Shares of electric vehicle startups Rivian Automotive Inc. and Lucid Group Inc. hit all-time lows after Ford Motor Co. announced price cuts on its electric pickup truck. This move comes as part of an industrywide price war on electric vehicles, causing concern among investors about its impact on profit margins. For companies like Rivian and Lucid that are already struggling to become profitable, the price war threatens to further delay their ability to generate revenue.
Rivian closed down 6.8% at $9.57, dropping below the $10 mark for the first time since its IPO in November 2021, while Lucid fell 5.7% to $2.50, marking its lowest close ever. The slowdown in demand for EVs since late 2023 has prompted automakers, including Tesla and traditional manufacturers like Ford and General Motors, to slash prices to stimulate sales. Tesla’s recent first-quarter delivery numbers falling short of expectations indicate that the industry may continue to face challenges, potentially leading to more price cuts in the future.
The news of Ford’s price reduction for the F-150 Lightning EV has sent shockwaves through the EV market, particularly impacting Rivian and Lucid. Bloomberg Intelligence analyst Steve Man warned that these startups could face even greater challenges with another round of price cuts, risking further erosion of profit margins and cash reserves. As the price war intensifies in the electric vehicle sector, companies like Rivian and Lucid will need to navigate through this tough competitive landscape to secure their future success.