What Rivian, Lucid and Fisker tell us about the current state of electric vehicles

It’s earnings season and anyone invested in the idea that electric vehicles are the future of transportation is all about Tesla. But Elon Musk’s company is not the only one placing all its bets on battery electric vehicles. Three other so-called “pure EV plays” — Rivian, Lucid Motors and Fisker — also reported earnings this week. And crunching the numbers reveals some worrying trends.

For years, it was assumed that Tesla, like the dozen or so other pure EV companies it helped create, would outperform legacy automakers thanks to its laser-like focus on electric powertrains and battery manufacturing. But today, it’s legacy automakers that are posting healthy profits, while pure electric vehicle companies are stumbling.

Price cuts, politics and the stubborn belief that EV charging is still too difficult are holding many people back. And Tesla’s imitators take it by the hair. Rivian, Lucid and Fisker appear to be in various stages of emergency. Let’s start with the most vulnerable and go from there.

Henrik Fisker’s second attempt at building a car company from scratch appears to be on the same downward trajectory as his first.

The latest news comes not from the company itself, but from the contract manufacturer that makes Fisker’s only model, the Fisker Ocean SUV. The contractor, Magna International, reported earnings this week in which it essentially wiped its hands off Fisker by declaring it would no longer do ocean work for the struggling company.

“Our current outlook does not assume further production of the Fisker Ocean,” says Magna. Moreover, the company faces $75 million in losses based on its relationship with Fisker.

On top of that, Fisker’s Austrian subsidiary filed for restructuring, roughly the equivalent of filing for Chapter 11 bankruptcy. In its most recent filing with the U.S. Securities and Exchange Commission, the company said it had just $50 million in the bank.

Fisker was already on the ropes, but this could be the killer shot. The struggling EV company previously slashed the price of the Ocean by nearly 40 percent as it looks for a miracle to avoid a shutdown. He is facing a $13 million lawsuit from the company that developed Fisker’s Pear crossover and Alaska pickup truck. And the company was recently delisted from the New York Stock Exchange for failing to keep its share price above $1.

Without EVs, dwindling cash and an exodus from the public markets, Fisker is running out of options.

Everyone’s favorite outdoor electric vehicle company is facing a serious cash crunch. The company lost $1.45 billion in the first quarter of 2024, down from a $1.35 billion loss in the first quarter of 2023 — an incredible level of cash burn.

Fortunately, it has $7.9 billion in cash and cash equivalents, but admits that further cuts will be necessary if it is ever to achieve stability. Rivian has already gone through several rounds of layoffs in its short history, but there may be more on the horizon.

The good news is that many key indicators are growing: production is up 48 percent year-on-year; deliveries increased by more than 70 percent; and revenues increased by over 80 percent.

The company says its outlook remains good thanks to several decisions to reduce capital expenditures by moving production of the next-generation R2 vehicle to its facility in Normal, Illinois. Once the factory revamp is complete, Rivian says it will have enough space to build 215,000 vehicles a year, including the 155,000 R2 – which seems very optimistic given the current state of customer demand for EVs.

Still, Rivian finds itself stuck in the “EV valley of death,” where it has ramped up production but isn’t bringing in enough revenue to cover its operating costs. It is a particularly vulnerable place for a young company. And Rivian lacks a deep-pocketed financial benefactor like Lucid has with Saudi Arabia’s Public Investment Fund.

Speaking of which, the luxury EV brand doesn’t produce as many vehicles as Rivian, so it lost significantly less money last quarter. Lucid earned $172 million in the first three months of this year, a 15 percent year-over-year increase. It lost $680.9 million, down from $779.5 million lost in the first quarter of 2023. As such, it’s sitting on a $2.2 billion pile of cash (and cash equivalents).

But the price war with Tesla and others has taken its toll. Lucid has slashed its prices, most recently by as much as $7,000 for its rear-wheel-drive Air Pure sedan. And the luxury electric vehicle maker struggled to generate demand for its premium vehicles, producing just 8,428 vehicles in 2023, of which only 6,001 were delivered to customers. Lucid also laid off 18 percent of its workforce and scaled back production targets.

Still, having the Saudi Public Investment Fund’s vast wealth in your back pocket has paid off. Weeks before its earnings report, Lucid said it was raising an additional $1 billion from the fund, sending its stock to its highest level in months.

The public investment fund already owns a controlling stake, 60 percent, of Lucida, illustrating the automaker’s strategic advantage over struggling rivals. All of them will continue to lose money in the short term as Tesla continues to wage a grueling price war and customers continue to wonder when and how to switch to electric vehicles. But while Rivian is hemorrhaging money and Fisker flirts with bankruptcy, Lucid can keep zooming ahead.