Shares of electric vehicle startups Rivian Automotive Inc. and Lucid Group Inc. closed at all-time lows Thursday after Ford Motor Co. slashed prices on its electric pickup truck.
The industrywide price war on electric autos is a major concern for investors, since it weighs on margins. For unprofitable startups, like Rivian and Lucid, it threatens to further delay the timeline for when they will start to make money.
Rivian closed down 6.8% at $9.57, slipping below the psychologically key $10 level for the first time since it went public in November 2021. Lucid fell 5.7% at $2.50, also its lowest close ever.
Demand for EVs has slowed down since late 2023. Carmakers of all stripes — be it EV giant Tesla Inc. or legacy auto companies like Ford or General Motors Co. — have started to lower prices on their vehicles in an effort to boost sales. Tesla’s recent first-quarter deliveries, which lagged significantly behind expectations, suggest the industry may not be out of the woods yet, and more price cuts may be looming.
Ford’s latest plans are further fueling those concerns.
“Reports of Ford reducing prices for the F-150 Lightning EV are sending shockwaves through the EV market, particularly affecting Rivian and Lucid,” Bloomberg Intelligence analyst Steve Man said. “Both startups are facing challenges that could be exacerbated by another round of EV price cuts, potentially eroding their profit margins and cash reserves at a time when they need to conserve cash.”