It was always going to be difficult. Scaling up production of a new product using relatively new technology is a tall order at the best of times. Electric-vehicle startups Rivian Automotive Inc. RIVN, -0.51% , Fisker Inc FSR, -2.95% and Lucid Group Inc . LCID, +1.14% is finding that harder amid economic uncertainty, a delayed supply-chain. Concerns, rising interest rates and less patient investors. Earlier this week, Fisker and Lucid lowered their product outlook for the year. Rivian kept its 2023 production guidance intact, but did not keep critics at bay, with one analyst comparing Rivian’s path forward as “a tightrope.” See also: As Fisker cuts production, recent months serve as a reminder that the story of any EV startup, Tesla Inc. With TSLA, +2.55% is “the only confirmed success so far,” with “there will be inevitable waves (ups/downs) as investors focus on a mosaic of execution/milestones on a treacherous path to sustainable production and scale,” Chris McNally at Evercore ISI said in a recent note. Don’t miss: Lucid stock fell 9% after the EV startup dialed down production guidance, said Michelle Krebs, an analyst at Cox Automotive. Interest rates were low, investors had plenty of money, and companies seized that flow. “That money is not readily available anymore,” Krebs said. “Investors get impatient and they want to see results, and (this week’s results) are not that.” The startups also underestimated the amount of cash needed to get an EV maker off the ground, and they could run out of money at a time when it’s hard to come by, Krebs said. Legacy automakers can afford to lose money on EVs — Ford Motor Co. F, +0.29% has said it expects its EV unit to lose $3 billion this year — because they already have a steady stream of revenue from elsewhere, she said. was And, of course, Tesla “took a long time to turn around,” and nearly a decade before it was profitable. Lordstown Motors Corp. Ride, +0.11% warned last week that it could run out of cash as its relationship with Taiwanese electronics contract maker Foxconn appears to have soured. Krebs said the difficulties of launching a vehicle are not unique to electric cars, but the relatively new technology adds another layer of complexity. Ford has had recalls and issues with its Explorer SUV for years. As far as EVs, Tesla and General Motors Co. GM, +0.02% has had its fair share of recalls with their vehicles, with GM recalling every Chevy Bolt it made earlier this year to swap batteries. In March, consultants at JD Power found that recalls and service times for EVs marked the first drop in its customer-service satisfaction index in nearly 30 years. And EV owners have lower customer satisfaction with car services than owners of conventionally driven vehicles, JD Power said.
