The latest financial reports for the first quarter of 2024 paint a bleak picture for electric vehicle (EV) companies, both established and burgeoning. Investors with optimistic outlooks may find themselves disheartened by the downturn in fortunes for several major players in the industry. Let’s delve into the specifics.
Starting with Fisker, the outlook is grim. Following a series of setbacks earlier in the year, the company appears to be hurtling towards insolvency. A crucial revelation from Magna International, the contract manufacturer responsible for producing Fisker’s Ocean SUV, casts a shadow over the company’s future. In their earnings report, Magna International expressed doubts about the continuation of Ocean production, citing potential losses of $75 million linked to the Ocean contract. Essentially, the factory responsible for Ocean production is signaling an end to its operations. Since the Ocean represents Fisker’s sole vehicle offering, and there’s no alternative production facility in place, this development spells the beginning of the end for Fisker.
In a parallel narrative, Fisker’s Austrian subsidiary has filed for bankruptcy, further exacerbating the company’s woes.
Meanwhile, Rivian’s financial report for Q1 presents a mixed bag. While there are positive indicators such as increased deliveries, production, and revenue growth—a notable $661 million increase—the company is grappling with substantial cash burn. Despite the promising uptick in deliveries, Rivian incurred a staggering net loss of $1.45 billion in Q1 2024, marking an escalation from the previous year’s $1.2 billion loss for the same period. Speculation about potential partnerships, including rumors of collaboration with Apple, offers a glimmer of hope amidst the financial tumult. However, the persisting cash burn remains a cause for concern.
Similarly, Lucid finds itself ensnared in a cash-burning predicament. Although its production volume falls short of Rivian’s output, the company acknowledges a shortfall in its target of manufacturing 9,000 cars this year. Despite reporting an increase in revenue to $173 million for Q1, Lucid faces mounting losses, with a Q1 total loss of $685 million. Despite this, the company maintains a substantial cash reserve of $2.2 billion, providing a buffer against immediate crisis. Nonetheless, subdued demand for its vehicles underscores the challenges ahead.
Tesla, the industry giant, is not immune to the industry’s turbulence. Recent reports suggest further layoffs across various departments, including engineering, service, and software groups. Although Tesla has not officially confirmed