Canoo, Inc. (NASDAQ: GOEV), Mullen Automotive, Inc. (NASDAQ: MULN), and BYD Company Limited (OTCMKTS: BYDDY) are electric vehicle (EV) manufacturers that have experienced news over the past two days that have significantly impacted their share prices. Let's take a look at exactly what happened so we can give some context to investors.
Walmart, Inc. (NYSE: WMT) announced on Tuesday morning that it had struck a deal with Canoo, Inc. to buy 4,500 electric vehicles as part of the retailer's goal to obtain net-zero emissions by 2040. Walmart also has an option to purchase an additional 10,000 units as its continues electrifying its fleet. This news sent Canoo's share price through the roof, climbing 53.16% at the close, although the company's share price is still down 55.24% from the start of the year.
The company forecasts starting production near the end of this year and expects to produce between 14,000 and 17,000 units in 2023. This is a significant increase from the 39 Gamma vehicles built to date and the guidance of 3,000-6,000 units to be built this year. By securing a big-name client, Canoo has improved its prestige and likely attracted the attention of other potential large clients looking to electrify their vast delivery fleets.
On Monday, Mullen Automotive signed an agreement with DelPack Logistics LLC, an Amazon (NASDAQ: AMZN) delivery service provider, to purchase up to 600 Mullen Class 2 EV cargo vans over the next 18 months. The first 300 of these can be delivered by November 30th according to the firm. DelPack is a leader in last-mile package delivery, which like Canoo's deal with Walmart, can add prestige and potentially new orders for Mullen Automotive. Upon announcement of the deal Mullen's share price was up 17.95%.
However, investors have already lost interest in the deal as the company's shares have since lost 9.02%. This follows a particularly tough first half of the year for Mullen Automotive which has seen its share price collapse by over 80%.
The company delivered its first electric van earlier this year to a Southern telecommunications company. It expects to begin large-scale production by Q3 2024. This shows that the company is further away from commercialization than its rivals, increasing the risk of it being left behind.
BYD's share price fell by 11% on Tuesday with the news that Warren Buffet's Berkshire Hathaway (NYSE: BRK.B) may cut its stake in the business. BYD shares registered with the Hong Kong stock market's clearing system rose on Monday, representing a size similar to the Berkshire holding. This prompted speculation that Berkshire is getting ready to sell and caused investors to offload their holdings before an announcement. However, unlike most EV stocks, BYD has seen its share price fall by only 0.95% this year, indicating stronger investor confidence in the automotive conglomerate.
BYD is the largest company on this list, with a market capitalization of $114 billion. The Chinese auto group made headlines earlier in the year by becoming the world's largest electric vehicle producer by sales. The company sold 641,000 vehicles in the first six months of the year, representing a 300% increase from the previous year. The company has become the Chinese EV champion and has set its sights on international expansion.
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