Business

Shares of electric vehicle makers Rivian and Lucid fell Thursday after the companies reported stagnant production in their fourth-quarter earnings after the bell Wednesday.
Rivian shares sank about 25%, and Lucid’s stock dropped around 17%.
Rivian forecast it will make 57,000 vehicles in 2024, slightly less than the 57,232 vehicles it produced in 2023. Lucid said it expects to make 9,000 vehicles in 2024, more than the 8,428 vehicles it made in 2023.

A Rivian electric truck sits parked in front of a Rivian service center on August 08, 2023 in South San Francisco, California.
Justin Sullivan | Getty Images

Shares of electric vehicle makers Rivian and Lucid plummeted Thursday after the companies reported disappointing results and stagnant production in their fourth-quarter earnings after the bell Wednesday.
Rivian shares plunged about 25% and Lucid’s stock sank almost 17% on Thursday.

Rivian forecast it will make 57,000 vehicles in 2024, slightly less than the 57,232 vehicles the company produced last year. Lucid said it expects to make 9,000 vehicles in 2024, about 7% more than the 8,428 vehicles it made in 2023.
Rivian’s revenue of $1.32 billion for the quarter beat Wall Street estimates, but its net loss per share of $1.36 was worse than expected, according to a survey of analysts by LSEG, formerly known as Refinitiv. The company also announced Wednesday it would cut 10% of its workforce.
“Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates, which has negatively impacted demand,” Rivian CEO RJ Scaringe said on Wednesday’s earnings call.
Lucid reported lower-than-expected revenue of $157.2 million for the quarter, and its net loss of 30 cents per share was in line with estimates, according to analysts surveyed by LSEG.
Lucid CEO Peter Rawlinson said the macroeconomic environment and higher interest rates also affected the company. He said the company has had to learn to operate in new locations, such as Saudi Arabia, with different market dynamics.

Though companies have invested billions of dollars in EVs, sales have grown more slowly than expected. EVs made up 6.9% of sales heading into December, or roughly 976,560 units, up 1.7 percentage points compared with total sales in 2022. 
Rivian and Lucid make up a fraction of EV sales compared with the industry leader, Tesla. A Cox Automotive analysis found that Rivian accounted for just over 4% of EV sales in 2023, while Lucid made up 0.5%. Tesla controlled about 55% of the market.
Shares of Rivian have dropped about 40% in the past year and have fallen 85% from their initial public offering price of $78 a share in November 2021. Lucid’s stock is down about 70% in the past year and has dropped more than 75% from its IPO price of $14 a share in October 2021.
Rivian and Lucid weren’t the only EV producers Wall Street was watching Thursday.
Electric truck maker Nikola reported worse-than-expected revenue and a slightly better-than-expected loss per share in its earnings Thursday. The stock traded about flat Thursday, and has lost nearly all of its value since it hit an all-time high of $93.99 in June 2020.
— CNBC’s Michael Wayland contributed to this report. More

The nation’s millionaires and billionaires are evading more than $150 billion a year in taxes, according to the head of the Internal Revenue Service.
The IRS, with billions of dollars in new funding from Congress, has launched a sweeping crackdown on wealthy individuals, partnerships and large companies, Commissioner Danny Werfel told CNBC.
“We have to make investments to make sure that whether you’re a complicated filer who can afford to hire an army of lawyers and accountants, or a more simple filer who has one income and takes the standard deduction, the IRS is equally able to determine what’s owed,” he said.

The nation’s millionaires and billionaires are evading more than $150 billion a year in taxes, adding to growing government deficits and creating a “lack of fairness” in the tax system, according to the head of the Internal Revenue Service.
The IRS, with billions of dollars in new funding from Congress, has launched a sweeping crackdown on wealthy individuals, partnerships and large companies. In an exclusive interview with CNBC, IRS Commissioner Danny Werfel said the agency has launched several programs targeting taxpayers with the most complex returns to root out tax evasion and make sure every taxpayer contributes their fair share.

“When I look at what we call our tax gap, which is the amount of money owed versus what is paid for, millionaires and billionaires that either don’t file or [are] underreporting their income, that’s $150 billion of our tax gap,” Werfel said. “There is plenty of work to be done.”
Werfel said that a lack of funding at the IRS for years starved the agency of staff, technology and resources needed to fund audits — especially of the most complicated and sophisticated returns, which require more resources. Audits of taxpayers making more than $1 million a year fell by more than 80% over the last decade, while the number of taxpayers with income of $1 million jumped 50%, according to IRS statistics.

“For complex filings, it became increasingly difficult for us to determine what the balance due was,” he said. “So to ensure fairness, we have to make investments to make sure that whether you’re a complicated filer who can afford to hire an army of lawyers and accountants, or a more simple filer who has one income and takes the standard deduction, the IRS is equally able to determine what’s owed. And to us, that’s a fairer system.”
Some Republicans in Congress have ramped up their criticism of the IRS and its expanded enforcement efforts. They say the wave of new audits will burden small businesses with unnecessary bureaucracy and years of fruitless investigations and won’t raise the promised revenue.
The Inflation Reduction Act gave the IRS an $80 billion infusion, yet congressional Republicans won a deal last year to take $20 billion of the funding back. Now they’re pressing for further cuts.

