Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Lucid Lost $670 Million Last Quarter
Lucid Group, maker of the slippery Lucid Air electric sedan, posted up some big numbers this quarter. On the revenue front, it pulled in $196 million, which trounces the $232,000 it made in the same quarter in 2021. The other big number? A net loss of $670 million, per Automotive News. Making cars is hard. The numbers are extra bleak because, as Automotive News notes, Lucid now says it’ll meet its production goals despite supply chain issues. That’s a good thing, right? Well, not when the big goal is to produce 6,000 to 7,000 cars. “The automaker’s original production goal for 2022 was 20,000 vehicles,” writes the news site. The same Automotive News piece has a quote from the company’s CEO sort of explaining what’s going on: That isn’t at all crpytic. “In fact,” Rawlinson said, “even now we are experiencing a challenge with one particular item that will lead to a very temporary timeout for the [production] line.” Rawlinson did not name the item in short supply but said the downtime would be used to implement changes that would ultimately increase production. At the moment Lucid only has the one car and, according to the company, about 34,000 total reservations. An upcoming SUV, the Gravity, is going to debut next week before the LA Auto Show.
Rivian Expected To Lose About $1.7 Billion, With A ‘B’
Electric truckmaker Rivian is poised to announce big numbers today as well, but those big numbers will be of the negative variety. In Q2 of this year the company posted a loss of $1.7 billion. What’s the guess for this quarter? According to analysts it’s about $1.7 billion. From Automotive News: This doesn’t mean the trucks aren’t good. By most accounts, the trucks are very good. The engineering that goes into them is also impressive. [Editor’s Note: If you want to read the most detailed, tech-heavy review of the R1T, check mine out. It’s a great truck. -DT]. It’s extremely tough out there for established OEMs with longstanding supply chains and Rivian is ramping up a new car and a new brand out of thin air. Making cars is hard. Has anyone seen one on their neighborhood?
Tesla Trying To Woo Chinese Buyers As Musk Sells Stock
In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock. — Elon Musk (@elonmusk) August 10, 2022 Tesla is the most established of all electric automaker startups [Editor’s Note: I think we ca stop calling it that now. -DT] and even it’s having some issues, particularly in China where deliveries have been on a roller coaster ride and competition has gotten stiffer. To try to compete in China it looks like Tesla aims to give people a break on their insurance. I’ll let Reuters explain how this works:
I Like This Weird Italian EV SUV
AEHRA (pronounced:¯_(ツ)_/¯) is a new Italian startup that’s aiming to sell a ginormous electric SUV that they call… the AEHRA SUV. The Milan-based company has Fillippo Perini as their chief designer officer and he’s got a legit resume, but there are some bonkers details in their press release about the design and basically no details about how the car is being built or powered or range so I’m just going to quote the press release:
I think I know where they’re getting at (it has funky doors), but the idea of four NBA-size players in a supercar is funny to me. Here’s a quote from Perini: Really? Someone show this dude a photo of the Cadillac Celestiq. As with all EV startups that only have renders assume it isn’t real until they actually sell one.
The Flush
Which EV car company will be the biggest EV car company in a decade: Rivian, Lucid, Tesla, or AEHRA? If you said “Tesla” then tell me how many times bigger Tesla will be than all of the others combined.
Doubtful it will be Tesla since Musk seems bound and determined to alienate anyone but those people who agree with him in lockstep. Unless they can delink themselves from him, that is.
If we’re just looking at domestic production I’ll give the nod to Tesla in a decade, but worldwide it’s going to be whichever Chinese company rules the roost.
I recently saw my first Lucid in the wild a couple of weekends ago.
But since I rarely have a commute where I don’t see at least three Teslas, I think Rivian and especially Lucid are unlikely to ever catch up to Tesla.
I’m not worried about Lucid. They’ll stick it out. They have a huge amount of runway (capital,) they have experienced auto people, they keep demonstrating wisdom in handling shortages (using forced downtime to retool,) and they’re keeping very strongly to their niche with first-mover advantage and no competition. They’re also making smart, realistic adjustments to the business plan based on that. And cutting production with better amortization of costs is a smart move. And they really have no competition. Idiots compare Lucid on the basis of ‘it’s an EV,’ which is like comparing a Ferrari to a Hyundai because ‘they have a 6 speed transmission.’ Lucid is $150k+ sub-$300k ultra-luxe; until Maybach announces theirs? There’s nobody else in that space.
