Automotive Hot News

Automotive News: EV makers are still bleeding gallons of red ink (Update)

Posted by AR1 staff

China Joe Biden has thrown EV manufacturer Rivian a government bailout to prevent them from going out of business because they believed his Green New Scam.

Rivian, a “government unicorn” has been bleeding red in profusely since Day 1.  Despite  giant government subsidies, Rivian lost about $4 billion on the 37,396 vehicles it has sold during the first nine months of this year. That’s $107,043 a vehicle. Ford loses only about $51,000 on each EV sold.

But unlike traditional auto makers, Rivian can’t use profits from gas-powered cars to subsidize EVs. Thus the company is rapidly burning through cash. It has suffered repeated assembly disruptions and had to recall vehicles to fix defects. It has $1.25 billion in debt due in 2026, so its current spending pace is problematic.

Enter China Joe

Enter the corrupt ‘China’ Joe Biden DOE, which on Monday awarded Rivian the $6 billion loan to build a factory in Georgia with the capacity to make 400,000 SUVs and crossovers. This follows Illinois Gov. J.B. Pritzker’s pledge this spring of $827 million in state “incentives” for Rivian to expand production at an Illinois plant to 215,000 vehicles a year.

They believe in an EV field of dreams as touted by the Green New Scam. But even if Rivian scales up and builds all these EVs, there’s no guarantee someone will buy them. Rivian’s sales fell in the last quarter, which it attributed in part to a “more challenging consumer environment.” It’s right about that. Traditional automakers are having to slash prices to sell EVs to meet government mandates.

The DOE loan program is supposed to help promising startups. But the Biden team is financing a struggling company with a known credit risk that is competing in a well-developed auto industry. Rivian’s debt maturing in 2026 carries an effective interest rate of 12%, but DOE is lending to it at the Treasury rate. In China Joe’s administration, corruption knows no bounds, and it’s likely 10% comes back to the ‘Big Guy’ in kickbacks

As a result, they are losing their shirt on every one of them. To make matters worse, incoming USA President Donald Trump is expected to eliminate the $7,500 government “voodoo economics” handout for every EV sold. Without it, EV sales are expected to tank.

February 25, 2024 

Everyone auto manufacturer except Tesla are bleeding gallons of red ink on EVs as the majority of consumers shun them.

Here are some of the latest headlines:

How long before Rivian goes belly up?

Rivian Automotive Inc.’s shares fell the most on record after the electric-vehicle maker issued a disappointing production forecast and announced another round of job cuts.

Rivian intends to lay off 6 percent of its workforce, CEO R.J. Scaringe said in an email to employees on Wednesday. Rivian is estimated to have 14,000 employees. While apologizing to staff for implementing the job cuts, Scaringe insisted that the company needs to prioritize profitability and production. He did not provide a timeline of when the layoffs would take place. The firm intends to hold a meeting for workers on Friday to discuss the matter.

“Continuing to improve our operating efficiency on our path to profitability is a core objective and requires us to concentrate our investments and resources on the highest impact parts of our business,” Scaringe wrote in the email seen by The Epoch Times. “The changes we are announcing today reflect this focused roadmap.”

California-based Rivian has been losing money on the cars it manufactures. According to a report by Reuters, the cost of goods sold for Rivian was around 220,000 per car versus the average selling price of 81,000 in the third quarter.

The company has been forced to reduce its production target. In a bid to conserve cash, Rivian shelved plans to build delivery vans together with Mercedes in Europe.

“They’re bleeding cash and would like to grow at a much faster rate, but they continue to struggle with their EV production ramp and have been unable to meaningfully drive down unit costs … We think that is what’s behind this decision,” said CFRA research analyst Garrett Nelson about the job cuts, according to the outlet.

Mercedes won’t go all-electric by 2030, and maybe never

Mercedes-Benz is pumping the brakes on its electrification strategy.

The Germany luxury marque is pushing back its plans to go all-electric by 2030, according to Reuters. The company also wants everyone (but, specifically, investors) to know that it will continue to build vehicles with combustion engines well into the next decade.

The Robb Report writes, “Back in 2021, Mercedes, like so many of its peers, was feeling pretty good about the future of the EV. That year, the company committed €40 billion, about 43 billion, to a strategy that would see it phase out the combustion engine so that it was only selling EVs by the end of the decade. The plan was ambitious but seemed doable for a company that was launching the EQ lineup, which was made up solely of EVs. It was also a sensible proposal considering the E.U. had announced that it would ban the sales of new gas and diesel vehicles by 2035.

Some Democrat run USA states followed suit, but now all are realizing the folly of their ways.

It’s also clear that the plan to phase out purely gas- and diesel-powered cars is on hold for the time being. CEO Ola Kaellenius, who began planting the seeds of Thursday’s announcement late last year, said the brand remains committed to combustion engines. The executive said that the marque is working on updates of these vehicles, elaborating that, “It is almost like we will have a new lineup in 2027 that will take us well into the 2030s.”

Companies like Ford and General motors have also announced adjustments to their electrification plans.

Porsche Taycan Turbos lost 100K in value in 4 years

Depreciation is hitting EVs harder than most other vehicles. A combination of technology upgrades, price fluctuations on new cars, and lack of demand has meant a rapid drop in value for many electric models. This phenomenon is especially dramatic for Porsche’s Taycan EV, with high-spec Turbo models losing almost 100,000 in value within four years.

Porsche decided to launch the model with the top-of-the-range Turbo and Turbo S EV versions with starting prices of 151,000 and 185,000 respectively, and that is before you start checking off all the option boxes. Many uninformed liberals plucked down over 200,000 for their Taycans.

There is an updated Taycan on its way for 2025 that will provide even more power and faster charging, but this upgrade comes at a price with MSRPs starting at 101,395 for a “base” spec all the way up to the Turbo S Sport Turismo with a sticker price of 213,695.

A Porsche Certified 2020 Turbo with just under 15,000 miles has a current asking price of 89,998 and an original MSRP of 179,630. That’s a drop of 89,632.

A Porsche Certified 2020 Turbo S with 21,635 miles has a current asking price of 105,900; it had an original MSRP of 206,950. That’s a depreciation drop of 101,050.

Another 2020 Turbo S model with 24,265 miles and an asking price of 112,890; the original MSRP was 222,770. That is a drop of 109,880. More at Jalopnik

EV Stock Prices Tank

% Below High

Li Auto LI: -25%
BYD BYDDF: -44%
Tesla TSLA: -53%
XPeng XPEV: -88%
Polestar PSNY: -90%
NIO NIO: -91%
Vinfast VFS: -93%
GreenPower GP: -94%
Rivian RIVN: -94%
LionElectric LEV: -95%
QuantumScape QS: -95%
Lucid LCID: -95%
Fisker FSR: -98%
Nikola NKLA: -99%
Canoo GOEV: -99.4%
Lordstown RIDEQ: -99.7%
Proterra PTRAQ: -99.95%
Arrival ARVLF: -99.95%
Faraday FFIE: -99.99%