Rivian and Lucid’s struggles in 2022 signal a tough 2023

Rivian and Lucid’s struggles in 2022 signal a tough 2023

Rivian and Lucid’s struggles in 2022 signal a tough 2023

  • Rivian and Lucid struggled to live up to expectations in 2022.
  • Lucid only delivered 61% of cars built last year.
  • Investors will have less patience for disappointing results in 2023.

Fourth-quarter results from Rivian and Lucid show EV newbies have had a harder time producing vehicles by the end of 2022 — and the gap between the vehicles they make and the vehicles they put in the hands of customers is widening.

Lucid produced 7,180 vehicles in 2022, it reported in a recent statement, exceeding its production target for the year (which it had cut twice). Rivian produced 24,337 vehicles last year, the company said, missing its forecast of 25,000.

The results from Rivian and Lucid herald a tough year for electric vehicle startups, said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions.

“We are entering a period where it will be harder for these businesses to get the financing they need to continue,” Fiorani told Insider, referring to tougher market conditions as interest rates rise. . “As an investor, you’re going to be on the lookout for any signs of trouble, because you’re now expecting a bigger return on your investment.”

Lucid was initially aiming to build 20,000 vehicles this year, then narrowed that to a range of 12,000 to 14,000, before narrowing it again. These figures indicate that in 2022, Lucid only delivered approximately 61% of the cars manufactured to customers.

Rivian and Lucid’s results came just after Tesla also missed analysts’ expectations for its fourth-quarter delivery results – and that has investors worried. Tesla has the advantage of establishing itself in boom times to invest in risky bets like car startups. Rivian and Lucid rise in power at a more uncertain time.

“If you have the momentum of an established player,” Fiorani said, “you’ll have the inertia you need to keep moving forward. But given the risky economic situation, buyers aren’t willing to bet on a largely unknown company.”

Production and delivery gaps widen

Interestingly, Lucid’s production ramp-up worsened from Q3 to Q4.

The company’s reports indicate that it made more progress between the second and third quarters in terms of ramping up than it did between the third and fourth quarters, and its delivery progress reflects this.

In the second quarter, Lucid delivered approximately 96% of the approximately 700 vehicles it built. In the third quarter, the startup only delivered 61% of what it had built and in the fourth quarter, it had only delivered 55% of the 3,493 vehicles it had built in the last three months of the year. ‘year.

Meanwhile, Rivian’s fourth-quarter figures – delivering around 80% of the 10,020 vehicles it built – also showed less progress from the third quarter than between the second and third quarters. Previously, Rivian delivered more vehicles than it built in the second quarter (taking into account vehicles built before the quarter that did not make it to customers), but only delivered about 89 % of what it built in the third quarter.

Still, Rivian’s build-to-delivery gap remains less extreme than Lucid’s — the company sits at around 84% full-year delivery rate, down slightly from an estimated 86% for the top nine. months of the year.

That’s likely only delaying revenue for Rivian and Lucid, since the vehicles they build are promised to buyers rather than sent to dealerships, Fiorani said.

“A big thing that’s holding both Rivian and Lucid back is just the fact that they’re really still fighting to get more states to give them permission to sell their cars outright rather than go through a franchise,” Robby said. DeGraff, industry analyst at AutoPacific. . “With newcomers like Rivian and Lucid, this is going to be a warning sign for some people to begin with.”

Maybe startups realize this. Sources tell Insider that Lucid had a big year-end push, incentivizing employees to buy its vehicles, introducing a website to sell existing inventory, bringing the cost of the Grand Touring back to its pre-price. the price increase and launching a new protocol to try to stop cancellations.

“It’s not sustainable to have all these vehicles sitting there,” DeGraff said.

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