This week in EVs: Tesla's sky-high costs; Rivian slapped with lawsuit | Pro Recap

Published 04/30/2023, 04:04 AM
Updated 04/30/2023, 05:30 AM
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- -- Here is your weekly Pro Recap of the past week's biggest headlines in the electric vehicle space: Tesla’s lofty capex and labor law violations; the end of the Chevy Bolt at GM; a muddy lawsuit for Rivian; layoffs at Stellantis; and Mullen's probe into "improper trading" in its shares.

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Tesla: You gotta spend money to make money

Shares of Tesla (NASDAQ:TSLA) fell over 3.5% in early trading Monday morning after the electric automaker said it had raised its capital expenditure forecast to between $7 billion and $9 billion this year, higher than its previous outlook of $6 billion to $8 billion.

CEO Elon Musk has set a goal for Tesla to sell 20 million EVs in 2030, and the company is ramping up output at its factories in Berlin and Austin. It also has plans to open a gigafactory in Mexico as it pushes to expand global output.

Part of Tesla’s expansion goal involves exporting the Model Y from Shanghai to Canada, as the company announced over the weekend.

In Canada, the new version of the Model Y - and the more expensive long-range variant - both qualify for incentives of C$5,000 on purchase or a four-year lease, per a recent update to the Canadian government's website.

Labor law violations at a Tesla service center

On the downside, on Tuesday supervisors at Tesla’s Florida service center were found guilty of violating labor laws, according to reports.

In 2021, the Orlando repair shop's management illegally silenced workers after some of them complained that new hires were being paid more, a U.S. labor board found.

Tesla was ordered to cease and desist from violating workers' rights, and to post a notice of the violations in the service center and email it to employees.

TSLA shares ended trading on Friday at $164.31. Almost even on a rollercoaster week that saw a harsh 4.76% drop on Wednesday.

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Things get muddy at Rivian

Tesla EV rival, Rivian (NASDAQ:RIVN), also found itself in hot water this week: The company is being sued by a Georgia resident claiming muddy runoff from the construction site of Rivian’s future factory has choked streams and ponds downstream in violation of federal environmental law, per a lawsuit filed in federal court this past week.

The filing presents another potential legal hurdle for the EV startup.

The Georgia resident said, “I do not have a problem with electric vehicles or economic development in appropriate places if done in a good way. However, Rivian and the contractors working on this project have shown disregard for the environment of our rural area, including our fields, forests, and streams.”

Despite these developments, shares added some 4% for the week.

Mullen concerned about concerns

Elsewhere in the EV space, on Friday Mullen (NASDAQ:MULN) told shareholders that it will undertake a comprehensive analysis to tackle potential market manipulation and illegal short selling in its shares.

The move, for which Mullen is tapping outside council and Shareholder Intelligence Services LLC, addresses shareholder concerns regarding the automaker’s extraordinary trading volume and evidence of unusually high levels of failure to deliver on short sales, as reported to the U.S. Securities and Exchange Commission.

“As a fiduciary to its shareholders, the Company will do everything in its power to address any evidence of improper trading in Mullen securities," said Mullen in the press release, which InvestingPro subscribers got in real-time.

Shares of MULN ended trading Friday at $0.0769. Down 28.7% for the week.

GM bolts away

General Motors (NYSE:GM) announced the end of an era Tuesday, saying it will end production of its Chevrolet Bolt EV "at the very end of the year."

The Bolt, GM's first mass-market EV, still accounts for more than 90% of all U.S. GM EV sales.

The American automaker plans to invest $4 billion in its Orion Township Assembly plant, which is planned for production of its Chevrolet Silverado EV and electric GMC Sierra. GM said this facility, together with its Detroit-Hamtramck plant, will be able to build more than 600,000 electric trucks a year by late 2024.

CEO Mary Barra added that when the Orion plant reopens in 2024, and reaches full production, "employment will nearly triple."

Shares of GM ended trading Friday at $33.04. 3.65% off of its weekly high of $34.29 achieved on Monday.

Streamlining Stellantis

Finally, Stellantis (NYSE:STLA), said Wednesday that it is offering voluntary exit packages to 33,500 U.S. employees in an effort to streamline operations. The automaker did not say how many total jobs it is looking to eliminate. However, the offer covers 31,000 U.S. hourly workers and about 2,500 salaried workers.

Shawn Fain, president of the United Auto Workers union, called the move “a slap in the face to our members, their families, their communities and the American people who saved this company 15 years ago," during the country’s 2008 economic crisis.

Shares of STLA ended trading on Friday at $16.63. Up 1% for the week.

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