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CAIRO / MOSCOW: The valuation of PIF-backed Saudi Arabian electric vehicle company Lucid rose to more than $ 91 billion last week, overtaking Ford and General Motors.
A recent stock rally added more than $ 17 billion to its valuation, up 24%, Bloomberg reported.
The share increase comes after Lucid’s announcement to produce 20,000 vehicles in 2022.
This has happened amid the growing demand for electric vehicles, as more and more consumers consider adopting the technology.
Previously, shares of US automaker Rivian had jumped 15%, topping Volkswagen’s market value, while Tesla gained 4.1%.
Rivian has become the third-largest automaker by market capitalization, according to Bloomberg. Its value has reached 150 billion dollars. These two companies, along with Tesla, are among the top 10 automakers by market capitalization.
Last Wednesday, Tesla, which is almost in a class of its own, took the lead with a market valuation of $ 1.06 trillion, significantly higher than that of second-placed Toyota, which had a market cap of 29.660 billion yen. (260 billion dollars). , according to data obtained from the Wall Street Journal.
Looking at their growth since the start of the year, Tesla’s stock price rose 49% to close at $ 1,089 on November 17, 2021, according to data from the New York Stock Exchange website.
Meanwhile, Lucid’s share has climbed over 400% year-to-date to $ 52.55.
Rivian, who was recently listed on the Nasdaq, saw its stock price drop from $ 100.7 on Nov. 10 to $ 146 a week later, according to the NYSE.
Another notable development for these companies, sales of electric vehicles will almost double next year to 5.6 million, according to calculations carried out by BloombergNEF in collaboration with the COP26 conference.
Looking at the debt ratios, Tesla and Lucid had much lower ratios compared to their traditional counterparts, as they stood at 0.3 and almost zero in the case of Lucid on September 30, 2021, respectively. Toyota and Volkswagen were more indebted than their indicators were respectively 0.97 and 1.45.
Meanwhile, US automakers General Motors and Ford had even higher values as they hit 1.81 and 3.94, respectively.
The debt ratio was calculated as the total of interest bearing liabilities divided by the total of shareholders’ equity.
As a result, these two electric vehicle makers do not have to rely as much on debt to secure their assets. When it comes to production levels, electric vehicle companies are also seeing significant improvements in their operations and deliveries. Tesla’s total production for the nine months of 2021 increased 89% year-over-year to 624,582 vehicles, according to the company’s latest quarterly report. This was more than double the comparable production level in 2019.
In addition, the number of deliveries trended more strongly, increasing by an annual rate of 97% in the first three quarters of 2021 to stand at 627,572 automobiles.
Tesla’s market share was also approaching 2% in Q3 2021 in the US and Canada, following a market share of around 1% between Q3 2019 and Q1 2020, according to a chart in the latest report. the company’s quarterly report on earnings.
Lucid is also experiencing a resumption of its operations. Bookings were over 13,000 at the end of the third quarter of this year, but rose further to exceed 17,000 on Nov. 15, 2021. The company also estimated that bookings exceeded $ 1.3 billion by the end of the 3rd. quarter, Lucid said. in a recent report.
The PIF-backed electric vehicle maker is also expected to expand its retail and service network in different regions to meet more globalized demand. The company aims to enter the Canadian market in the fourth quarter of this year, the European, Middle Eastern and African market in 2022, and the Chinese market by 2023, the company added in its report.
However, in terms of profitability, electric vehicle companies still have some catching up to do with other traditional automakers.
While Tesla’s net profit increased six-fold to $ 3.2 billion for the nine months of 2021 compared to the same period last year, it was still lower profit than the other market leaders.
Volkswagen’s after-tax profit for this period reached a much higher amount of 11.4 billion euros ($ 12.9 billion). In addition, General Motors’ net profit attributable to shareholders was $ 8.28 billion while Ford’s net profit was $ 5.7 billion.
Toyota, over a shorter period, achieved a higher net profit than Tesla, with net profit reaching 1,565 billion yen ($ 13.7 billion) in the six months ending September 30.
On the other hand, Lucid recorded a net loss of $ 1.53 billion for the nine months ending September 30, as it continued to expand its core business.
Additionally, Tesla had a very high estimate of its price-to-earnings ratio, PER, for 2021, valued at 265.61, which could mean the company is overvalued or investors are forecasting high growth for the company. Due to his losses, Lucid had a negative PER ratio of -30.03.
The traditional automakers surveyed by Arab News had much lower PERs. General Motors and Ford’s estimated values for 2021 were 9.89 and 10.85, respectively, while Toyota’s actual PER for 2021 was above 12.42.
The PER data was obtained from the Nasdaq website.
Therefore, it seems that electric vehicle companies are becoming more and more attractive to stock investors, as evidenced by the surge in their stock prices, but these are still relatively young companies that need time to reach the positions. profitability of their counterparts.