George Soros has bet on the car industry.
The billionaire continues to invest in this sector, which is abandoning gas cars in favor of electric cars, and public policies in Europe in particular provide incentives towards green vehicles.
So he picked his winners and losers. First Soros bet on the upstart Rivian, the Chinese NIO (NIO)- Get a Free Report and, to a lesser extent, Lucid Group (LCDD)- Get a Free Report. But it seems he has changed his strategy, preferring to bet on the car manufacturers who have the resources to mass produce. This can be attributed to the changes he just made in his US equity portfolio in the third quarter.
The Democratic Party mega-donor increased his stake in Tesla and continued to buy Ford debt. In contrast, Soros continued to liquidate his Rivian shares. He only had 16.36 million Rivians (RIVN)- Get a Free Report shares as of Sept. 30, according to a regulatory filing.
That’s down 8.2% in the second quarter that ended June 30. The shares, which were worth $538.4 million on September 30, their value has melted away to $486 million, based on the Irvine, Calif.-based automaker’s last share price.
Rivian stock is down 71.4% this year.
Supply Chain Issues
The company is struggling to manage supply chain ramp-ups and disruptions. During the third quarter, the firm widened its losses, recording a net loss of $1.72 billion, against $1.23 billion in the third quarter of 2023.
“During the quarter, inflationary pressures impacted our cost of materials, which we believe will continue to impact our gross margin in the near future,” Rivian said in a letter to its shareholders.
The net order book shows 114,000 units apart from the 100,000 orders from its shareholder Amazon (AMZN)- Get a Free Report. The problem is knowing when Rivian will be able to deliver these vehicles.
A second shift has begun at its Normal, Illinois plant, but Rivian has not increased its target of producing 25,000 vehicles in 2022.
“Our main focus is still on ramp production,” the company said. “The production rates shown within our normal factories continue to give us confidence in our systems, our equipment, and the ability of our staff to ramp up our production lines. However, we believe that supply chain constraints will continue to be a limiting factor in our production. “
Rivian currently produces the R1S SUV commercial van, R1T pickup/truck and EDV.
Soros also remains negative on Lucid Group, another young rival of Tesla. The billionaire still has options for 400,000 Lucid shares. In other words, he believes that the stock price will go down in the short term.
Soros still invests in China’s NIO
On the other hand, the legendary investor maintains his investment in the Chinese electric vehicle maker NIO, which has two bonds, one with a face value of $115.32 million and the other with a face value of $25.33 million.
Stock market regulations require fund managers with more than $100 million in US equity to file a document, known as a 13F, within 45 days of the end of the quarter, to list their holdings in stocks traded on US exchanges.
The value of Soros’ US equity portfolio increased 4.3% quarter-over-quarter to nearly $5.9 billion. Soros Fund Management is a family office that manages public and private equity.
“SFM invests globally in a wide variety of strategies and asset classes, including public equities, fixed income, commodities, foreign exchange, alternative assets and private equity,” the firm says on its website.
Soros, whose net worth is estimated at $8.5 billion, up $1 billion, as of Nov. 22, according to the Bloomberg Billionaires Index, is well known for pouring money into philanthropic efforts. Most of his firm’s assets belong to the Open Society Foundations, which support “people around the world who work for justice, equity and free speech.”