Factbox: What are EV startups doing to ride out weak demand?
08/03/2024 12:00
March 8 (Reuters) - U.S. electric vehicle startups are
turning to cheaper models, slamming the brakes on their
production ramp-up plans and laying off employees to navigate a
slump in demand due to steep borrowing costs and high repair
expenses for the vehicles.
Tesla TSLA.O has told suppliers it wants to start
production of a new cheaper, mass market product in mid-2025,
Reuters reported in January, as it looks to compete with cheaper
gasoline-powered cars and inexpensive EVs from China.
Here's how EV startups are trying to steer through the
demand weakness:
RIVIAN AUTOMOTIVE RIVN.O
Rivian on Thursday introduced its smaller, less expensive
electric R2 SUVs and R3 crossovers with plans to start producing
the R2 at its existing U.S. factory to hasten deliveries in the
first half of 2026.
The move came weeks after the company said it was planning a
weeks-long production shut down this year to upgrade its
factories and cut costs.
The company expects to produce 57,000 vehicles in 2024, well
below estimates of 81,700 units. That is also far below the
estimated 1.8 million vehicles Tesla delivered in 2023.
After shying away from cutting the price of its vehicles
last year, Rivian in February introduced lower-range options for
its existing cars that are $3,100 cheaper.
The startup has focused on reducing its cash burn by
re-negotiating supply contracts and building some components
in-house. It ended the fourth quarter of 2023 with $9.37 billion
in cash, cash equivalents, including short-term investments.
LUCID GROUP LCID.O
Lucid, which has Saudi Arabia's Public Investment Fund as
its largest investor with a stake of more than 60%, has also
forecast annual production that was widely below estimates as it
looks to control cost.
The company has missed analysts' expectations for revenue
for six straight quarters. It has slashed the price of the Lucid
Air Pure to $69,900 and is including two years of free scheduled
maintenance and charging allowance as an incentive.
Lucid in November unveiled its Gravity SUV that will start
under $80,000 and is expected to go into production late this
year.
The company has said it aims to start producing a cheaper
midsize vehicle in late 2026 to compete with Tesla's Model 3 and
Model Y vehicles, with a price point of around $50,000.
Lucid ended fourth quarter of 2023 with $1.369 billion in
cash and cash equivalent.
FISKER FSR.N
Fisker issued a going-concern warning this month and said it
would lay off 15% of its staff and pause investments on future
projects until it secures partnership with a manufacturer.
Reuters has reported that Nissan 7201.T is in advanced
talks to invest in Fisker in a deal that could provide the
Japanese automaker with access to an EV truck while giving the
struggling startup a financial lifeline.
Demand has been weak for Fisker's flagship Ocean electric
SUV. Despite producing more than 10,000 vehicles in 2023, the
company delivered only about 4,700.
The company ended 2023 with cash and cash equivalents of
$325.5 million, down from $527.4 million as of Sept. 30,
NIKOLA NKLA.O
Nikola is pivoting to big rigs powered by hydrogen, after
some of its battery-electric trucks caught fire in August and
forced a recall.
The company expects up to $170 million in truck revenue for
2024 with a target to sell 450 units this year, including its
hydrogen fuel cell electric trucks.
Its cash balance stood at $464.7 million as of December-end,
and the company has said it had the "the highest unrestricted
cash balance" since the fourth quarter of 2021.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
EV stocks sputter in the face of weak demand https://reut.rs/3T2FHT8
EV startups losing tens of thousands of dollars on each vehicle
sold https://reut.rs/3V5YuiX
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Priyanka.G in Bengaluru; Editing by Sriraj
Kalluvila)
((Priyanka.G@thomsonreuters.com;))