Electric vehicle (EV) sales are rising. In 2021, 6.6 million EVs were sold worldwide, nearly double the sales in 2020. EV Volumes, a data base, estimates 2022 global EV sales at 10.6 million, up nearly 60% from 2021. More than 16.5 million electric cars and trucks were on the road in 2021.

Despite such encouraging growth in sales, EV makers' stocks have continued to falter in 2022. Let's see why that was so, and if the stocks look attractive for 2023 after the steep declines.

Top EV stocks fell steeply in 2022

U.S. stock markets have corrected significantly so far this year. The S&P 500 is down 17%, while the Nasdaq Composite has fallen more than 28% as of this writing. Since growth stocks typically trade at high multiples, they tend to fall harder during market corrections. This has certainly been true in 2022.   

TSLA data by YCharts..

While Tesla (NASDAQ: TSLA) stock has fallen 49%, Lucid (NASDAQ: LCID), Rivian (NASDAQ: RIVN), and Nio (NYSE: NIO) have fallen more than 60% year to date. And all four stocks have fallen far more from their all-time high prices; while Tesla stock has dropped more than 55% from its peak, the others are down more than 80% from theirs.

Is the correction justified, or is there a buying opportunity?

In early 2021, the valuations of EV stocks went through the roof thanks to the hype surrounding electric vehicles. As the broader markets corrected, EV stocks fell, too. And supply chain challenges have hurt the production of EV companies while raising their costs. But has the recent decline finally made these stocks attractive?

For sure, the EV story is just getting started. All these companies have a long growth runway as the transition from internal-combustion vehicles to EVs unfolds. While it is broadly accepted that this transition is inevitable, what isn't as clear is which players will thrive in the long run.

Tesla continues to post solid performance

Tesla's stock seems to have fallen to an attractive level. While it is difficult to determine whether it'll fall further in the short term, the stock is intriguing for several reasons. To begin with, its valuation is far more sensible than it has been in the past.

TSLA PS Ratio data by YCharts.

Tesla's price-to-sales ratio has fallen to 8.3 from around 30 in January 2021. Although it still looks high compared to traditional automakers, that's because Tesla is still growing fast. The company's revenue increased 56% year over year in the third quarter. And that isn't a one-off quarter; its growth over the years is impressive.

TSLA Revenue (TTM) data by YCharts. TTM = traling 12 months..

The above chart compares Tesla's revenue growth over the last three years with that of traditional automakers.

At the same time, its margins remain impressive.

TSLA profit margin (quarterly); data by YCharts.

Overall, Tesla appears to be on a solid footing to keep posting sustained growth in the coming years.

Nio's growth looks impressive

Chinese EV maker Nio expects substantial growth in vehicle deliveries in the fourth quarter and in 2023. Although the company is still incurring losses, it is increasing revenue rapidly, as the chart above shows. Its upcoming models and expansion plans in Europe can be key drivers in the coming years.

Lucid and Rivian look promising

Lucid and Rivian are still at very early stages of their growth compared to Tesla, but both look promising. Lucid managed to establish itself as a serious player by delivering the longest range for its first model, the Lucid Air. The company, which started deliveries at the end of October 2021, has delivered roughly 2,500 cars in a year. It targets producing 6,000 to 7,000 cars in 2022.

After launching the Sapphire, Pure, and Grand Touring variations of the Lucid Air, the company now plans to open registrations for its first SUV, the Gravity, in early 2023. Its focus on the less-tapped Saudi market could help it drive significant growth.

After starting deliveries in September 2021, Rivian has already produced more than 15,000 vehicles. And it has a backlog of more than 114,000 units of its R1, including both SUVs and pickup trucks. It has an attractive order backlog, too: 100,000 delivery vans from Amazon. What's more, it has enough cash to fund its operations through 2025.

Both Lucid and Rivian are at early stages of their growth and are incurring losses. As young EV makers, they are more affected by the supply chain issues that the industry is facing than are the established players. Both companies look promising, but investors should note that these stocks are riskier compared to those of legacy automakers or Tesla.

But they have corrected drastically and, if successful, could generate windfall returns for long-term investors. In short, all four stocks look like attractive buys for 2023.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Down more than 50% from their highs, are Tesla and these other EV stocks buys for 2023? appeared first on The Motley Fool Australia.

What happened

So what

Now what

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla shares jumped today appeared first on The Motley Fool Australia.

What happened 

Shares of electric-vehicle (EV) stocks were sinking today after a new report showed that Tesla's (NASDAQ: TSLA) vehicle deliveries in China tumbled 64% in July. Nio (NYSE: NIO) -- which is based in China -- may be reacting negatively to that news, along with new data that showed the company continues to lag behind its rival in China.

Additionally, Lucid Group (NASDAQ: LCID) may be losing some ground after Ford announced today that it's raising the price of its F-150 Lightning pickup truck due to rising material costs. 

In the nascent EV industry, any dramatic news for one automaker can often affect the share price of other automotive companies, which appears to be the case today. As a result, Tesla was down 2.2%, Nio had fallen 4.6%, and Lucid was down 6.6% at the end of the trading day. 

So what 

News data released today by the China Passenger Car Association (CPCA) showed that Tesla's July vehicle deliveries were 28,217, down significantly from 77,938 in June.  

Lucid investors are already on edge right now after the company had to raise its own vehicle prices beginning in June due to rising costs. Additionally, just last week, the company slashed its production guidance for the full year. Lucid now estimates it will produce between 6,000 to 7,000 vehicles this year, down from the previous guidance range of 12,000 to 14,000. 

While the CPCA didn't mention why Tesla's China sales fell, Tesla had been working on upgrading the plant during the month in order to boost production, according to Bloomberg. This could eventually help production increase by 33%. That didn't seem to appease Tesla investors though, who aren't ready to hear about any production delays in China after they'd seen lengthy shutdowns of Tesla's Shanghai factory due to China's strict zero-Covid policy. 

Nio investors appeared a bit jittery about the news, as well, but they may have been focusing on other CPCA data showing that rival BYD remains the uncontested EV leader in the country. BYD delivered 163,042 cars in July, while Nio delivered just 10,052.  

Finally, Lucid's shares were likely reacting to the fact that Ford raised the price for its all-electric F-150 Lightning because of "significant material cost increases and other factors." The price bump means that customers will pay between $6,000 to $8,500 more for the truck, depending on the model.

With another EV maker raising its prices, Lucid investors are likely taking this as a cue that the broader EV industry is feeling the effects of rising inflation and higher material costs. 

Now what 

EV investors have been on a rollercoaster ride lately after the Senate passed the Inflation Reduction Act. The new bill, which could be passed by the House and signed by President Biden as early as this week, provides expanded tax credits for both new and used EV purchases. 

While that news gave some EV stocks a temporary lift, today's drop shows just how volatile these stocks are right now as investors try to assess the impact of inflation and rising material costs for the industry. All of this means that Tesla, Nio, and Lucid investors can likely expect more share-price swings in the near term.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Tesla share price sank today appeared first on The Motley Fool Australia.