Next week, electric-vehicle startups in the United States are anticipated to disclose another quarter of falling cash reserves, putting more pressure on a group of firms that are trying to ramp up production and have few choices for finance in a volatile market. Rivian Automotive is projected to announce a 6.8% loss in cash balance, while Lucid Group is predicted to report a 36% sequential decline in cash reserves. Fisker Inc and Nikola’s cash reserves are predicted to fall by 5% and 15%, respectively. “Any company that’s losing money with a low valuation is toast, and EVs are no exception,” said Thomas Hayes, chairman of hedge fund Great Hill Capital. The reduction in company values has made selling shares for cash less effective, and investors are dissatisfied.
Arrival SA, a British electric vehicle company, and Nikola have both issued going-concern warnings in recent months, with the former planning to combine with blank-check business Kensington Capital Acquisition Corp in an effort to obtain finance. Lordstown Motors said this week that it may be forced to declare bankruptcy owing to uncertainties about a finance agreement. Lordstown’s cash balance declined 11% sequentially, and several firms have stated that they will not send reservation data. This is a “disturbing development” since competitiveness is a key concern.
