Elon Musk warns rivals Lucid and Rivian that unless they slash costs they’re going bankrupt
“Unless something changes significantly with Rivian and Lucid, they will both go bankrupt,” he said in the second part of an interview with podcasters Tesla Owners Silicon Valley and The Kilowatts posted on Tuesday.
An essential part of the problem in Musk’s view is that the two are competing in an industry where generally speaking very little profit is made on a new car, with the bulk of earnings coming from the lucrative aftermarket business.
An essential part of the problem in Musk’s view is that the two are competing in an industry where generally speaking very little profit is made on a new car, with the bulk of earnings coming from the lucrative aftermarket business.
Nowhere were Rivian's missteps more obvious than in the disaster around its failed attempt to jack up the prices on existing reservation holders, most of whom had been waiting for delivery for well over a year. Within 48 hours, CEO R.J. Scaringe reversed course and admitted that destroying hard-earned goodwill in the blink of an eye was his biggest blunder yet.
Perhaps more troubling, while both $Rivian Automotive (RIVN.US)$ and $Lucid Group (LCID.US)$ lack scale and even though their production is a tiny fraction the size of $Tesla (TSLA.US)$ , their costs in some cases can be just as high. For example, $Tesla (TSLA.US)$ posted operating expenses of $2.2 billion in the fourth quarter, barely any higher than the $2.1 billion reported by Rivian during the period.
Musk didn't pull his punches: “My advice to $Rivian Automotive (RIVN.US)$ would be to cut costs immediately across the board dramatically or they’re doomed.”
Perhaps more troubling, while both $Rivian Automotive (RIVN.US)$ and $Lucid Group (LCID.US)$ lack scale and even though their production is a tiny fraction the size of $Tesla (TSLA.US)$ , their costs in some cases can be just as high. For example, $Tesla (TSLA.US)$ posted operating expenses of $2.2 billion in the fourth quarter, barely any higher than the $2.1 billion reported by Rivian during the period.
Musk didn't pull his punches: “My advice to $Rivian Automotive (RIVN.US)$ would be to cut costs immediately across the board dramatically or they’re doomed.”
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