EV Start-Ups Are Getting More Orders. Why the Stocks Are Still Getting Bruised.

Fisker (ticker: FSR) has 50,000 reservations for its Ocean SUV, which will hit roads later this year, and 3,200 reservations for its Pear SUV, due out in 2024. The Ocean starts at under $40,000; the smaller Pear is selling for $30,000. By contrast, a Tesla Model Y costs about $63,000 in its base configuration.

And reservations are growing solidly at Lucid (LCID) and Rivian (RIVN), too. Lucid is taking reservations for its luxury Air. The price for the base model, Air Touring, starts at $107,400; the Air Dream Edition goes for $169,000. Rivian’s hot seller is the R1T pickup truck, which starts at $67,500.

The problem is investors just don’t care about reservations right now.

Shares of Fisker are down about 11% since the new reservations numbers came out. Rivian and Lucid are off, too—10% and 15%, respectively. Tesla (TSLA) stock is down about 10% as well.

The market is unequivocally to blame. The S&P 500 and Nasdaq Composite are down about 8% and 9%, respectively.

Inflation is the problem—and has been for a while. Higher inflation threatens automotive profit margins through higher costs. And higher interest rates, used to fight inflation, threaten new car demand. Most car buyers rely on financing.

And EV start-ups have been hit harder than most legacy auto stocks because investors, especially during inflationary times, don’t have much appetite for companies that don’t generate free cash flow and earnings.

Fisker is down is down about 46% this year and off about 64% from its November 52-week high of almost $24 a share. Tesla stock is down about 38% since the beginning of the year and down about 47% from its November 52-week high of $1,243.49 a share.

All the EV sector can do at this point is execute—and save as much cash as possible.

Write to Al Root at [email protected]