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 can be found all over Tesla. But Elon Musk’s company is not the only one that relies entirely on battery-electric vehicles. Three other so-called “pure EV companies” — Rivian, Lucid Motors and Fisker — also reported earnings this week. And digging through the numbers, some worrying trends emerge.

For years, it was assumed that Tesla and the dozen or so other pure electric vehicle companies it spawned would outmaneuver legacy automakers thanks to a laser focus on electric powertrains and battery production. But today it is the legacy automakers that are posting hefty profits while the pure electric car makers are failing.

Price cuts, politics and the persistent belief that charging an electric vehicle is still too difficult are holding many people back. And the Tesla imitators are taking it seriously. Rivian, Lucid and Fisker all appear to be in varying states of emergency. Let’s start with the most endangered species and go from there.

Henrik Fisker’s second attempt at building an automotive company from scratch follows the same downward trajectory as his first.

The latest news comes not from the company itself, but from the contract manufacturer that produces Fisker’s only model, the Fisker Ocean SUV. The contractor, Magna International, released earnings this week in which it effectively wiped Fisker’s hands by declaring it would no longer make Oceans for the struggling company.

“Our current outlook assumes no further production of the Fisker Ocean,” says Magna. In addition, the company faces losses of $75 million due to its relationship with Fisker.

In addition, Fisker’s Austrian subsidiary filed for restructuring, which is roughly equivalent to 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 left in the bank.

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

Without electric vehicles, 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, compared to a loss of $1.35 billion in the first quarter of 2023 – a staggering cash burn.

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

The good news is that many key indicators are trending upward: production increased 48 percent year-over-year; Deliveries have increased by over 70 percent; and sales increased by over 80 percent.

The company says its outlook remains positive thanks to several decisions to reduce capital expenditures by moving production of the next-generation R2 vehicles to its factory in Normal, Illinois. Once the factory conversion is complete, Rivian says there will be enough space to build 215,000 vehicles per year, including 155,000 R2 – which seems extremely optimistic given current customer demand for electric vehicles.

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

Speaking of which, the luxury electric vehicle brand doesn’t produce as many vehicles as Rivian and therefore lost significantly less money last quarter. Lucid brought in $172 million in the first three months of the year, up 15 percent from a year earlier. The company lost $680.9 million, compared to $779.5 million in the first quarter of 2023. That leaves the company sitting on a cash (and cash equivalent) pile of $2.2 billion.

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 has struggled to generate demand for its high-priced vehicles, producing just 8,428 vehicles in 2023, of which just 6,001 were delivered to customers. Lucid also laid off 18 percent of its workforce and cut production targets several times.

Still, having the vast assets of the Saudi Public Investment Fund in your pocket has paid off. Weeks before releasing its earnings report, Lucid announced it was raising an additional $1 billion from the fund, sending its shares to their highest level in months.

The Public Investment Fund already owns a controlling 60 percent stake in Lucid, highlighting the automaker’s strategic advantage over its struggling competitors. They will all continue to lose money in the short term as Tesla continues to wage a bitter price war and customers continue to puzzle over when and how to switch to electric vehicles. But while Rivian hemorrhages money and Fisker flirts with bankruptcy, Lucid can keep charging forward.