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The latest earnings reports from Rivian Automotive (NASDAQ:RIVN) and Lucid Group Inc (NASDAQ:LCID) made two things clear. The first is that pure play EV makers are continuing to struggle, burning a ton of cash along the way. The second is that having wealthy backers makes the difference between survival and bankruptcy, the latter being the one that the wealthy-backer-free Fisker declared in June.
Rivian is already seeing supply chain tailwinds from its planned $5 billion joint venture with Volkswagen (OTC:VWAGY) that was announced in June. The partnership gives Rivian the opportunity to scale beyond its product line and benefit from Volkswagen, more precisely its portfolio and strength. Thanks to the Volkswagen relationship, Rivian is also expected to gain more favorable pricing from suppliers and therefore, thanks to Volkswagen, Rivian will be able to also save on hardware components.
Rivian remains laser-focused on reducing the costs of making its R1 while it continues to source materials for the forthcoming R2, whose production is set to kick off in 2026. In what its CEO RJ Scaringe named a “pivotal operational event,” Rivian retooled its manufacturing plant in Normal, Illinois during the second quarter, which is said to have contributed to a 30% improvement on the R1 line rate, achieving gross cost per vehicle of $33,000, which is $10,000 down from 2023’s comparable quarter cost.
During the company’s Q2 earnings call, Rivian reported a 41% improvement in its cash flow from operations compared to the first quarter, but still lost a staggering $1.46 billion, which is $300 million worse compared to last year’s quarter. Although the securities filing shows that Rivian projects a net loss of $2.7 billion in 2024, Rivian is also targeting to reach its first-ever positive gross margin before 2024 comes to a close.
Also for the second quarter, Lucid Group reported a net loss of $643 million which is a slight improvement compared to 2023’s quarter when the luxury EV maker reported a loss of $764 million. But, thanks to its majority shareholder bringing in an additional $1.5 billion, Lucid secured the extension of its lifespan.
Without ICE or hybrid vehicles to fall back on, Rivian and Lucid are feeling the EV cooldown way more than legacy automakers like Toyota Motor (NYSE:TM), General Motors (NYSE:GM), Ford Motor (NYSE:F) and others. But, even the mighty Tesla Inc (NASDAQ:TSLA) is racing to refresh its ageing lineup with an affordable EV. Rivian is doing the same with the R2 and Lucid is going the same with the Gravity SUV. With these novelties, Lucid, Rivian as well as Tesla hope to attract new customers. Even the mighty Tesla needs to spark some fresh EV enthusiasm.
Meanwhile, innovations on the EV front keep on coming.
Worksport Ltd. (NASDAQ:WKSP), a U.S.-based manufacturer and innovator of hybrid and clean energy solutions for light trucks will expand its market presence this summer with an innovative power duo COR & SOLIS, or more precisely, their alpha release. With a solar-powered tonneau cover SOLIS and a portable battery system COR, Worksport promises to do much more than enhance the range of electric pickups, as it brings off-grid power on the go, opening many new opportunities with General Motors, Ford Motor and Stellantis pickups, even Tesla, whose long-awaited Cybertruck came with many challenges. To enhance investor engagement and transparency, Worksport announced a Q&A portal ahead of its upcoming Q2 2024 earnings call. Scheduled for August 13th, 2024, at 4:30 p.m, Woksport management will use the call to provide a detailed overview of the second quarter financial results and guidance, along with the sales trajectory, key product launches, and future plans.
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