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EV Startups on Shaky Ground

Several signal headwinds are rocking their plans as they compete with much bigger rivals in uncertain conditions.

March 8, 2023
EV Startups on Shaky Ground

Fisker's sports utility vehicle has one of the least expensive sticker prices in the segment at $37,499.

IMAGE: Fisker

2 min to read


Conditions look shaky for several American electric-vehicle startups as the larger EV segment undergoes a price war started by market leader Tesla and EV demand wanes for their higher-priced models.

The carmakers are battling less expensive EVs produced by Ford and other legacy brands, along with the Tesla price cuts that started in January – all compounded by continually rising interest rates.

Up to $7,500 in new federal tax credits for some EV models don’t seem to be helping the startups, and the effects of the segment market pressures have been swift and damaging for the new kids on the block.

For starters, Rivian plans a $1.3 billion cash raise with a convertible-note sale to bankroll development of the smaller sized R2 series, whose launch it delayed by a year. The company recently laid off 6% of its employees and also plans to produce 10,000 fewer vehicles this year than analysts forecasted. Its stock fell nearly 15% to an all-time low after the cash raise was announced.

Sedan maker Lucid forecasted its 2023 production will fall short of analyst expectations after experiencing a steep fall in orders in the fourth quarter. It also delivered significantly fewer vehicles last year than it produced. The company has indicated it plans to increase marketing.

Commercial EV truck maker Nikola said it doesn’t expect pressures on demand for its models to let up for the foreseeable future. Its shares have fallen 5% since its most recent earnings results.

Meanwhile, Fisker is bucking the downward trend among its EV startup cohorts. Though its produced a small number of its sports utility vehicle, the model has one of the least expensive sticker prices in the segment at $37,499, and its ascending orders reflect that.

LEARN MORE: Tesla Cuts More Models' Prices

 

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