Why did Rivian stock rise in 2023, but Nio and Nikola stock prices fell?

Electric vehicle (EV) sales accelerated significantly in 2023 compared to 2022, but investor sentiment toward individual EV companies varied widely.slightly more than S&P50024% increase, Rivian (Riven -3.88%) As an example, the stock plunged 82% in 2022 before rebounding last year. Nioh (NIO -3.11%) and Nicola (NKLA -4.85%)However, they did not enjoy similar success, experiencing declines of 69% and 78%, respectively, in 2022.

Rivian stock rose 27% in 2023, while Nio stock fell 7% and Nikola stock fell 60%, according to data provided by S&P Global Market Intelligence.

The investors hitchhiked Rivian for a ride, but Nio and Nicola walked right past them.

Rivian extended the decline seen in 2022 through the first half of 2023, but the stock turned around over the summer. In early July, Rivian announced that its production volume for the second quarter of 2023 will be 13,992 units, an increase of 50% from the previous quarter.

The company also reaffirmed its outlook to produce 50,000 vehicles in 2023. A few months later, in November, Rivian announced financial results for the third quarter of 2023, further increasing investor excitement. Rivian reported revenue of $1.34 billion and an adjusted loss per share of $1.19, beating analysts’ expectations for revenue of $1.31 billion and loss per share of $1.33.

Like Rivian, Nio’s stock price rose over the summer after the company announced plans to expand into the Netherlands and analysts announced bullish price targets. However, unlike Rivian, Nio’s stock price subsequently slumped and failed to recover.

The company disappointed investors in August with its second-quarter 2023 results. In addition to lower year-over-year vehicle deliveries, Nio reported lower revenue in the first quarter and compared to the same period in 2022. Investors slammed on the brakes again in September when the company announced plans to issue at least one new car. We’re $1 billion in debt to keep the lights on.

From the start of the year through August, Nikola investors had high hopes for the hydrogen stock, sending the stock soaring more than 57%. However, the rising stock price ran out of gas and a steep decline began, which would continue throughout the year.

On August 4, Nikola’s stock price slump began after lackluster 2023 Q2 results and the company’s announcement that it would appoint a new CEO. Shortly after, the tough summer days dealt an even bigger blow to the stock as the company revealed plans to issue $325 million in bonds. Nikola has further fed the bears and announced a recall for battery-powered vehicles.

The difficult road Nikola suffered in August continued into November, when Nikola reported lower earnings for the third quarter of 2023. Nikola reported an adjusted loss of $0.30 per share, beating analysts’ expectations of reporting a loss of $0.15 per share. It also revealed that the previously announced recall will cost the company approximately $62 million. A few weeks later, Nikola reported that it was once again tapping the bond market. This time, the plan was to issue $200 million in convertible bonds.

With 2023 in the rearview mirror, is now a good time to incorporate these EV stocks into your portfolio?

After Rivian’s impressive performance in 2023, EV-minded investors may be wondering if it’s too late to pick up the stock themselves. The company remains unprofitable, so traditional valuation metrics are useless. Nevertheless, the 2023 stock price rally won’t prevent investors from digging deeper into the company, as there are plenty of reasons to believe the stock price will continue to rise.

By changing lanes and focusing on Nio, investors could see the company’s underperformance in 2023 and into early 2024 potentially providing an opportunity to pick up an attractive growth stock at a lower price. We should recognize that there is. Of course, there are still potential holes in Nio stock, but those with a high tolerance for risk may want to consider including it in their portfolio.

Meanwhile, Nikola stock, which has entered penny stock territory, has too many red flags to be considered a buy. While the prospect of hydrogen cars may get some investors fired up, Nikola has been having some tough times lately, and it’s unclear whether the company will be able to turn things around in the near future.