KEY POINTS

  • In September, Ford’s electric vehicle sales more than tripled the same month last year.
  • In the third quarter, Tesla produced 22,000 vehicles more than it was able to deliver.
  • Ford’s recent EV news bodes well for Lucid and other start-ups.

What’s going on with EV stocks

EV stocks soared yesterday after Ford (NYSE:F) announced its September sales in an update. This came just a day after Tesla (NASDAQ:TSLA) shared its full third-quarter production and delivery report. While some investors were disappointed with what Tesla revealed, the bulls took control Tuesday and pushed many electric vehicle maker stocks.

By the end of market hours, shares in Ford, Tesla and EV start-up Lucid Group (NASDAQ: LCID) had risen 7.7%, 2.9% and 9.3%, respectively. It’s worth noting that Tesla shares shot up more than 6% before the news came out yesterday relating to CEO Elon Musk’s Twitter (NASDAQ:TWTR) bid.

Why we care

In September, Ford reported that its EV sales nearly tripled year-over-year. The firm also mentioned that it now accounts for 7% of all EVs on the road. However, we should also note that Ford’s overall sales in September fell by almost 9% year over year. As a result, investors now view Ford less as a blue-chip firm and more as a potential Tesla opponent in the electric vehicle market.

What now

Tesla’s third-quarter shipments fell short of forecasts, but it wasn’t due to a manufacturing problem. Despite a 42% rise, Tesla disappointed investors with deliveries of just under 344,000 in the third quarter. However, it also manufactured an additional 22,000 cars that had yet to leave the factory.

While some investors took the halted production as an indication of weakening customer demand, company officials explained that it was due to issues with shipping logistics. With increasing volumes, Tesla is having more difficulty moving its product. This pause in production comes after building vehicles with existing orders. In other words, Tesla will deliver these cars this quarter. There should be no doubt about Tesla’s reasoning for halting assembly line work.

Ford’s announcement Tuesday regarding their EVs showed that consumer demand is still rising. Furthermore, sales of Ford’s hybrid vehicles have increased by 22.6% in the current year compared to last year. This has led investors to believe that Lucid’s data will be just as positive when it comes out.

Lucid Motors is targeting the high-end market with its electric Air sedans, which start at more than $87,000 for the base model. Investors have dropped its price by 60% this year after it reduced its production estimates multiple times. But there might be indications that eased supply chain disruptions are also resulting in those reductions seeing ease. Rivian Automotive (NASDAQ:RIVN), another early-stage EV manufacturer, cut its volume projections earlier in the year. However, they just announced that they are meeting production guidelines and are on track to meet its latest estimates.

Lucid hasn’t announced its quarterly results yet, so investor optimism may fluctuate. However, if Lucid can increase production as quickly as Ford, Rivian, and Tesla’s growth in manufacturing implied growing demand for EVs, its gains should also continue.

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