Well, I didn’t plan to do another EV roundup so soon, but the collapse of everything EV - other than Tesla’s boutique niche - has accelerated since my last roundup a couple weeks ago.
Above all else, Gov. Brian Kemp’s billion-dollar taxpayer boondoggle in Georgia has apparently hit its ”gradually, then suddenly” moment. I’ve been discussing Rivian’s hype and struggles for a couple years. The excuse of “supply chain issues” can no longer mask the consumer rejection and failed business plan of Rivian.
As I’ve written about previously, Gov. Kemp (R) committed $1.5 billion of Georgia taxpayer money in 2021 to persuade Rivian to build a plant east of Atlanta that would allegedly create 7,500 new jobs and manufacture up to 400,000 EVs per year. Construction on the plant was supposed to commence in 2023, but it has been pushed back and has still not begun. The state, however, has spent a great deal of taxpayer money doing grading and roadwork for this plant that almost certainly won’t be built.
The most recent news from Rivian has been horrific.
The failing EV manufacturer lost another $5.4 billion in 2023, including $1.5 billion in just the 4th quarter. That comes out to a loss per unit sold of $108k on both an annual and quarterly basis. Rivian is reporting a lower “gross” loss of $43k per vehicle, which doesn’t include all the overhead expenses that are also consuming its cash, but that is even worse because it means that there is no sales volume for Rivian that is profitable, and that each incremental sale means another $43k of cash gets burned.
Rivian is now slashing employment, which is not what a company in growth mode does.
It’s interesting that the headlines are parroting Rivian’s announcement that its Q4 loss “narrowed” to $1.52 billion, when the loss actually increased from a $1.37 billion loss in Q3. The “narrowing” is compared to the loss in Q4 of the prior-year.
Electric vehicle startup Rivian Automotive reported a fourth-quarter net loss of $1.52 billion compared with a $1.72 billion loss in the same quarter a year earlier.
Rivian said it doesn't expect production to increase significantly this year compared with last year. Rivian also said it is cutting staff. “Today, Rivian also announced it is reducing its salaried workforce by approximately 10 percent,” the company said.
Rivian’s existing plant in Normal, IL has a manufacturing capacity of 150k units per year, but it manufactured just 57k vehicles in 2023, which was 7k more than there was demand for, since it only delivered 50k EVs.
The company was expected to produce 81,700 vehicles in 2024, according to eight analysts polled by Visible Alpha, Reuters said. Rivian produced 57,232 vehicles last year.
At these sales and manufacturing volumes, there is zero need for a new factory in Georgia. Of course, at these sales volumes and losses per unit, there won’t be a going concern named Rivian that could even occupy a factory in Georgia.
Cash and cash equivalents at the end of the September quarter were $7.94 billion, compared with $9.26 billion in the preceding three-month period.
$7.9 billion won’t go far when you’re losing $5.4 billion per year. Unsurprisingly, Rivian’s stock price is hitting all time lows. It has plunged 91% since Rivian’s IPO in 2021.
Elon Musk is helpfully offering his thoughts on Rivian’s death spiral…
There is a lot of chatter about Rivian needing to be acquired by Tesla or a legacy automaker before it goes bankrupt, but Tesla doesn’t need a money-losing EV line, and GM and Ford are already proficient at losing money on EVs without Rivian in their stable of marques.
Ford Has Stopped Shipments of its Slow Selling EV Pickup Truck
Meanwhile, with Ford’s F150 Conflagration Lightning electric pickup trucks gathering dust at dealerships and piling up on storage lots all over Michigan, Ford has suddenly announced a suspension of new shipments of its unwanted EV. Automotive journalists have been peppering Ford with questions as to why this is happening. The answers have been either vague or humorous.
“Headlight issues.” Uh huh. I believe that Ford’s failed Edsel venture was also due to “headlight issues.” Likewise, when Ford killed off the Mercury brand a few years ago it was due to “headlight issues.”
Ford spokeswoman Emma Bergg told the Free Press that Ford stopped shipping the Lightning on Feb. 9 as part of quality control protocols, after beginning delivery in January on schedule.
