(Reuters) – U.S. electric-vehicle startups are turning to cheaper models, screeching halts to plans to ramp up production and laying off workers to weather sagging demand caused by high borrowing costs and expensive vehicle repairs.
Fisker (OTC:) filed for bankruptcy on Monday, becoming the latest electric-vehicle startup to succumb to financing difficulties, production hurdles and distribution challenges.
Here’s how EV startups are trying to weather weak demand.
Fisker
Fisker, hit by a rapid cash burn selling its Ocean SUV in the United States and Europe, is considering selling assets and restructuring debt.
The company’s Ocean SUV is under investigation by the National Highway Traffic Safety Administration for safety-related accidents.
Earlier this month, the company recalled more than 18,000 vehicles in North America and Europe due to software defects and safety failures.
Fisker issued a going concern warning in March, announcing it would lay off 15% of its workforce and pause investment in future projects until it could secure a manufacturer partnership.
Reuters reported that Nissan Motor Co. (OTC:) is in talks to invest in Fisker, a deal that would give Nissan access to electric trucks while also providing a financial boost to the struggling startup.
Demand for Fisker’s flagship electric SUV, the Ocean, has been sluggish: The company plans to produce more than 10,000 in 2023, but has only delivered around 4,700.
The company ended 2023 with cash and cash equivalents of $325.5 million, down from $736.5 million in 2022.
Rivian Automotive
Earlier in June, Rivian (NASDAQ:) unveiled its second-generation R1T pickup truck and R1S SUV with new drive units and other components that will boost efficiency and reduce costs.
Rivian unveiled smaller, cheaper electric vehicles, the R2 SUV and R3 crossover, in March and plans to start producing the R2 at an existing U.S. factory for faster deliveries in the first half of 2026.
The move comes just weeks after the company said it planned to halt production for several weeks this year to refurbish factories and cut costs.
The company expects to produce 57,000 cars in 2024, well below its forecast of 81,700, and far short of the 1.8 million cars Tesla (NASDAQ:) expects to deliver in 2023.
Rivian refrained from lowering the prices of its vehicles last year, but in February introduced a lower-grade option on existing models that was $3,100 cheaper.
The startup is focusing on reducing its cash burn by renegotiating supply contracts and making some parts in-house. Rivian posted cash and cash equivalents of $5.98 billion in the first quarter, up from $7.86 billion in the fourth quarter.
Lucid Group
Lucid Group (NASDAQ:) said in May it would cut its U.S. workforce by 6% as slower-than-expected growth in demand for electric vehicles hinders its path to profitability.
Lucid, in which Saudi Arabia’s Public Investment Fund holds more than 60% of the shares, is its largest investor, and plans to start producing a more affordable mid-size car in the second half of 2026 and the Gravity SUV later this year to attract a wider customer base.
The company, which has missed analysts’ revenue estimates for six consecutive quarters, has lowered the price of the Lucid Air Pure to $69,900 and is offering two years of free scheduled maintenance and charging services as an incentive.
Lucid in November unveiled the Gravity SUV, which will sell for under $80,000 and is due to start production later this year.
The company has said it aims to start production of a cheaper mid-size car in the second half of 2026, priced around $50,000, to compete with Tesla’s Model 3 and Model Y.
Lucid ended the first quarter with cash and cash equivalents of $2.17 billion, down from $1.37 billion in the fourth quarter last year.
Nicola
Nikola (NASDAQ:) is pivoting to hydrogen-powered heavy-duty trucks after some of its battery-electric trucks caught fire in August, forcing a recall.
The company expects truck sales to reach up to $170 million in 2024 and is targeting sales of 450 vehicles this year, including hydrogen fuel cell electric trucks.
Nikola ended the first quarter with cash and cash equivalents of $345.6 million, down from $464.7 million in December.
