Rivian
- Elon Musk says Rivian and Lucid are heading toward bankruptcy.
- The two electric vehicle startups recently started selling their first vehicles to customers.
- Musk said new car companies can't price their vehicles so high that they aren't affordable.
Elon Musk has a ominous warning for electric-vehicle startups Rivian and Lucid Motors: Change now, or go out of business.
"Unless something changes significantly with Rivian and Lucid, they will both go bankrupt," the Tesla CEO said during an interview published Tuesday to the Tesla Owners Silicon Valley YouTube channel. "I hope they are able to do something, but unless they cut their costs dramatically, they will end up in the cemetery like every other car company, with the exception of Tesla and Ford."
Going bankrupt doesn't always mean a car company is done for good. Chrysler and General Motors both filed for bankruptcy in 2009, as Musk often points out.
Rivian's problem, according to Musk, is that its vehicles are too expensive to achieve the kind of volumes necessary to cover its fixed costs. The company recently raised its prices to account for supply chain issues and inflation. The 2022 R1T pickup now starts at $79,500, while the 2022 R1S SUV starts at $84,500. Rivian plans to sell cheaper versions down the line.
Musk said pricing vehicles too high for people to afford is how "car companies can get painted into the corner of doom."
"My advice to Rivian would be to cut costs immediately across the board, dramatically, or they're doomed. This applies to any car company really," Musk said.
Lucid Motors
Tesla's first model, the Roadster sports car, cost more than $110,000 in 2008. Since then, Tesla has released lower-priced models, including the $47,000 Model 3 sedan, its cheapest vehicle.
After years of development, Rivian and Lucid both started shipping their debut vehicles late last year to long lists of patient reservation holders. Both impressive models have earned rave reviews. But both startups have faced problems ramping up production and have been burning through cash. They say snags in the global supply chain are to blame.
Rivian said in March that it plans to produce 25,000 vehicles this year, half its initial outlook. Lucid now says it will build 12,000-14,000 Air sedans in 2022, down from 20,000. Lucid has resorted to buying parts off of Amazon and bringing white-collar workers to the factory floor to get vehicles out to customers, Insider reported previously.
Both automakers have seen their stock plummet roughly 70% this year amid a broader selloff in the tech sector. Shares in Tesla have declined 43% this year.
Rivian and Lucid did not immediately return requests for comment.
source https://www.businessinsider.com/elon-musk-tesla-rivian-lucid-bankrupt-doomed-cut-costs-2022-6