The Treasury Department said last week it estimates greater IRS enforcement will result in an additional $561 billion in tax revenue between 2024 and 2034 — a higher projection than it had initially stated. The IRS says that for every extra dollar spent on enforcement, the agency raises about $6 in revenue.
The IRS is touting its early success with a program to collect unpaid taxes from millionaires. The agency identified 1,600 millionaire taxpayers who have failed to pay at least $250,000 each in assessed taxes. So far, the IRS has collected more than $480 million from the group “and we are still going,” Werfel said.

Danny Werfel, commissioner of the Internal Revenue Service (IRS), speaks after being ceremonially sworn in at the IRS headquarters in Washington, DC, US, on Tuesday, April 4, 2023. 
Ting Shen | Bloomberg | Getty Images

On Wednesday, the agency announced a program to audit owners of private jets, who may be using their planes for personal travel and not accounting for their trips or taxes properly. Werfel said the agency has started using public databases of private-jet flights and analytics tools to better identify tax returns with the highest likelihood of evasion. It is launching dozens of audits on companies and partnerships that own jets, which could then lead to audits of wealthy individuals.
Werfel said that for some companies and owners, the tax deduction from corporate jets can amount to “tens of millions of dollars.”
Another area that is potentially rife with evasion is limited partnerships, Werfel said, adding that many wealthy individuals have been shifting their income to the business entities to avoid income taxes.
“What we started to see was that certain taxpayers were claiming limited partnerships when it wasn’t fair,” he said. “They were basically shielding their income under the guise of a limited partnership.”
The IRS has launched the Large Partnership Compliance program, examining some of the largest and most complicated partnership returns. Werfel said the IRS has already opened examinations of 76 partnerships — including hedge funds, real estate investment partnerships and large law firms.
Werfel said the agency is using artificial intelligence as part of the program and others to better identify returns most likely to contain evasion or errors. Not only does AI help find evasion, it also helps avoid audits of taxpayers who are following the rules.
“Imagine all the audits are laid out before us on a table,” he said. “What AI does is it allows us to put on night vision goggles. What those night vision goggles allow us to do is be more precise in figuring out where the high risk [of evasion] is and where the low risk is, and that benefits everyone.”
Correction: The IRS has collected $480 million from a group of millionaire taxpayers who had failed to pay. An earlier version misstated the amount collected. More

Sales of previously owned homes rose in January, boosted by lower mortgage interest rates of November and December.
Inventory of homes for sale in January increased to 1.01 million units, up 3.1% from January 2023, but still at a low 3-month supply.
The median existing-home price for all housing types in January was $379,100, up 5.1% from a year earlier and an all-time high for the month of January.

A real estate agent walks into a home for sale in Lancaster, Ohio.
Ty Wright | Bloomberg | Getty Images

Sales of previously owned homes rose 3.1% in January to 4 million units on a seasonally adjusted annualized basis, according to the National Association of Realtors. Sales were down 1.7% year over year.
The count is based on closings, so the contracts were likely signed in November and December, when mortgage interest rates backed off their October high of 8%. By mid-December, the rates had hit a recent low of around 6.6%. Today they are back over 7%, according to Mortgage News Daily.

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said Lawrence Yun, chief economist at the NAR. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”
Inventory of homes for sale in January increased to 1.01 million units, up 3.1% from January 2023, but still at a low three-month supply. Six months is considered a balanced market between buyer and seller.
That dynamic is why the market is still seeing pressure on home prices. The median existing home price for all housing types in January was $379,100, up 5.1% from a year earlier and an all-time high for the month of January.
All four U.S. regions saw price increases, and 16% of homes were sold above list price.
“Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth,” Yun said.

The 32% all-cash share was up from 29% in both December and in January 2023. It’s also the highest level in nearly a decade — since June 2014.
First-time buyers made up just 28% of sales. Historically they make up about 40%, but a lack of lower-priced homes for sale is hitting them hardest.
While lower mortgage rates helped boost January sales, today’s higher rates are already once again weighing on the market. A separate report from Redfin showed new listings rose 10% year over year during the four weeks ended Feb. 18, the biggest increase in two months. Signed contracts, however, were down 7% from a year ago, according to the report.
Correction: The 32% all-cash share of January 2024 home sales was up from 29% in January 2023. An earlier version of this story misstated the comparison.
Don’t miss these stories from CNBC PRO: More

Listen to this story. Enjoy more audio and podcasts on More

Listen to this story. Enjoy more audio and podcasts on More

Listen to this story. Enjoy more audio and podcasts on More

Listen to this story. Enjoy more audio and podcasts on More

Listen to this story. Enjoy more audio and podcasts on More