Startup electric automakers are facing a series of crises that could cripple them financially and make it hard to grow in any meaningful way in the future. Inflation and incredible jumps in raw materials costs have led companies like Rivian and Lucid to lose staggering sums of money over the last year.
Reuters reported that some companies are losing money on every vehicle they sell. Lucid’s costs climbed by hundreds of millions of dollars, and some customers have canceled orders over long wait times and delays. The company’s market value has plummeted as a result, but it says it can continue operating through the end of 2023 at least.
Tesla had similar issues when ramping up production of the Model 3, but as Reuters points out, the company didn’t have to face those challenges while competing against several other automakers. Now, Rivian and Lucid have Tesla and several legacy automakers like Ford and General Motors to contend with while also working to shore up spending. At least Rivian has big-name backing from Amazon and Ford, and it’s well-positioned to ride out the rough weather with plenty of cash on hand.
Automakers are cutting costs where possible to weather the storm and survive the approaching harsh economic conditions. Rivian is moving more of its shipping operations to rail, while Lordstown Motors has sold half of itself to Foxconn and slashed output to cut spending.
[Image: Rivian]
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via Autobuzz Today
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