Elon Musk Attacks Rivian, Lucid
Elon Musk, CEO of Tesla, attacked much smaller EV companies Lucid and Rivian. On his social media platform X, Musk posted, “Their product design isn’t bad, but the actual hard part of making a car company work is achieving volume production with positive cash flow.” His point is well-taken. Each company is losing billions of dollars a year on tiny sales. The stock price of each has also collapsed.
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Rivian will sell about 57,000 of its SUVs and pick-ups this year. However, at the pace the EV industry’s sales are slowing, that figure may be too optimistic. The situation is worse for Lucid, which might sell 9,000 units this year. Each is eating through their cash fast enough that there is a real possibility that they will not exist in their current forms in 2025.
The stock market has given up on both companies. Rivian’s shares are down 84% in the last two years. Lucid’s are off by 88%. If anything, those declines have steepened recently as earnings have caused more investors to jump ship.
Rivian and Lucid are not just up against Tesla. All large legacy car companies have invested billions of dollars into EV production, R&D, and marketing. None have much to show for it. Ford sold less than 3,000 of its EV flagship F-150 Lightnings in January. Sales of the Mustang Mach-E were less than 2,000 for the month. Nevertheless, legacy manufacturers have huge cash war chests that Rivian and Lucid cannot come close to matching.
Lucid and Rivian also cannot overcome the overall trend of EV sales. Tesla. which grew 35% last year based on deliveries, said it would have a slower year in sales in 2024. Ford has backed off of its aggressive investment in EVs. So have European manufacturers like Mercedes.
The consumer market is still not prepared to buy enough EVs to hit most industry forecasts. Consumers worry about the range of EVs, particularly in cold weather. They also worry about the number of charging stations and the time it takes to charge an EV.
Rivian and Lucid do not have futures. Musk is right.
