Money
It’s no longer cool to be an EV startup
EV startups are burning through more cash as demand for electric vehicles falters, according to a report.
The impact of Tesla’s price war is expected to be evident in the quarterly results of U.S. electric vehicle startups, leaving investors concerned about how these companies are managing their finances during a funding drought.
Even Tesla, the market leader, has warned of challenging times, and traditional automakers with more significant financial resources, like Ford Motor, are also facing losses in the EV market. The tough conditions have already led to the bankruptcy of Lordstown Motors, an electric truck manufacturer.
Lucid and Nikola are among the companies likely to report another quarter of significant cash burn due to ongoing struggles with production and demand. However, the Amazon-backed Rivian Automotive is expected to be a standout, with a three-fold surge in revenue for the April-June quarter and a reduced cash outflow compared to the previous quarter.
While Rivian seems to be thriving, Lucid, majority-owned by Saudi Arabia’s Public Investment Fund, is expected to report deepening losses, and Nikola is anticipated to report declining revenue and widening losses.
Fisker, on the other hand, is expected to report its first revenue from vehicle sales after starting deliveries of its Ocean SUVs in the June quarter, but it missed its production target due to parts shortages. Investors will be closely monitoring Fisker’s reservation numbers, as its Ocean SUV does not qualify for the $7,500 federal tax credit.
Overall, the EV startup landscape is facing challenges, with cash burn and funding needs being significant areas of concern for investors.
[Note: The original text mentions the date as August 4, 2023, but that date is in the future from the current date of August 4, 2023. It appears to be a typographical error or an outdated timestamp, so it is treated as the current date in this rewritten version.]
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