EV makers are preparing to release some unsettling quarterly figures, as most startups are predicted to record losses as they continue to burn through cash. And while legacy automakers may be better prepared to weather the storm by virtue of their deeper cash reserves, it’s unlikely enough to stem the bleeding associated with the development of new tech.
Earlier this year, market leader Tesla triggered a price war with multiple deep cuts to prices across its range. The aggressive move by the company may still have an impact on its own bottom line, with the company sacrificing margins for growth. But executives are braced for “turbulent times” ahead, with Elon Musk last month telling investors that the world economy is going through an unpredictable period.
Legacy automakers may have a buffer, but investors will be keen to see some kind of turnaround. Ford in particular, told investors the company lost $32,000 per car in the second quarter of the year, while General Motors managed to shift twice as many EVs in the first quarter.
See Also: The “Roof Is On Fire” At VW, As CEO Tells Managers To Find $11 Billion In Savings
Those expected to suffer the most, though, are the relative newcomers to the game. Lucid and Nikola are projected to announce steep cash burn, reports Reuters. For Lucid, losses have been compounded by supply chain problems hampering production from April through June. Nikola, meanwhile, is expected to register a 15 percent decline in revenue. Layoffs and the liquidation of a recently acquired battery business have helped Nikola’s share price, rising some 40 percent this year, but that may not be enough for the company’s continued funding requirements.
Fisker may fair better, with the company set to post its first revenue with deliveries of the Ocean SUV beginning in June. However, despite healthy cash reserves, parts shortages have meant that production targets were missed, and the Ocean SUV does not meet the criteria set out for the $7,500 federal tax credit.
Amidst the doom and gloom, however, there is one star performer expected, and that comes in the form of Rivian. Analysts expect a three-fold surge in revenue for the April-June quarter, bringing it to $983.1 million. Cash outflow is expected to have been reduced by $600 million to $1.19 billion, improving gross margin from negative 58.6% to negative 51.3%.
