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Why Shares of Rivian, Nio, and Fisker Raced Higher in December

Providing a gift to investors during the holiday season, electric vehicle stocks accelerated through the finish line of 2023 and ended notably higher than where they were at the end of November. From encouraging delivery figures to new partnerships, there was a variety of things that led investors to park Rivian (RIVN -4.04%), Nio (NIO -2.71%), and Fisker (FSR -2.01%) in their portfolios.

According to data provided by S&P Global Market Intelligence, Rivian’s shares skyrocketed 40%, while Nio and Fisker drove 25% and 11% higher, respectively.

A flurry of factors fed into the market’s feeding frenzy for these EV names

Early in December, Rivian shares jumped on the news that the company was preparing to manufacture a more simplified battery pack than its current standard battery pack structure. This new battery pack structure will reduce costs and could lead to a lower price tag for the company’s R1 vehicles — a development that could make the company’s products accessible to more customers. Also, Rivian’s CFO, Claire McDonough, addressed the company’s financials during Barclays‘ 2023 Global Automotive & Mobility Tech Conference, stating that the company would achieve profitability on a gross margin basis during 2024. Further food for the buying frenzy came some days later when Rivian announced a new deal with AT&T that will see the telecom company power its fleet with Rivian’s delivery vans and R1 vehicles beginning in early 2024.

After trading flat for the first couple of weeks of December, Nio shares spiked after the company announced on Dec. 18 that Cyvn Holdings, an Abu Dhabi-based investment group focused on innovative transportation, would make a $2.2 billion equity investment in Nio, intending to acquire 294 million shares at a purchase price of $7.50 per share. Nio subsequently reported on Dec. 27 that it had closed on the transaction with Cyvn Holdings.

With regards to Fisker, the catalyst for the stock’s rise last month was the company’s Dec. 29 update on its 2023 vehicle production. From the end of November through the end of trading on Dec. 28, shares had reversed more than 4%, but the company’s business update on the 29th had investors shifting gears. The company reported that in the fourth quarter of 2023, deliveries grew more than 300% on a quarter-over-quarter basis. Celebrating the news, investors sent the stock soaring 16% higher that day, and the stock continued strongly through the remaining days of December.

It may still be a good time to power your holdings with one of these EV stocks

During the first week of 2024, shares of Rivian have given back some of their gains from December after investors learned that the company’s fourth-quarter 2023 deliveries declined from the previous quarter. While this is disconcerting news, the decline in deliveries, in and of itself, shouldn’t deter investors who are considering buying shares of Rivian; however, they should certainly be mindful of their tolerance for risk before choosing to buy the stock.

Nio has also lost ground in the early days of 2024. Investors weren’t impressed with the company’s report on Monday that the company grew deliveries by 31% in 2023 compared to 2022. Plus, Goldman Sachs assigned an $8.40 price target on Nio stock this week, suggesting that there’s nominal upside to the stock. For several reasons, investors may want to think twice before adding Nio to their buy lists.

Similarly, Fisker stock has also fared poorly this week. Unlike Rivian, though, investors may want to be more judicious with Fisker stock as there are concerning issues regarding the company’s current situation.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Nio. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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