Tesla CEO Elon Musk on Wednesday shared his perspective on rival EV makers Rivian Automotive Inc RIVN and Lucid Group Inc LCID after they reported quarterly earnings.
What Happened: Regarding Lucid’s fourth-quarter earnings results, Musk remarked, “Their Saudi sugar daddy is the only thing keeping them alive,” in reference to the substantial investment from Saudi Arabia’s Public Investment Fund (PIF), which has injected about $5.4 billion into Lucid since 2018, with a $1.8 billion investment in the second quarter of last year alone, making the sovereign fund Lucid’s majority owner.
In another post, Musk added that the company’s current market cap is “the option value of a Saudi take-private.” Lucid’s market cap as of last close is at $8.43 billion, dismally small as compared to Tesla which has a market cap of $617.09 billion.
For the fourth quarter, Lucid reported revenue of $157.2 million, which missed the consensus estimate, and a better-than-feared loss of 29 cents per share.
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Rivian In Troubled Waters? As for Rivian, Musk said the company’s current trajectory “looks like it is gearing up for bankruptcy in about six quarters.”
“Maybe that trajectory will change, but so far it hasn't,” he added.
“Their product design is not bad, but the actual hard part of making a car company work is achieving volume production with positive cash flow,” Musk said of the company.
Rivian reported total revenue of $1.3 billion for the fourth quarter and a net loss of $1.52 billion. The company ended the quarter with $9.37 billion in cash and cash equivalents, with a total liquidity of $10.47 billion, including an asset-based revolving credit facility.
Why It Matters: This isn’t the first time Musk has predicted the financial difficulties of these companies. In June 2022, he warned of potential bankruptcy for Rivian and Lucid due to their substantial spending, stating, “Unless they cut their costs dramatically, they are in deep trouble and will end up in the cemetery like every other company (automotive) with the exception of Tesla and Ford.”
Lucid has been making strides with motorsport partnerships and the introduction of its new Gravity SUV, and it has issued full-year production guidance of approximately 9,000 vehicles for 2024. Last year, Lucid had 8,428 vehicles produced and 6,001 vehicles delivered.
Rivian is pinning its hopes on a new smaller vehicle called the R2, set to be unveiled next month. But the company, as per its latest earnings, lost nearly $43,372 per vehicle delivered in the fourth quarter — up from nearly $31,000 in the previous quarter but significantly down from the $124,000 during the same period in 2022.
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Read More: What Dented Rivian’s Q4 Margins? CFO Reveals Huge Dip In Deliveries For Prime Customer
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