Fisker CEO Henrik Fisker. Mario Tama/Getty Images
Tesla competitors Rivian, Lucid and Fisker were on the rise a few years ago. With growing investor interest, electric vehicle manufacturers had large market capitalizations and spoke of a bright future.
Today things look far less promising. The electric vehicle sector is facing a slowdown in growth and even market leader Tesla has warned of difficult months ahead. For its less established competitors, “challenging” isn’t quite enough.
Last month, Rivian announced a disappointing quarter and outlook and said it would reduce its workforce by about 10%. Its market capitalization has fallen to $11 billion from a high of $153 billion in 2021.
Gene Munster, managing partner of Deepwater Asset Management, this week addressed the idea of Apple – which recently canceled its own EV project – buying Rivian, citing its low valuation. Apple “needs to move into a new market,” he told CNBC. “They need to do something big, and Rivian might be the answer.”
This would of course be an unusual step for Apple. Headphone maker Beats Electronics' most expensive acquisition to date was worth $3 billion in 2014. Amazon, which buys delivery trucks from Rivian, is the electric vehicle maker's largest shareholder, with about 16% of the hardest-hit shares.
Last month, Musk said of Rivian: “They have to cut costs massively, and the leadership team has to stay in the factory or they die.” He suggested the company had about six quarters left before going bankrupt.
A “general slump in electric vehicles”
Meanwhile, Lucid's market cap has fallen from a high of $91.4 billion in 2001 to $7.6 billion today. Last month it said it would only build about 9,000 electric vehicles this year – well below the 90,000 it forecast for 2024 three years ago. Its troubles led to speculation last year that Saudi Arabia's sovereign wealth fund, which owns about 60% of the electric vehicle maker, would take over the rest. That didn't happen.
Fisker's market capitalization is $258 million, down from $4.1 billion in 2021. Last month, the company received a non-compliance notice from the New York Stock Exchange as its stock averaged 30 consecutive trading days closed below $1. And the National Highway Traffic Safety Administration is investigating claims of “unintentional vehicle movement” in Fisker's Ocean SUV, which recently received a highly publicized poor review from influential YouTuber Marques Brownlee (aka MKBHD).
Portal reported this week, citing unnamed sources, that Fisker is in advanced talks with Nissan about a partnership – and a financial lifeline. Under the agreement, the Japanese automaker would invest $400 million in Fisker's truck platform and build its planned Alaska pickup starting in 2026.
“I believe we have a future – otherwise I wouldn’t be here,” said Fisker CEO Henrik Fisker told Yahoo Finance this week declined to directly address the Nissan matter. “And I think we'll be able to get out of this, I would say, general electric vehicle slump that's out there.”