May 26, 2024

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Rivian and Lucid are at new lows as Ford cuts prices to fans' concerns about electric vehicles

Rivian and Lucid are at new lows as Ford cuts prices to fans' concerns about electric vehicles

(Bloomberg) — Shares of electric vehicle startup Rivian Automotive Inc. closed lower. and Lucid Group Inc. at all-time lows on Thursday after Ford Motor Co. cut prices for its electric pickup truck.

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The industry-wide price war on electric vehicles is a major concern for investors, as it impacts margins. For unprofitable startups like Rivian and Lucid, that threatens to further delay the timeline for when they'll start making money.

Rivian stock closed down 6.8% at $9.57, breaking below the key psychological level of $10 for the first time since going public in November 2021. Lucid stock was down 5.7% at $2.50, also its lowest close ever.

Demand for electric vehicles has slowed since late 2023. Automakers across the board — whether Tesla Inc. Or older car companies like Ford or General Motors – in lowering the prices of their cars in an attempt to boost sales. Tesla's recent first-quarter deliveries, which significantly lagged behind expectations, suggest the industry may not be out of the woods yet, and more price cuts may be on the horizon.

Ford's latest plans further fuel these concerns.

“Reports that Ford is cutting prices on the F-150 Lightning EV are sending shockwaves through the electric vehicle market, particularly impacting Rivian and Lucid,” said Bloomberg Intelligence analyst Steve Mann. “Both startups face challenges that could be exacerbated by another round of EV price cuts, which could erode profit margins and cash reserves at a time when they need to conserve cash.”

(Update inventory movements in the first and third paragraphs.)

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