Rivian, Lucid and other electric vehicle startups are scrambling to raise cash and serene Wall Street

Once-fashionable electric vehicle startups – fueled years ago by low interest rates, free cash and an upward trend on Wall Street – are now scrambling to prove they can survive in tougher market conditions. That is, if they haven’t gone bankrupt yet.

The most significant of their topics: cash.

Management Rivian Automotive, Conscious Group AND Nikola company. This week, everyone plans in detail to reduce costs, while trying to develop their business and achieve the first profits. These efforts ranged from job cuts and changes in production to reorganizing suppliers and changing priorities.

The problem comes as the rollout of electric vehicles has been slower than many expected and after companies have spent billions trying to rush vehicles to market to gain first-mover advantage in white-space segments.

Of the three automakers, Rivian is in the strongest financial position as electric vehicle adoption struggles. The company says it has enough cash to complete the R2 grand launch in early 2026.

The slowdown and increased competition even affected the American leader of electric vehicles Teslawhich is undergoing a global restructuring that includes laying off approximately 10% of its workforce.

Wall Street analysts have described the current state of the electric vehicle market as the “electric vehicle winter”, the end of the so-called electric vehicle euphoria or, more optimistically, a fleeting slowdown that automakers will have to overcome to achieve long-term profits.

“The U.S. deployment of electric vehicles has likely created an air pocket as it reaches early adopters and specific regions,” Citi analyst Itay Michaeli wrote in a note to investors on Thursday. “The situation will not change overnight, but we see reasons for optimism over the next 12-18 months.”

Rivian has been on a cost-cutting mission for months. He reduced staff, equipped the Illinois plant to enhance efficiency and halted construction of a modern multibillion-dollar plant in Georgia. This latest development is expected to save more than $2.25 billion in capital expenditures, including the start of production of Rivian’s next-generation R2 vehicle at its current facility in Normal, Illinois.

At the end of March, Rivian reported $7.86 billion in cash, cash equivalents and short-term investments, and total liquidity exceeded $9 billion.

Lucid, for its part, ended the first quarter with approximately $4.6 billion in cash, cash equivalents and investments, with total liquidity of approximately $5.03 billion.

Lucid CEO Peter Rawlinson said he has never been “more positive” about the startup’s future, despite noticeable demand issues, significant losses and capital needs. The company raised $1 billion from an affiliate of the Saudi Arabian Public Investment Fund, its largest shareholder.

“We have identified additional opportunities in cost of goods sold and will continue to focus on implementation and further cost areas. “Over the long term, our technology will be a key driver of our gross margin,” Rawlinson told investors on Monday. “I believe that with scale you will achieve high gross margins, and the key factor will be efficiency.”

Rawlinson said the $1 billion illustrates the “continued confidence and unwavering support” of the Public Investment Fund, which owns about 60% of the company, according to FactSet.

Both Rivian and Lucid reported larger first-quarter losses than Wall Street expected, according to estimates compiled by LSEG.

Nikola actually narrowly beat the Street, posting a 9-cent-per-share loss in the first three months of the year, but revenue of $7.5 million was less than half what analysts expected from LSEG.

Unlike Rivian and Lucida, Nikola focuses exclusively on commercial vehicles, not retail vehicles. Nikola Chief Financial Officer Thomas Okray said the company needs to cut costs while continuing to enhance sales, including potentially lowering prices for huge customers, to enhance scale.

“We definitely need to optimize our cost structure. There is no doubt about it,” Okray told investors on Tuesday.

Nikola’s cash reserves are significantly lower than those of Lucid and Rivian. The company’s assets at the end of the first quarter amounted to $469.3 million, consisting primarily of cash and cash equivalents of $345.6 million and truck inventory of $61.3 million.

Shares of Rivian, Lucid and Nikola are trading near 52-week or all-time lows, and Nikola shares – once priced at over Ford engine – trading at less than $1 per share. This puts the company at risk of delisting from the Nasdaq, which management is trying to avoid through a reverse stock split that must be approved by shareholders.

Rivian shares are down about 56% this year, but they remain the healthiest of high-profile electric vehicle startups, most of which (except Rivian) have gone public via special purpose acquisition companies (SPACs) over the past five years.

For most of last year, Lucida shares traded below $8. Shares closed at $2.70 on Thursday, down more than 60% in the past 12 months.

Other electric vehicle startups such as Lordstown Motors and Electric Last Mile Solutions have gone bankrupt, and Fisker is on the verge of filing for bankruptcy and has halted vehicle production.

Less known Canoo is scheduled to release first-quarter results on Tuesday. Tony Aquila, Canoo’s CEO and executive chairman, said during last month’s fourth-quarter earnings call with investors that the company must continue to raise capital and reduce costs.

“We saw that the market was very challenging. We have tailored our approach to disciplined capital deployment, raising only the amount of capital we need for each milestone, and we will continue to do so,” he said.

— CNBC Michael Bloom contributed to this article.