Ken Lucid, Chargepoint and Quantumscape jump over 20% this week


what happened

Electric vehicle (EV) stocks are rising this week. A composite of companies in the sector were up more than 20% for the week as of 2 PM ET on Thursday. EV manufacturers Lucid Group (LCID 5.08%) was up by 30%, network company charging Chargepoint Holdings (CHPT 3.67%) Last Friday’s closing price and was 24.1% higher than the solid-state battery maker Quantumscape (QS 3.81%) rose 32.1% for the week, according to data provided by S&P Global Market Intelligence.

so what

Many growth stocks rose this week as investors anticipated — and received — lower inflation data that raised hopes the Federal Reserve would slow or pause interest rate hikes. This helped these early-stage growth companies recoup some of the biggest losses in stocks in 2022.

Investors further discount potential future earnings when interest rates rise and the cost of borrowing is high. All these names need to continue to invest capital as they build their businesses. But there was also some positive news in the underlying business that helped boost share prices this week.

Overhead view of the Lucid Air electric sedan.

Image Source: Lucid Group.

what now

Lucid updated investors on its fourth-quarter and full-year vehicle production and distribution results Thursday morning. The stock moved higher on the news, but it also extended the uptrend the stock was already experiencing this week.

Lucid built about 3,500 of its Air sedans in the fourth quarter, bringing the total to 7,180 for the full year. That beats the company’s recent estimate of 6,000 to 7,000 cars produced in 2022. However, the company has lowered the bar by lowering that guidance twice this year

It was impressive, though, that the company increased production substantially in the fourth quarter, accounting for nearly half of its production for the full year. Investors will want to hear what management has to say about that progress, as well as whether customers are waiting for all the cars produced. The company noted that only 1,932 were delivered in the fourth quarter. It is important to know if this is just a timing issue with Transit or if Lucid is listing unsold vehicles. The latter would be a red flag for investors.

Both ChargePoint and QuantumScape are rising this week on a bounce from the stock’s earlier significant decline and helped by economic data that showed inflation is easing. Chargepoint also announced a new partnership late last week Mercedes-Benz That will add more than 400 charging hubs across North America It will include more than 2,500 Chargepoint DC fast charging ports in the US and Canada.

These stocks are evaluated by investors on where businesses are expected to be a few years from now. They will undoubtedly be restless along the way. That volatility this week has given investors some relief from last year’s poor results.

Howard Smith has positions at Chargepoint, Lucid Group and Quantumscape. Motley Fool has no position in any of the stocks mentioned. Motley Fool has a revealing policy.


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