Ford may be stopping shipments of its electric truck due to “headlight issues,” but strangely enough, the ones on the lot have not been recalled to have their “headlight issues” fixed. In fact, although there is a “stop ship” in place, there is not a “stop sale.” You are still welcome to buy an F150 Lightning that is already on a dealer lot, irrespective of its “headlight issues.”
"This is not a stop sale," [Ford Spokesman Emma] Bergg said. "Stop ship is part of the built-in manufacturing process. It's all quality control."
Call me cynical, but it almost sounds like Ford is drowning in a glut of unsellable electric pickups, and “headlight issues” is a euphemism for consumer rejection.
And speaking of Ford’s explosively exciting electric pickup, the National Highway Transportation Safety Administration just issued a new recall on 2023 model F-150 Lightnings, due to – what else – a risk of battery fires.
Mercedes Backing Off Its All-EV Pledge
Mercedes had announced, to much praise and acclaim a few years ago, that it would sell only electric vehicles by 2030. I know of at least one sale it lost because of that announcement. When it was time to replace my wife’s Alabama-built Mercedes not too long ago, we ruled out another Mercedes, in part because of Mercedes’ all-EV pronouncement.
Mercedes is now backtracking on that promise…
“Mercedes-Benz Walks Back 2030 Deadline for Full Electrification” [Edmunds – 02/28/2024]
Three years ago, Mercedes-Benz said that by 2030, the brand with the three-pointed star would only sell EVs or PHEVs.
In its fourth-quarter earnings statement, Mercedes predicts that just 50% of its sales will be all-electric, and CEO Ola Källenius told Reuters: “It’s not going to be 100% in 2030, obviously …
Instead, Mercedes says that “customers and market conditions will set the pace of the transformation.” In 2024, at least, “market conditions” aren’t looking great for EVs.
I wonder how many other loyal customers Mercedes ran off with that ridiculous, virtue-signaling promise to stop selling the product that its loyal customers were buying.
The EV Manufacturer Dead Pool
While Rivian’s impending demise is the most prominent EV failure with the most political baggage, there are a few other once-high-flying EV manufacturers which may fail first…
Fisker’s stock traded at $29 per share just 3 years ago but it’s now trading at just 50 cents per share, as it has seemingly hit the end of the road.
“EV Maker Fisker Reports Bleak Outlook in 2023 Earnings Call” [Car & Driver – 3/02/2024]
The electric-vehicle startup manufacturer Fisker announced a bleak outlook in an earnings call, with the company citing "substantial doubt about Fisker's ability to continue as a going concern."
Meanwhile, luxury EV manufacturer Lucid’s stock has dropped from $55 per share to $3 per share as it is laying off employees and seeing its very low sales volume trend even lower.
“Lucid Motors sold just 6,001 cars in 2023” [Tech Crunch – 01/11/2024]
Lucid Motors delivered only 6,001 of the 8,428 cars it built last year, as it continues to struggle to generate demand for its luxury electric sedans. The Saudi-backed company limped to the finish of 2023, building just 2,391 cars and delivering 1,734 in the fourth quarter — down 31% and 10%, respectively, from the fourth quarter of 2022.
The disappointing sales figures cap a tough year for Lucid. The company laid off nearly 20% of its workforce (around 1,300 people), reduced its production targets multiple times and lost its chief financial officer. Lucid CEO Peter Rawlinson said on multiple occasions that his startup was struggling to find buyers.
With the bloom off the EV rose, Apple has learned that electric vehicles occupy a lane in which it cannot compete. As I discussed in my most recent article at The Pipeline, Apple is pulling the plug on its EV project, having wasted billions of dollars learning that a self-driving, electric vehicle is not just another electronic device.
“Apple to Wind Down Electric Car Effort After Decadelong Odyssey” [MSN – 02/28/2024]
Apple Inc. is canceling a decadelong effort to build an electric car, according to people with knowledge of the matter, abandoning one of the most ambitious projects in the history of the company.
Buy a Car, Get a Check Bag of Rice
Enough about EVs for today. Let’s close with a great auto dealership sales promotion.
When I was kid, Joe Garagiola was all over the TV pushing Chrysler products with the “Buy a car, get a check” promotion. Burnsville Toyota in Minnesota has a similar promotion for the large Hmong population it serves…
Let’s finish up with Mr. Garagiola his own self…
[buck.throckmorton at protonmail dot com]