drops ninety or whatever it is.

So we’ll be back to this probably in at least maybe a couple of weeks.

Yeah.

And Lucid’s just absolutely collapsed. It’s three dollars.

You know, it’s a penny stock.

It is.

It’s literally a penny stock.

And the thing is, I was just staggering, you know, looking at these numbers.

Hey, their engineering data is good and all of this is good.

And it’s like it’s so great.

Then why are you selling all six thousand cars a year?

Why is that even happening and losing eight hundred million a quarter?

You know, I can do the math and that that adds up pretty fast.

It does.

We’ll be back to this.

Yeah, we will.