Friday promises to be a busy day for investors electric vehicleswith Rivian Automobile (RIVN 5.37%) And Lucide Group (LCID -0.45%) both having declared their income last night, and Tesla (TSLA 8.19%) title reacting to news from its competitors.

Earlier in the day, Lucid stock was up 6%, although around noon ET it was negative that day. Similarly, Rivian was up 4.8% earlier, but had fallen to a 0.80% gain. Surprisingly, Tesla stock – the only one of the three to have done so not reported earnings last night – up 6.7% as its market capitalization crossed the $1 trillion mark for the first time since 2022.

Rivian Third Quarter Results

Perhaps Rivian’s intraday decline shouldn’t come as such a surprise, given the company’s poor performance during the quarter.

In the third quarter, Rivian reported just $874 million in quarterly sales, which was below Wall Street expectations, and a 35% year-over-year decline – not very promising for a supposed growth stocks. Worse yet, Rivian’s “profits” for the quarter looked a lot more like losses. Analysts were forecasting a loss of $0.92 per share for the electric truck maker, but Rivian managed to underperform even that pessimistic prognosis, losing $1.44.

Now the good news is that Rivian CEO RJ Scaringe says his company is still on track to generate positive gross profit for the fourth quarter of 2024 and hopes to increase revenue per unit sold in the fourth quarter, while reducing the cost of these units. The bad news is that Rivian wants to increase its revenue per unit by charging more for those units (i.e. electric trucks and SUVs). And raising prices in a market where electric vehicles are already struggling to win sales may not be the best strategy to spur growth.

At the same time, Rivian says it will depend on the sale of regulatory credits to provide the remainder of its revenue per unit increase. This could work in the fourth quarter, in the final days of the Biden administration. This may be less likely to work in the future, under a Trump administration that has promised to “cancel all unspent funds” from the Inflation Reduction Act, perhaps including funds intended to pay for tax credits on sales of electric vehicles.

Long story short, Rivian’s revenue is declining and its revenue growth plans in Q4 and beyond look uncertain. If we further consider that cash burn in the first three quarters of 2024 reached $4.5 billion, implying that the full year negative free cash flow of $6 billion, things aren’t looking great for this Tesla competitor right now.

Clear third quarter results

Moving on to Lucid, the news is a little better.

Third-quarter sales totaled $200 million at the luxury electric car maker, up 45% year-over-year. Lucid also reported that it delivered 1,805 electric vehicles in the third quarter, which is significantly fewer automobiles than the 2,781 electric vehicles Lucid delivered during the quarter. This suggests relatively stronger demand for Lucid’s electric vehicles, and the fact that the company produces fewer cars than it sells means that Lucid should not face inventory buildup issues that l ‘would require cutting prices and sacrificing profit margins in order to move the metal. .

That being said, Lucid’s 45% revenue improvement doesn’t compare well to the 91% increase in cars delivered, implying that some price decline may have already taken place, that consumers favor the less expensive Lucid models – or both. It’s also worth pointing out that despite growing revenue and unit sales, Lucid failed to turn a profit in the third quarter. On the contrary, the company’s loss of $0.41 per share increased by 46% year-over-year.

I don’t want to belabor this, but it’s always the case with Lucid: the more cars Lucid sells, the more money Lucid loses.

Finally, a word about Tesla

So what does all of the above imply for Tesla stock? Well, according to the latest report, Tesla’s year-to-date sales are only up 0.5% compared to the same period last year. That’s not as fast as Lucid’s sales growth, but it’s much better than Rivian’s sales. decline.

Tesla’s profits are also down year-to-date – almost exactly a third less than a year ago, at $4.8 billion earned in the first three quarters of the year (i.e. $1.38 per share). On the other hand, these benefits are at least positive, which is more than Rivian or Lucid can say. And unlike its competitors, Tesla is positive free cash flow, generating $1.5 billion in cash profits so far this year. That may not be as good as the $2.3 billion Tesla generated in the first three quarters of 2023, but it’s still much better than its rivals, illustrating the benefits Tesla continues to reap for being the first to build electric cars for the general public. walk.

With a P/E ratio around 75 and a price/free cash flow ratio of 265, I won’t advise anyone to buy Tesla stock anytime soon. But if you absolutely and positively think that you must invest in an electric car manufacturer, I can think of much worse alternatives – and their names are Rivian and Lucid.