Why Rivian, Lucid, and Nio Are Sinking Today

The market has been building momentum with a risk-off mentality over the past several trading days. Electric vehicle (EV) start-ups are near the top of the risk spectrum, and several stocks are plunging accordingly. Rivian Automotive (NASDAQ: RIVN) and Lucid Group (NASDAQ: LCID) are two domestic producers that were down 5.9% and 9%, respectively, as of 10:45 a.m. ET. China-based Nio (NYSE: NIO) was also deeply in the red, down 10.8%.

While the macro environment is the driving force for today's drops, it only highlights the underlying risks associated with investing in these names. Rivian and Lucid have only been in commercial production for about six months, and both have faced headwinds from supply chain challenges and rising raw material costs. While Nio doesn't quite qualify as a start-up with more than 200,000 cumulative deliveries, it also has faced those challenges and more, due to recent COVID-19 lockdowns in major Chinese cities.

The good news for these companies and investors is they are all in good financial shape to weather the current economic storm. As of March 31, 2022, each had a significant amount of cash on its balance sheet.

Source Fool.com