Electric vehicle makers burning cash, slammed by sky-high costs

Yahoo news ^ | November 14, 2022 | Akash Sriram

[dennisw]

By Akash Sriram

(Reuters) - Every time Lucid Group Inc or Rivian Automotive Inc sells an electric car, they are losing hundreds of thousands of dollars due to staggering raw material and production costs, their latest earnings statements showed.

Quarterly reports from electric vehicle (EV) makers from the past two weeks show them struggling to hit delivery targets and rapidly burning through cash.

Lucid's cost of revenue surged to $492.5 million in the July-September quarter from $3.3 million a year earlier, and its losses widened as customers canceled orders fearing long wait times.

The company, which went public a little over a year ago and is backed by Saudi Arabia's Public Investment Fund, saw its market value shrivel by two-thirds this year to about $20 billion from $95 billion at its peak in November 2021.

The company said it had enough cash to sustain itself at least into the fourth quarter of next year and is looking to raise about $1.5 billion through a stock sale. Its stock price slumped 17% after results, and clawed back some losses in the next two sessions to finish on Friday down 4.4% from before it reported.

Graphic: EV stocks slump on production pushouts, deep losses, cash bur https://graphics.reuters.com/ELECTRICVEHICLES-STOCKS/gkplwgmdzvb/Pasted%20image%201668198479064.png

U.S.-listed British firm Arrival SA warned last week it may not have enough cash to keep its business going toward the end of next year, and would have to cut jobs. It has yet to start mass production.

"I'm not going to sit here and tell you it's not a difficult time," Avinash Rugoobur, president of Britain's Arrival SA told Reuters on Friday.

"It's tough, we are there every day, every night, working on technologies, the vehicles and also the capital raising."

[Tell It Right]

Have you ever thought about how much of anything we buy was built by child slave labor? Who makes most of our phones? Our clothes? Our TV's? Our carpet? Our refrigerators?

Can you really say those are made with less than 2% slave labor?

[seowulf]

Oh, I have indeed, and I’m sure it will never disappear completely.

You just have to do a cost/benefit appraisal for whatever it is and decide if it’s worth it. Are your Chinese Uygur Nike shoes worth it.

All slavery is not equal. Some are genocide while others are survival.
The least you can do though is acknowledge it and not laugh it off.