Fisker. Lucid. Rivian. They all have one thing in common: in addition to being all VE Startups, they all had high business valuations before they collapsed. Now like The Washington Post reports, we may be at a point where it’s the survival of the fittest EV company, with some underperforming brands disappearing from the EV space altogether.
Race Technology 5 | Nascar Garage 56
Like many companies during the pandemic, EV startups had billion-dollar valuations that skyrocketed even though the companies weren’t really doing anything. Although this is his third experience building cars, Fisker filed an IPO at the end of 2020. Despite having no products to sell and therefore no revenue, the company was still valued at $8 billion. The following summer Lucid went public with a valuation of $91 billion after some begging; Rivian followed a few months after with its IPO and a valuation of $121 billion after. initially seeking an appraisal of $80. Both Rivian and Lucid had these ratings despite the absence of their delivery estimates This year.
Worse, since those IPOs, company values have plummeted, and a few are burning through cash faster than they can raise it. It’s bad:
On Monday, Lucid announced a loss of more than $779 million in the first three months of 2023, compared to a loss of more than $81 million recorded in the same quarter last year. Its cash reserves have fallen to $900 million, from more than $1.7 billion reported at the end of 2022. The company also said it plans to produce more than 10,000 vehicles – in the lower limit of its previous predictions.
A day later, Fisker reported a loss of $120 million for the first three months of 2023 and said it had spent $84 million in cash. The company cut this year’s production target to between 32,000 and 36,000 from the 42,400 it previously forecast.
On Tuesday, Rivian reported losses of $1.3 billion for the first three months of this year. It is more liquid than its rivals, ending the quarter with around $11.2 billion in cash and cash equivalents.
Up to 50% off
Wayfair Grill Sale & More
If you want or need a grill to cook sizzling steaks or delicious hamburgers, there is an offer for you. Wayfair’s Grill & More Sale is live right now, and for the next 5 days, you can save up to 50% on grills from Char-Broil, Weber, KitchenAid, and more.
The economy is also not working in favor of startups. Interest rates have risen, making outside capital difficult to find. Some experts liken it to the early days of the auto industry, where many players were reduced to the few who actually delivered on their promises. And despite their difficulties, some, like Wedbush analyst Dave Ives, think Rivian and Lucid will emerge successful. Rivian stands out the most. Ives says the startup has the best potential to be a “mini Tesla-like ecosystem.” Only time will tell.