In a recent analysis, it has been concluded that America's small electric vehicle (EV) makers are facing a deteriorating situation. This is due to factors such as diminished cash, troubling sales trends, and the expected policies of the incoming administration. The Wall Street Journal's in-depth study focuses on Rivian Automotive Inc. (NASDAQ: RIVN), Lucid Group Inc. (NASDAQ: LCID), and Canoo Inc. (NASDAQ: GOEV). While these companies have received some recent funds, there have been sharp decreases in their 2022 cash balances. The question arises whether each company has enough capital given their extremely small sales, which may take years to reach a break-even point on a cash basis.

Unraveling the Challenges and Opportunities in the Electric Vehicle Industry

Which EV Makers Are Hurting

The spotlight is firmly on Lucid and Rivian. These two companies stand out as they are well-known in the industry. The analysis shows that although they have received funds, their cash positions have weakened. For example, Rivian and Lucid have seen significant drops in their 2022 cash balances. This raises concerns about their ability to sustain operations and grow in the highly competitive EV market. At the same time, Chinese EV companies led by BYD have made inroads in Europe, despite tariffs blocking them from the U.S. market. These companies typically have strong balance sheets and often receive financial support from the Chinese government. Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) have yet to achieve significant success with their EV products in America, but they have the financial strength to continue investing. Tesla Inc. (NASDAQ: TSLA), on the other hand, dominates the U.S. market with 49% share and its stock has seen a significant increase since the election, partly due to Elon Musk's relationship with Donald Trump.

While the Wall Street Journal analysis covered a dozen EV and EV battery companies, Lucid and Rivian received the most attention. This is likely because their failures would have a significant impact on the industry. Their positions in the market and the challenges they face highlight the complexity and volatility of the EV industry.

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