Feb 26, 2024 - Technology

Lucid and Rivian: 2 EV startups with similar problems

Data: Yahoo Finance; Chart: Axios Visuals
Data: Yahoo Finance; Chart: Axios Visuals

Rivian and Lucid are both getting punished in the market.

Why it matters: It's tough out there for pure-play electric vehicle companies, even buzzy ones with well-received models, as they churn through cash.

  • GM, Ford and other legacy automakers are also having EV problems, but have lucrative gas-powered models to shore up the books.

Catch up quick: Rivian doesn't plan to grow production this year after a big jump in 2023 and will cut 10% of its salaried workforce.

  • "Our business is not immune to existing economic and geopolitical uncertainties," CEO RJ Scaringe told analysts, saying high interest rates are hitting demand.
  • Shares of Lucid — which makes the luxury Air sedan — also dropped sharply last week after mixed results and plans for only modest production increases.

Between the lines: There's no single reason EV startups are struggling. For Rivian and Lucid, part of the problem might be the price points.

  • An LA Times piece notes the challenge Rivian is suffering as it tries to expand beyond an initial pool of wealthy adopters.

What's next: Rivian unveils a midsize and less expensive SUV on March 7, though production reportedly doesn't launch until 2026.

  • Lucid hopes to start production of its second vehicle — the Gravity SUV — late this year.
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