EV Stocks Rally After the Midterms: Rivian Up 6%, Lucid Up 12% — While Tesla Falls

Rivian shares rose 6% in a market rally after Democrats swept the House and Senate in Tuesday’s midterms, with no news from the company. The S&P 500 rose 2% and the Nasdaq 2% on the morning after the vote, and investors bought EV stocks along with the market: Lucid jumped 12% and NIO rose 6%, while Tesla fell 2% on what Elon Musk’s election-night losses could mean for his companies.

Lucid’s jump had even less behind it than Rivian’s. The company delivered 3,806 vehicles in the third quarter, 6.7% fewer than a year earlier, after cutting production, and it reports results next week. NIO sells mostly in China and rose on a US election anyway. The moves were about the market, not the companies.

Rivian’s real test comes in December. Its cars still lost $80 million at the gross level last quarter, and it burned $1.12 billion of free cash flow. Management plans to exit the fourth quarter at an automotive gross profit, which results early next year will show — and Rivian needs positive gross margin to draw on its Department of Energy loan of up to about $4.5 billion.

The rally also came a day after UBS upgraded Rivian to buy on solid R2 demand, and as reports emerged that Uber could invest up to $1.25 billion in the company. For Lucid, the picture is harsher: it has burned $5.1 billion over the last 12 months, continues to report negative gross margins, and holds barely $760 million in cash. A one-day rally does not fix either balance sheet.