Auto File: Lucid joins the EV price war
07/08/2023 15:00
Nick Carey
European Autos Correspondent
nick.carey@thomsonreuters.com
Greetings from London, where I am filling in for Joe White
who’s off having some well-deserved rest in Detroit.
I just returned from my first trip to the United States
since moving to Europe mid-pandemic three years ago. Sitting at
a stop light in Davenport, Iowa, a week ago, I found myself
surrounded by three Teslas and a Rivian pickup truck.
If you’d told me in the summer of 2020 that Teslas would be
spotted in cluster like that on the banks of the mighty
Mississippi, I might have scoffed at you. Further east, in
Chicago, I quickly lost count of Teslas on the road.
There is clearly a very long way to go, as shown by the vast
numbers of huge fossil-fuel pickups rolling along highways under
big skies in the Midwest.
But in the meantime, there’s plenty of mostly EV-related
news to catch up on from the autos world today:
Lucid joins the EV price war
Nikola gets a new, new boss
A test for self-driving cars in San Francisco
* Lucid joins the crowd with EV price cuts
Analysts have been watching for months in expectation that Lucid
would eventually be forced by the price war Tesla started to
discount its models. Over the weekend, the U.S. electric vehicle
maker did just that.
Lucid reduced the price of the Air Pure by $5,000 to
$82,400, and cut the more powerful Touring and Grand Touring
versions by $12,400 to $95,000 and $125,600 respectively.
Tesla’s price cuts starting in January have sparked intense
competition in China, where about two dozen automakers have
followed with discounts of their own to stay competitive and
stoke demand.
They have also prompted global automakers including Ford,
General Motors, Honda and Stellantis to slash prices as well.
But the key difference between those established players and
Lucid is they are all still making money off internal combustion
engine models. Like other EV startups, Lucid has been burning
through cash as it tries to ramp up production.
Just how bad that cash burn is amid Tesla’s price war will
become clear as Lucid and others report earnings this week.
* Essential Reading:
- San Francisco’s unease over self-driving cars
- Congo workers still suffering for EV metals
- Sumitomo, Liontown eye Japanese lithium production
* A new boss at Nikola, again
Speaking of EV startups that have been burning through cash,
Nikola announced its fourth new CEO in as many years on Friday,
knocking more than a quarter off the electric truck maker’s
market value.
This time the startup has turned to former GM veteran
Stephen Girsky, who took over from Michael Lohscheller, who is
stepping down due to a family health matter.
The switch comes at a pivotal moment in the rollercoaster
history of Nikola, whose founder was convicted of fraud late
last year. The company had cash and cash equivalents of just
$226.7 million at the end of the second quarter – in an industry
where legacy automakers can easily spend more than $1 billion on
a new model.
Nikola's investors last week approved a proposal that will
allow the company to issue more shares. For the third time since
February the company also flagged "substantial doubts" about its
ability to continue as a going concern for the next 12 months as
it awaits "critical" additional capital.
* San Francisco poses a test for self-driving companies
Self-driving car companies face a key test in San Francisco as
Alphabet Inc’s Waymo and General Motors’ Cruise seek to expand
their commercial services – with no human safety driver on board
– across the whole city, night and day.
After two delays, a state agency is due to decide on the
issue this week. But there is plenty of opposition from the
city’s transportation agencies, fire department, and planning
department, which say the vehicles are a menace, tying up
traffic, mucking up emergency services, and driving erratically.
Waymo and Cruise say the unmanned vehicles are safer than
human-driven cars.
The Aug 10 vote by the California Public Utilities
Commission has become a battle pitting technologists, lobbyists
and citizens hopeful self-driving cars will be a boon for San
Francisco against agencies, safety advocates and residents
fearful the city is a laboratory for unproven tech.
* Fast Laps
- General Motors said on Friday it aims to add jobs in 2024
despite concerns raised by autoworkers that the shift to EVs
will reduce the need for labour.
- U.S. trucking firm Yellow Corp filed for Chapter 11 bankruptcy
protection on Sunday and said it would wind down after
struggling with a mounting debt load and following tense
contract negotiations with the Teamsters Union.
- The owner of the car carrier Fremantle Highway, which caught
fire off the Dutch coast in late July with nearly 500 EVs on
board, said on Friday it will investigate the cause of the
incident.
- Daimler Truck said on Sunday its Chief Financial Officer,
Jochen Goetz – largely responsible for the truck maker’s
successful spin-off from Mercedes - had died in a "tragic
accident," but provided no further details.
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(Editing by Andrew Heavens)