“Electric truckmaker Rivian is poised to announce big numbers today as well, but those big numbers will be of the negative variety. In Q2 of this year the company posted a loss of $1.7 billion. What’s the guess for this quarter? According to analysts it’s about $1.7 billion.”
“[Tesla is] having some issues, particularly in China where deliveries have been on a roller coaster ride and competition has gotten stiffer.”
Also, because the Chinese government doesn’t like foreign automakers, and Tesla least of all. Jeep pulled out because the government was basically going to make it untenable. Everyone has pulled way back and gone back to severely restricting IP. Tesla got too big for Winnie the Pooh, and keeps trying to thumb their nose at him. And buyers saw the absolutely horrific abuse Muskovite inflicted on the employees during lockdowns. The government made sure of that. The roller coaster ain’t got much track left.
“AEHRA (pronounced:¯_(ツ)_/¯) is a new Italian startup that’s aiming to sell a ginormous electric SUV that they call… the AEHRA SUV. “
It’s pronounced ‘I have a tiny penis and far more money than intelligence.’ Glad I could help clear that up.
Which EV car company will be the biggest EV car company in a decade: Rivian, Lucid, Tesla, or AEHRA?
Toss-up between Rivian and Lucid. Rivian might make it as a vocational builder, and there’s obviously a lot of money in that. Frank Klein shows that’s the way they’re being forced to lean. See also their JV with Daimler in Europe to build a vocational van factory. But they need to fire Scaringe and hire more Kleins, or they are not going to survive. Lucid has really taken ownership of their niche, but it’s a very small TAM. Again: look at a Lucid as you would a Maybach. It’s not a Rolls Royce, but it’s above a Mercedes. People buying Lucids don’t have anything to cross-shop, and that’s not going to change significantly. They won’t be losing a significant number of $150-185k sales to Rolls ($450k+) or Cadillac ($300k+.) But the margins are extremely healthy, especially if they can get long amortization.
Isn’t that Cadillac flagship EV also in the monopoly money range?
Ol’ Musky is going to be too volatile for the board and his Twitter boondoggle if going to see him sell off a healthy amount of stock. Tesla itself has valuable IP and an established presence basically everywhere. If I was a Chinese billionaire I’d be snapping it up.
It’s been interesting to watch Munro tear down the Rivian on their YouTube channel. There seems to be a lot of weirdly expensive design mistakes. On most cars they’re pointing out shortcuts that had to be taken for budget or time reasons, on the Rivian they’re often pointing out excessively complex parts that required a lot of engineering time and are expensive to produce, but don’t seem to provide any meaningful benefit over a much simpler option. It’s almost like Rivian is a German carmaker. 😉
…but do you know who has a century worth of brand cache? Mercedes Benz, and they have an entire range of EVs trickling out. The three pointed star means something to a lot of people, and if Tesla continues to lag on updating their cars I think the conspicuous consumption crowd is going to matriculate that way.
Teslas look old, and owning one isn’t remotely a flex anymore. The Roadster and Cybertruck are still vaporware, but even if they weren’t, they’re just two more big-dollar niche machines.
I expect every brand will beat Tesla to the punch with affordable EV models, and will be unsurprised if Musk immolates himself with bad decisions and public buffoonery. “Oh well.”
Or it could just be Elon’s habit of announcing things by tweet before the engineers and hardware crews have the chance to even start figuring out how to make it happen.
That’s easy… the answer is Tesla. They have a huge head start, they are self-sustaining from a profit perspective and they have the production capacity… not just for assembling vehicles, but for a lot of other stuff that supports vehicle assembly like a sufficient battery cell supply.
The other 3 companies are nowhere near breaking even… and won’t any time soon. And there is a good chance that one or two of them will go insolvent at some point.
Mugsy Bogues Spud Webb Nate Robinson Earl Boykins
the biggest EV manufacturer in 10 years will probably be Kia as long as the dictaturd to the north of them does not set off a nuke.
No matter what you think about the CEO, they’re executing pretty well.
Okay, I don’t actually have a serious answer, though I suspect the legacy automakers may successfully pivot and eat up a lot of market share. The EV landscape will probably look a lot different in ten years.
