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Elon Musk crushes competition: Inside Tesla's dominance over struggling Rivian and Lucid


elon musk, electric cars, lusic, rivian, financial news

In the latest round of quarterly financial disclosures, many companies have shared their performance data, including prominent electric vehicle (EV) manufacturers Tesla, Rivian, and Lucid. While Tesla appears to be the outlier in successfully navigating the market, the reports suggest that other EV manufacturers are not performing as well.


Elon Musk, Tesla's CEO, has been openly critical of his competitors, suggesting they lack a viable place in the EV market. This sets the stage for a competitive landscape where Tesla leads while others struggle to find their footing.


Rivian and Lucid, both seen as direct competitors to Tesla, have also released their quarterly reports. These documents reveal significant financial challenges, particularly in terms of high cash burn rates, a common issue in the capital-intensive automobile industry.



Despite efforts to scale up and compete, Rivian, in particular, remains unprofitable, indicating the difficulties new entrants face in the EV market.


Rivian's financial situation seems especially precarious. For the first time, the company reported a billion-dollar turnover in the fourth quarter of the fiscal year 2023, but it still recorded a significant loss. The loss per share (EPS) was even higher than what market analysts had anticipated. This underperformance, despite reaching a milestone in turnover, highlights the challenges Rivian faces in balancing growth with profitability.


Lucid Motors, another Tesla rival, has not fared any better in the competitive landscape. Their situation appears even more challenging than Rivian's, with lower revenues and increasing losses. The fourth quarter of 2023 saw a substantial drop in revenue compared to the previous year, and their loss per share also increased. Despite the losses being slightly lower than analysts' expectations, the overall financial health of Lucid Motors remains a concern.



Elon Musk, known for his outspoken nature, took to a social media platform to comment on the struggles of these two EV startups. His remarks are not new; Musk has previously questioned the viability of these companies. However, his recent comments suggest a slightly more favorable view of Rivian compared to Lucid Motors as we read in Bloomberg.


He acknowledged Rivian's product design but emphasized the difficulty of scaling up production in the automotive industry, suggesting that mastering mass production with positive cash flow is the real challenge.



Musk's comments on Lucid Motors were far more critical. He derisively referred to Lucid's financial backing from Saudi Arabia, implying that the company's survival is heavily reliant on this external support.


This criticism points to Lucid's financial dependence on the Saudi Arabian state wealth fund, which holds a significant stake in the company. Additionally, Musk's comments about Lucid's recent capital raise and its manufacturing presence in Saudi Arabia underscore the geopolitical and financial complexities surrounding EV startups.


01.03.2024



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