Feb 26, 2024 - Technology
Lucid and Rivian: 2 EV startups with similar problems
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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.
