Luxury EV Startups Rivian and Lucid Face a Tough Road

These electric vehicle manufacturers are in serious need of a recharge.

With the triple threat of poorer-than-expected earnings, job cuts, and disappointing production guidance, luxury EV startups Rivian and Lucid look to be driving down a bumpy road in 2024. 

Not Enough Juice

As much enthusiasm as the Biden administration, car companies, and green-conscious drivers have for EVs, reality is preventing them from fully penetrating the market. Most car makers with ambitions to go all-electric in just a few years have scaled back those plans in the face of slowing demand, choosing instead to focus on more popular hybrid vehicles. 

The biggest hindrance is cost. Interest rates are still high, preventing many people from big purchases anytime soon, and EVs are still a big purchase: the average price paid for a new EV in January was $55,353, according to Kelley Blue Book. While that’s 11% cheaper than a year ago, it’s still not close to gas-powered cars. Plus, the “average” EV is likely coming from makers like Ford and Hyundai, while the cheapest Rivian and Lucid models still cost about $70,000. Not even up to $7,500 in federal tax credits can make that a bargain: 

• Rivian — which lost more than over $40,000 on every vehicle it delivered in the last three months of 2023 — took a $5.4 billion hit for the full-year 2023, while its cash and equivalents slumped to $7.85 billion from $11.6 billion.
• The company expects to build a similar number of vehicles this year, about 57,000, but it plans to do so after cutting another 10% of its workforce, its third round of layoffs in the past year and a half.

Lucid didn’t show much promise, either, posting a fourth-quarter loss on Wednesday of $653.8 million and forecasting it’ll build only 9,000 cars this year. Its stock has fallen nearly 30% already in 2024. 

Do As I Say, Not As I Do: Elon Musk, CEO of Tesla, is expressing solidarity with his fellow EV makers. Just kidding, here’s what he actually posted on X: “current trajectory has [Rivian] bankrupt in about six quarters. Maybe that trajectory will change, but so far it hasn’t.” He also went after Lucid, saying, “Their Saudi sugar daddy is the only thing keeping them alive” — the Saudi Arabia Public Investment Fund owns a 60% stake in Lucid. The funny thing is, though, Musk once tried to take Tesla private via backing from the PIF, and Saudi Prince Al Waleed bin Talal Al Saud even owns a sizable piece of X. His trash talk has no fear or favor.