Electric car stocks took a tumble in noon (ET) trading Thursday, with Lucid Group(NASDAQ: LCID) falling 3.8%, Rivian Automotive(NASDAQ: RIVN) sliding 4.6%, and Polestar(NASDAQ: PSNY) doing worst of all -- down 7.4%, and trading at penny stock levels -- just $0.87 a share.
Another EV company entirely, though -- Tesla(NASDAQ: TSLA) -- may be the reason for EV investor dismay.
Tesla pulls its forecast
Every year, Tesla publishes an annual "impact report" describing its environmental, social, and governance, or ESG goals. Today's controversy concerns the first letter in the acronym -- the E. For the past couple of years, Tesla's 150-plus-page ESG report has stated that Tesla intends to produce 20 million electric cars by 2030.
The company just released its impact report for 2023, however, and this time, the "20 million EV" figure is nowhere to be found. As Bloomberg noted this morning, Tesla still says it will sell "as many Tesla products as possible." But the 20 million-car target just went poof.
What does this mean for Lucid, Rivian, and Polestar?
Tesla sold 1.8 million EVs worldwide last year. Getting to 20 million by 2030 -- a more than 10x increase in volume -- was always an ambitious target. And now Tesla seems to be eliminating the target entirely. That almost seems like a warning: EV demand is weakening, and selling 20 million electric cars within six years is no longer realistic.
If this is making investors in other EV stocks just a wee bit nervous, maybe they should be. After all, after growing rapidly during the pandemic, and 35% in 2023, the International Energy Agency forecasts global EV sales growth will fall by nearly half this year, to just 20%. Tesla is already laying off 10% of its workforce to compensate for weakening demand. Investors in rival automakers such as Rivian, Polestar, and Lucid may be worrying that their companies will be next.
Profitable and still growing, albeit slowly, Tesla can probably still ride out this storm. Unprofitable Rivian, Lucid, and Polestar stocks may not be so lucky.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
