Electric vehicle (EV) stocks are jumping today as investors absorb bits of news Tesla (TSLA 3.68%) Shares rose as much as 6% and held a 3.6% gain as of 11:50 a.m. ET. Associate US-based EV manufacturers Rivian Automotive (RIVN 3.83%) And Lucid Group (LCID 10.29%) Also increase early trading. As of 11:50, Rivian was up 3% and Lucid was up 9.3%. Lucid shares have risen nearly 20% over the past five trading days after becoming one of the worst-performing stocks in 2022.
Both Lucid and Rivian are down more than 80% in 2022. Investors may be wondering if they have fallen far enough, and reports of a change in Rivian management today brought optimism that the company is addressing some of the problems that plagued its performance last year.
Tesla stock has also had a rough year in 2022, but the company is continuing its growth plans as it aims to fend off new competition. The increase includes plans to spend more than $775 million to expand its manufacturing facility in Texas, according to published reports. That planned investment is particularly encouraging for investors.
Tesla is still growing its plant near Austin, and new investment plans show it’s considering going even further. Investors have recently been concerned about slowing demand for Teslas and other EVs, but according to a Baron’s The report, citing documents filed with the Texas State Department of Licensing, says Tesla plans to add production capacity to its current 500,000-vehicle annual capacity. The facility is expected to build the Cybertruck, which Tesla said will begin production by 2023.
The report was also accompanied by news that Tesla is close to finalizing a deal to build an entirely new manufacturing plant in Indonesia. The plant could help the company grow its business in Asia, Africa and the Middle East. Lucid already plans its own facility in Saudi Arabia to serve the Middle East market. While the addition of competition from Tesla could be thought of as a negative development, it’s a good sign that enough market growth is expected for the EV leader to target that market.
Investors are concerned about the size of the global market and how quickly EVs will gain automotive market share. But supply chain issues have become a more pressing issue for all these automakers. Tesla CEO Elon Musk previously said that the ramp-up for the Texas plant as well as the new facility in Germany has been slowed by supply chain issues.
Rivan’s news today confirmed that it is replacing several executives, including the vice president in charge of parts procurement. Investors are apparently happy to see the start-up trying to address its areas of weakness. But more important for EV investors today is the confidence Tesla is showing with investing in long-term growth.
Howard Smith holds positions in Lucid Group and Tesla. The Motley Fool features and recommends Tesla. Motley Fool has a revealing policy.