Tesla, Ford, GM report hefty deliveries; shareholders vs. Rivian: This week in EVs

Investing.com — Here is your weekly Pro Recap of the past week’s biggest headlines in the electric vehicle space: EV delivery numbers from Tesla, Ford, and more; GM apprehensive on EPA’s emissions crunch; and a lawsuit against Rivian.

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EV giants rev up production

Several automotive companies issued their 2Q production and delivery numbers last week.

Tesla (NASDAQ:) reported another quarterly record with an almost 9% increase in production to 479,700 vehicles and a 10% growth in deliveries to 466,140 vehicles for the second quarter compared with the first three months of the year. According to the China Passenger Car Association (CPCA), the EV giant sold 93,680 vehicles in China during June, up 18.72% on the year.

The Texas-based company’s strong sales in China were the second-largest there behind China-based challenger BYD (SZ:) (OTC:) – which itself sold more than 250,000 EVs in June, marking a surge of 88.16% year over year, according to the CPCA.

Li Auto Inc (NASDAQ:), a Chinese startup, achieved a significant milestone in June 2023 by delivering over 32,575 vehicles, surpassing the 30,000 monthly delivery mark for the first time. This achievement reflects a growth rate of 150.1% as compared with the previous year. Notably, the company’s second-quarter deliveries reached an impressive 86,533 vehicles, showcasing a year-over-year increase of 201.6%. These outstanding figures have already exceeded Li Auto’s total vehicle deliveries for the entirety of 2022.

Rival EV startup Nio (NYSE:) delivered 10,707 vehicles in June – a 17.4% drop from the same time last year, but a significant 74% increase from numbers reported in May. That brought its 2Q total to 23,520 vehicles.

Xpeng Inc (NYSE:), a Chinese automaker headquartered in Guangzhou, Guangdong with offices in California, reported 8,620 EVs delivered in June, bringing their 2Q total to 23,205 units, representing a quarter-over-quarter increase of 27%. As of June 30, 2023, Xpeng has delivered over 300,000 EVs.

Back in the U.S., Ford (NYSE:) maintained a top spot with the help of their combustion engine trucks. The Detroit-based company’s electric vehicle sales also continue to grow. According to Ford’s release, EV sales dropped 2.8% compared with last year, but were up 11.9% year to date at 25,709 units. Its EV model Mustang Mach-E suffered from factory disruptions, with the vehicle’s sales reportedly sinking 21.1% in the second quarter to 8,633 (down 20.6% year to date). However, following the retooling of its plant in Cuautitlán Izcalli, Mach-E sales jumped in June, indicating potential growth for third quarter.

“Our EV sales continue to grow,” said Andrew Frick, vice president, sales distribution, and trucks. “Improved Mustang Mach-E inventory flow began to hit at the end of Q2 following the retooling of our plant earlier this year, which helped Mustang Mach-E sales climb 110% in June.”

General Motors (NYSE:) reported a 19% year-over-year sales gain Wednesday, and dominated the U.S. auto industry in sales for the first half with 1.3 million vehicles sold. The automaker reported selling 36,322 electric vehicles, 33,659 of which were Bolt and Bolt EUV vehicles.

GM’s EV revolution meets red tape

GM has dominated the U.S. auto sales market, but the company may also have to contend with U.S. regulators. The company announced Wednesday that it could face compliance challenges under the Environmental Protection Agency’s (EPA) proposed vehicle emissions rules and other state and federal regulations.

According to comments submitted to the EPA by GM, there are six state and federal regulations that “could require each automaker to exceed 50% EVs in at least a dozen vehicle averaging sets in the approximate 2030 timeframe.”

GM said it is “concerned that either a potential lack of clarity or a lack of coordination across the agencies may hinder an automaker’s ability to remain in compliance, year after year, across each of these regulatory programs even while meeting EPA’s overall EV targets.”

The Detroit automaker, which pledged in 2021 to halt the sale of new gasoline-powered vehicles by 2035, said Wednesday that it is confident “in its approach to transition to 50% EVs by 2030, and towards 100% in 2035, but our ability to meet such precise EV shares in every applicable averaging set in each model year is less clear.”

The EPA said in April the proposed reduction targets for the period 2027-2032 are projected to cut emission by 56% compared with the existing 2026 requirements, or 13% annual average pollution cuts. The EPA further estimates that by 2030, approximately 60% of newly manufactured vehicles will be electric and that, by 2032, this number will rise to 67%.

Rivian’s shocking price saga

Rivian (NASDAQ:), another American EV startup, was told Monday that they would have to face a lawsuit brought by Sjunde AP-Fonden, on behalf of shareholders from Nov. 10, 2021 to March 10, 2022.

The suit alleges that the electric automaker purposely underpriced its electric vehicles, leading to unpopular price hikes in order for it to stay afloat.

U.S. District Judge Josephine Staton indicated that shareholders can attempt to demonstrate that Rivian, despite being unprofitable, had foreknowledge of the need to raise prices on its R1S SUV and R1T pickup truck due to higher materials costs.

Following Rivian’s decision to increase the price of the R1S and R1T on March 1, 2022, the company experienced a 39% decline in its share price over a span of 10 days. This move triggered dissatisfaction among customers, who expressed their frustration on social media and other platforms. Two days later, Rivian reversed its decision and announced that customers who had pre-ordered vehicles prior to March 1 would not be subjected to the higher prices.

In her July 3 decision, Judge Staton called the alleged higher costs a “major obstacle to profitability unique to Rivian,” not merely a “garden-variety” problem.

“The inference that Rivian senior executives knew that the [bill of materials] cost for each R1 EV exceeded its retail price by approximately $40,000 leading up to the IPO is far more plausible than the inference that those executives were in the dark about the issue,” Staton added.