EVs Struggled in Earnings

A handful of EV stocks handed in their work today… and let’s just say, they probably wish they didn’t. 🤦

Lucid Group, Canoo, and Lordstown Motors all posted their latest quarterly results today, and all three companies trended lower after their reports.

Lucid fell –13.5% in afterhours, erasing its intraday gains and more after lowering its 2022 production target. Instead of delivering roughly 20,000 cars this year, the company now expects between 12,000 and 14,000 vehicles to roll off the supply line. Lucid faulted supply chain woes and logistics for the shortcoming.

Lordstown Motors, which has been embroiled in high-level management resignations and an ongoing DoJ probe, also realized downside after its report today. In a trend you’ll see throughout the EV space, Lordstown reported that it would only produce and sell up to 3,000 vehicles through next year, 500 this year (starting in Q3), and presumably the rest the year after? CNBC wrote about it if you want the deets…

Finally, a lesser-known EV company called Canoo also posted earnings today. The company recorded a wider loss in the quarter, prompting a -7% dip in extended trading today. The company only offered capital expenditures and operating expenses in its projections for the quarter ahead. This time last year, the company had $702 million in current assets. Today, it has $224 million. Oof.

In summary, starting an EV company is hard, and nobody knows that better than this trio of SPAC-turned-EV players. 🤷 Lucid might be better off than the other two, but Lucid is also evidence that this stuff is hard (if you have any qualms about the difficulty, just ask Tesla…)

Speaking of the EV giant, Tesla actually traded up today — but not necessarily at the expense of these names moving south. Rather, the company is expected to receive approval for its Gigafactory in Berlin this week. $TSLA gained +7.4% today.

To add to the wild geopolitical and global economic situation brewing, the U.S. Treasury just included crypto exchanges in its sanctions guidance, instructing exchanges to freeze Russian assets in crypto. Crypto climbed today…? 🤔

The Treasury’s regulations will prohibit anyone in the U.S. from supporting Russian individuals or its institutions with crypto in an effort to prevent Russia from escaping U.S. sanctions with cryptocurrencies. Specifically, the U.S. has asked for cooperation from Binance, FTX, Kraken, and Coinbase in its latest sanctions. Ukraine also asked several crypto exchanges to freeze individual crypto accounts, but both Kraken and Binance refused to cooperate. 

Binance commented on its refusal to cooperate with freezing individual Russian crypto accounts: 

“We are not going to unilaterally freeze millions of innocent users’ accounts. Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists. However, we are taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimizing impact to innocent users. Should the international community widen those sanctions further, we will apply those aggressively as well.” 

Ironically, the global cryptocurrency market cap rose 11.86% in the last 24 hours, which offers some indication that crypto traders are feeling bullish (or maybe Russian oligarchs are rushing to convert their wealth into USDC?) Bitcoin is up +11.1% and Ethereum gained +8.6%.

What’s causing the crypto boost? 💡 Despite efforts to sanction/regulate crypto transactions, some sources claim crypto’s rally today may be a direct effect of geopolitical tensions and sanctions — use of “uncensored money” may be up during the increase in financial regulation.