How US EV startups are navigating through weak demand

Fisker Automotive is the latest electric-vehicle start-up company to go belly up and it sought Chapter 11 bankruptcy protection on Monday citing fundraising problems, low rates of sales, and management of supply chain and distribution. Facing a continued lack of demand for the Ocean electric SUV, Fisker axed jobs, halted capital expenditures to save money, and engaged dealers to increase demand for its vehicles. Although attempts were made to obtain an investment from a major automobiles company, the company was unable to fund its operations.

Other new EV startups in the United States have been implementing strategies that they can use in this case. For instance, Rivian Automotive slowed manufacturing procedures this year to consolidate applications toward reducing expenditures and achieve profit targets. Rivian also targeted demand and executed supply with the second generation of vehicles equipped with new drive units, software, and reducing the number of components. Like Tesla, Rivian did not engage in price cuts throughout the year and in February, it released cost-effective versions of its cars.

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The North America based electric car manufacturer and technology company, the Lucid Group has recently announced its plan to let go of up to six percent of its workforce; the company has noted a reduction in its revenue for as many as six straight quarters. To stimulate demand, the company reduced the base price of Lucid Air Pure model and gave customers freebies including preventive maintenance and charging credits. In the long-run, Lucid intends to start producing their Gravity SUV at the end of this year at USD 80,000 a unit and a mid-size car in late 2026 for USD 50,000 a unit.

Initially, Nikola was facing problems in production and sales of battery-electric trucks, and now it is focusing on hydrogen-fuel cell Class 8 trucks. Nonetheless, it eradicating 29 USD from the cash reserves while declaring 345 USD. generate USD 300 thousand in Q1 of the current fiscal year and envisioning to sell up to 450 trucks for USD 170 million by 2024, including HFCET.

These measures are observed to be strategic to EV startups to adapt to market realities of subdued demand and high competition to map ways to cut costs, improve products and effectively manage resources as witnessed in the EV industry.

(with inputs from Reuters)