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Home Forbes Magazine

Rivian, Lucid tumble as slowing EV demand upsets ramp-up plans

by Riah Marton
in Forbes Magazine
Rivian, Lucid tumble as slowing EV demand upsets ramp-up plans
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RIVIAN Automotive and Lucid Group tumbled on Thursday (Feb 22) after their earnings reports pointed to the impact of slowing electric-vehicle demand on their costly ramp-up plans.

Rivian tanked 25 per cent to a record low after it forecast flat growth in annual production, also hurt by a shutdown of its assembly line for upgrades. Lucid sank 9 per cent as its production forecast also came below estimates.

The companies said an uncertain economic outlook and high interest rates were hitting demand for EVs, echoing remarks from market leader Tesla and legacy automakers like Ford .

“Despite having built a highly rated and desirable EV, Rivian appears to have hit a near-term air-pocket and caught the recent EV bug,” said Canaccord Genuity analyst George Gianarikas, who cut his price target on the stock by US$10 to US$20.

EV startups have been burning billions of US dollars in cash in their efforts to develop, source and ramp up manufacturing of vehicles, hoping to be the next Tesla.

Rivian was set to lose more than US$3.5 billion in market capitalisation, if the losses hold, while Lucid’s valuation was set to fall by nearly US$1 billion.

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Their stocks have had a weak start to the year, with Rivian down 34 per cent and Lucid down 12 per cent, after a tumultuous 2023 when Tesla’s price war roiled the industry.

Rivian said on Wednesday it expected to post its first gross profit in the fourth quarter, after it reported a loss of about US$43,000 per vehicle in the October-December period.

In comparison, Ford’s Model E electric vehicle division lost an average of more than US$47,000 per vehicle in the same period.

Cheaper models

Rivian is betting on the R2 sport utility vehicle set to be unveiled next month to compete with Tesla’s best-selling Model Y crossover and attract customers with a smaller and cheaper EV.

But the R2 SUV, which is expected to be priced around US$50,000, is set to be launched only in 2026.

Rivian CEO RJ Scaringe said much of the upgrades to the R1 assembly line in the second quarter were made to enable the R2 vehicles.

Lucid, meanwhile, plans to start production of the Gravity SUV, with more than 400 miles of range and expected to be priced at US$80,000 later this year, with larger volumes expected in 2025 onwards.

Lucid also discussed a third model in the midsize category, slated for production in late 2026, but did not provide further details on the model.

“We view near-term deliveries as an unknown, with that uncertainty spreading to Lucid’s Gravity SUV launch, with Lucid’s midsize programme set for a 2026 debut,” Needham analyst Chris Pierce said. REUTERS



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Tags: demandLucidPlansrampupRivianSlowingtumbleupsets
Riah Marton

Riah Marton

I'm Riah Marton, a dynamic journalist for Forbes40under40. I specialize in profiling emerging leaders and innovators, bringing their stories to life with compelling storytelling and keen analysis. I am dedicated to spotlighting tomorrow's influential figures.

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