Electric-vehicle shares finished the week ending on May 31 on a mixed note, with market leader Tesla, Inc. (NASDAQ:TSLA) recording modest losses. The lackluster market mood amid the release of some weak economic readings contributed to some of the weakness.
Here are the key events that happened in the EV space during the week:
Tesla Gears Up For Shareholder Meeting: The question of “will” or “won’t” continued to dominate media discussions and social media chatter as Tesla fans worried about the proposal to approve Elon Musk’s 2018 compensation plan potentially failing. The widespread fear is that Musk could lose interest in running Tesla if the pay plan is shot down.
While analysts and legal experts discuss about propriety of the proposal, two proxy advisory firms, namely Glass Lewis and ISS, recommended that shareholders vote down the proposal. Taking aim at Glass Lewis, Tesla said in a letter that the firm omitted “key considerations, uses faulty logic, and relies on speculation and hypotheticals,” while making its recommendation.
The EV maker also impressed upon shareholders the need to ratify the plan. In a letter to shareholders released this week, it said, “Tesla believes it should abide by its commitment to Elon as Elon delivered on this commitment to Tesla. A deal is a deal. That is the fair and ethical thing to do.”
Separately, Tesla announced a recall of over 125,000 of its EVs in the U.S. due to issues with the deployment of seat belt warnings. The company said it will deploy a software update at no cost to customers, beginning in June.
Rivian On Track For Weak Q2: Speaking at the annual Bernstein Strategic Decisions Conference, Rivian Automotive, Inc. (NASDAQ:RIVN) CEO R.J. Scaringe mentioned that the second quarter is expected to be “messy” due to the shutdown of the Normal, Illinois plant for about a month. This shutdown will facilitate the introduction of new suppliers and processes aimed at reducing costs for R1 vehicles. Only a relatively small number of revised R1 models with the lower cost structure will go on sale in the quarter, he said, according to Automotive News.
Scaringe, however, said that following the EV adoption slowdown, he sees stronger growth with the introduction of new models in coming years, such as Rivian’s own R2 crossover launching in 2026.
See Also: Best Electric Vehicle Stocks
Fisker Wields Axe: Cash-strapped EV maker Fisker, Inc. (OTC:FSRN), which is fighting to stave off a bankruptcy filing, reportedly cut jobs as a resuscitation measure to stay alive. In a recent round of layoffs, the company announced at an all-hands meeting on Wednesday that hundreds of jobs would be eliminated, TechCrunch reported.
CEO Henrik Fisker reportedly informed employees that the company’s major investor, to whom they owe money, and the chief restructuring officer, representing this investor, are pushing for further job cuts. The report said, citing one current and one laid-off employee, that only about 150 people remain at the company. Ever since the EV market’s slowdown and a difficult production ramp-up, the company has announced several rounds of layoffs.
Faraday Future Sinks: Shares of Faraday Future Intelligent Electric, Inc. (NASDAQ:FFIE), which assumed meme status and soared amid the most recent brief meme mania seen in mid-May, fell sharply this week. The company had not-so-positive news for its investors. First-quarter revenue notably missed expectations, and the company sold only four of its FF 91 Futurist EVs since production began in March 2023, with an additional six leased. It attributed this to “current inclement market conditions” and withdrew its 2024 production guidance.
The company also communicated the receipt of a letter from Nasdaq, which warned of a potential delisting for the delay in the filing of its first-quarter report.
Lucid’s UAE Expansion: Lucid Group, Inc. (NASDAQ:LCID) has expanded into the United Arab Emirates with the opening of its latest retail location in Dubai. The Dubai Studio is Lucid’s second retail space in the Middle East, it said.
“The region continues to build momentum in its shift towards sustainable energy, emerging as a key market in EV ownership,” said Faisal Sultan, vice president and managing director of the company’s Middle East operations.
“With our studios in Riyadh and now in Dubai, we look forward to providing drivers in the Middle East and its surrounding areas with the innovative and dynamic experience of the award-winning Lucid Air.”
The KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) ended Friday’s session down 0.77% at $21.26, according to Benzinga Pro data. For the week, the ETF was unchanged.
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