Cash Reserves Continue to Dip Dangerously for United States EV Startups
As Tesla slashes prices and continues to cement itself as the primary player in the electric vehicle world, multiple U.S. electric vehicle startups could be in big trouble. Citing reduced options for funding and production capacity concerns, several public electric vehicle companies have watched their market valuations and cash reserves plummet in recent months.
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As #electricvehicle demand starts to level off and slow, it's fast becoming crunch time for these American startups.
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According to a Visible Alpha estimate,
Rivian Automotive (RIVN.O) will report a cash reserve drop of 6.8%. Visible Alpha also estimates that Lucid Motors Group (LCID.O) will report a 36% sequential cash reserve slide -- a massive red flag that could be a death knell in the coming months.
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Nicola Tech (NKLA.O) and Fisker . (FSR.N) are expected to report cash reserve respective decreases of 15% and 5%, and the 亚马逊 -backed @AMZN.O firm will likely see its shares decline sharply with a loss of $1.75 billion this quarter. That's a big hit, considering AMZN.O shares have already tanked nearly a quarter in 2023.
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"Any company that's losing money with a low valuation is toast, and EVs are no exception," Great Hill Capital chairman Thomas Hayes said. “I think it is just a slow bleed. Maybe they'll get lucky and some of their technologies may be bought by bigger players.”
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The declining cash reserves of U.S. startups are part of a global trend. UK EV startup Lordstown Motors (RIDE.O) is considering bankruptcy as funding issues continue. Arrival SA is merging with Kensington Capital Acquisition Corp (KCGI.N) in a desperate bid to raise its cash reserves.
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Tesla's iron grip on the EV industry is causing brands like Rivian and Lucid to scramble, going so far as to withhold reservation numbers in a move that CFRA Research analyst Garrett Nelson calls a "disturbing development."
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"What we've seen is a trend of less transparency in the reservation count, but overall competition is a big problem," Nelson said.
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Which startups will stay afloat as the quarters roll on? Which EV companies will fold, and which will merge? As cash reserves drop across the board, an EV industry shakeup appears inevitable and imminent.
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Keep your finger on the pulse of the EV revolution.