We now got some numbers from Rivian and Lucid. It was not pretty. These companies are, not surprisingly, losing a fortune. This is par for the course with the automotive industry since it is capital extensive.
In this video I discuss how starts in both the US and China are facing some major headwinds.
▶️ 3Speak
This is actually very surprising to me. I thought EV companies can how low income, but I didn't expect them to be losing money. I think I have seen news that the EV incentive will be dropped soon, so they might lose even more because of that.
Summary:
In this video, the speaker discusses the challenges faced by electric vehicle (EV) startups, particularly in the United States and China, excluding established companies like Tesla and BYD. The speaker highlights the financial struggles of companies like Rivian and Lucid, pointing out the difficulty in achieving profitability due to high costs associated with scaling up production. Comparisons are made with traditional automakers like Ford and their popular F-150 line, emphasizing the competitive nature of the industry. The speaker predicts that many EV startups may not survive in the long run due to the capital-intensive nature of the business, with only a few key players like Tesla and select Chinese companies likely to dominate the market.
Detailed Article:
In the video, the speaker delves into the challenges faced by numerous electric vehicle startups, especially those in the United States and China. Notably, he excludes established companies like Tesla and BYD, focusing on startups like Rivian and Lucid. Financial performance becomes a significant area of concern, with the speaker noting the substantial losses experienced by these companies, reflecting the struggles faced in achieving profitability.
The speaker highlights that despite having significant investments, such as the backing from the Saudi government in the case of Lucid, sustaining operations for these startups remains a major issue due to continuous financial losses. Drawing a parallel to Tesla's history of loss-making before achieving profitability, the speaker emphasizes the immense costs associated with building and scaling up manufacturing facilities in the EV sector, which pose as significant barriers for these startups.
Comparisons are made between EV startups like Rivian and established giants like Ford, particularly focusing on the popular F-150 line. While acknowledging the quality of products like Rivian's pickup truck and the relatively decent sales numbers achieved, concerns arise over the ability to project higher numbers and achieve cost reduction essential for long-term sustainability.
Furthermore, the speaker contrasts the EV market with that of traditional automakers like Ford, underscoring the fierce competition and the challenges associated with breaking into the market, especially when dependent on a particular vehicle type like a pickup truck. The competitive landscape, with players like General Motors and Ford dominating the traditional automotive market, adds complexities for EV startups like Rivian and Lucid.
The speaker predicts a scenario where the majority of EV startups may not survive the next five years, attributing this to the capital-intensive nature of the industry. He suggests that ultimately, only a few key players like Tesla and select Chinese companies, such as XPeng and BYD, might emerge as dominant forces in the EV market due to their financial strength and production capabilities.
In conclusion, the speaker alludes to the future of the EV industry being centered around scaling production rapidly. This emphasis on scalability and production efficiency signifies a shift towards consolidation in the market, with only a handful of players likely to sustain and thrive in the highly competitive and capital-intensive electric vehicle landscape.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.