Elon Musk warns Lucid and Rivian that they are headed for bankruptcy

0

Regardless of how you feel about electric vehicles, Tesla, or even Elon Musk, most agree that Musk pioneered the electric car revolution. With nearly every legacy automaker committed to electrification, it’s an idea that finally seemed to take hold. And as manufacturers release new presentations and tackle challenges, most listen when Elon Musk shares advice.

However, Musk recently offered a stern warning to two of his direct electric vehicle competitors: Rivian and Lucid Motors. Musk claimed that both would be headed for certain bankruptcy if they didn’t immediately start making changes to the way they run their companies. He seems tough at first, but with more context for his predictions, he may be telling some tough truths for Rivian and Lucid Motors.

Why Elon Musk thinks Rivian and Lucid Motors are headed for bankruptcy

elon musk | fake images

Given that Elon Musk has already been through the trials and tribulations associated with launching an entirely new EV car manufacturing company, he can certainly speak from experience. During an interview, the CEO of Tesla told the Tesla Silicon Valley Owners Club that his competitors were in big financial trouble. Electrek reported that according to Musk, Rivian and Lucid Motors “will both go bankrupt.”

His warning was not meant to be overly critical, and Musk also said, “I hope they can do something.” But his sentiments suggest that both US-based electric vehicle startups must do something drastic to cut costs or, as Musk put it, they will surely “end up in the car graveyard.” Interestingly, he also claimed that most electric car manufacturers face the same financial demise, except for Tesla and Ford.

Both Rivian and Lucid Motors increased the prices of their vehicles earlier this year. And Musk thinks that’s just a mistake, noting that doing so would “reduce the number of people who can afford them” almost exponentially. Both electric vehicle startups posted annual losses, including Rivian, which took a $1.5 billion hit last quarter. And while the track record doesn’t look good, there’s more context to the financial position of Lucid Motors and Rivian right now.

What consumers can expect from the Rivian and Lucid production lineups

” src=”https://www.youtube.com/embed/lbGaPOYY5gk?feature=oembed” frameborder=”0″ allow=”accelerometer; self-reproduction; clipboard-write; encrypted media; gyroscope; picture in picture” allowfullscreen>

When you look at Tesla’s early track record, it was also losing money early in production. Critics of Elon Musk’s recent warnings remind consumers that Rivian and Lucid Motors are facing the same obstacles Tesla once faced.

However, some significant differences include Rivian being released on a much larger scale than Tesla. And the EV startup still reported $17 billion in cash on hand, says Inside EVs, meaning it can continue to produce its next-gen R2 series of EVs.

” src=”https://www.youtube.com/embed/9jkRcrM6XKA?feature=oembed” frameborder=”0″ allow=”accelerometer; self-reproduction; clipboard-write; encrypted media; gyroscope; picture in picture” allowfullscreen title=””I tried to warn you” – Elon Musk LAST WARNING (2022)”>

Lucid Motors is also experiencing EV growing pains. It closed its first quarter with $5.4 billion in cash in the bank, which is enough to fund production through 2023. Lucid CFO Sherry House remains confident in the company’s financial position to continue production. And just like Rivian did, Lucid raised vehicle prices to help.

As far as consumers are concerned, both Lucid and Rivian still have a goal of rolling new electric vehicles off their respective production lines. The Rivian R1T is the company’s flagship EV pickup. And Lucid Motor’s Lucid Air is a luxury EV sedan, challenging the likes of the Mercedes-Benz S-Class, as NPR described it. Both vehicles have been attracting investors since their inception.

Production issues plaguing both electric carmakers

” src=”https://www.youtube.com/embed/7uGw7mll4vk?feature=oembed” frameborder=”0″ allow=”accelerometer; self-reproduction; clipboard-write; encrypted media; gyroscope; picture in picture” allowfullscreen>

Since launching their company, Rivian and Lucid Motors have faced many challenges. Like Tesla initially did, both companies unveiled popular vehicles capable of exciting car buyers. The problems come when it comes time to produce those cars and release them to the public.

Despite missing production targets, Rivian still produced more than 2,500 EVs and delivered 1,227 in the first quarter of this year. Their total is about 5,000 units. Lucid Motors had its own problems, missing some of its production targets. But it is still on target to produce 12,000 to 14,000 units this year.

Elon Musk may be raising the warning flag over Tesla rivals Rivian and Lucid Motors. But they may just be growing pains. Although taking on too many financial losses could eventually be detrimental to the success of both electric vehicle startups.

RELATED: Lucid Air Sits At The Top Of Luxury EV Sales, Beating Porsche And Tesla

Share.

Comments are closed.