Electric Vehicle Companies Nikola and Lucid Group Report Q1 Results

Electric vehicle (EV) companies Nikola Corporation and Lucid Group saw a decline in their shares today, with Nikola falling by 13.04% and Lucid by 5.58%, following the release of their Q1 results. Nikola missed sales estimates, while Lucid fell short in all aspects.

Nikola Corporation

Nikola, the electric truck manufacturer, reported a loss per share of 25 cents on sales of $11.1 million, falling short of analysts' expectations of a loss of 26 cents on sales of $12.9 million. The company concluded Q1 with $154 million in cash, having burned through $232 million during the quarter.

Although sales were slightly below expectations, Nikola appears to be increasing production of its electric short-distance truck. The company is refocusing on areas such as fuel cell-based trucks in North America, hydrogen refueling, and autonomous driving technologies, which may accelerate its cash burn rate. Consequently, the company is selling its share in a European joint venture for $35 million. About 21 million Nikola shares held by the venture partner Iveco will be returned to the company.

"We are on the right track with renewed management and trading teams, an improved sales strategy, new dealers and partners," said CEO Michael Löschler. Nikola continues to build its hydrogen fueling business, with financing mainly coming from Voltera Power, which will finance 50 gas stations over the next five years. The company expects sales of fuel cell-based trucks to begin this year, and it will continue to sell its electric trucks in a "make-to-order" format.

Lucid Group

Lucid Group reported a loss per share of $0.43 on revenues of $149.4 million, compared to analysts' expectations of a loss per share of $0.4 on revenues of $197.8 million. The company ended Q1 with $4.1 billion in liquidity, which should be sufficient until at least the second quarter of 2024.

The company produced 2,314 vehicles but only delivered 1,406 to customers. Its forecast for 2023 production is between 10,000 and 14,000 vehicles. "We are on track to produce over 10,000 vehicles in 2023, with lateral changes in the company that will allow it to produce in larger volumes as market conditions allow," said Lucid CEO Peter Rawlinson. Later this year, Lucid will unveil its Gravity electric SUV, which is set to launch in 2024.

Lucid also announced a $7,500 credit for its Air Sedans, following news that it was not eligible for the federal tax credit on electric vehicles. This move aims to boost sales. In February, the company announced 28,000 pre-orders for its Air Sedan (its only product), a decrease from 34,000 orders in November.

U.S. EV startups Fisker and Nikola missed Wall Street's estimates early Tuesday, while Rivian is set to report late Tuesday. FSR stock, NKLA stock, and LCID stock all experienced significant declines in Tuesday trade.

Lucid CFO Sherry House stated that the company's total liquidity of approximately $4.1 billion should be sufficient to fund the company until at least Q2 2024. In Q1, Lucid built 2,314 vehicles and delivered 1,406 of them. The company now expects to produce "more than 10,000" EVs this year, compared to prior guidance of 10,000-14,000 EVs.

Reservation numbers have recently fallen, indicating weakening demand. Lucid's shares tumbled 5.6% today, remaining well below the 200-day line 

after a significant decline over the past year. The electric vehicle company reported a loss per share of $0.43 on revenues of $149.4 million, which fell short of analysts' expectations of a loss per share of $0.4 on revenues of $197.8 million. Lucid produced 2,314 vehicles during the quarter but only delivered 1,406 of them to customers. CEO Peter Rawlinson stated that the company was on track to produce over 10,000 vehicles in 2023, with plans to unveil the Gravity electric SUV later this year before its launch in 2024.

Lucid's disappointing results come amidst a broader downturn in the electric vehicle market, with other startups like Fisker and Nikola also reporting losses. Fisker's earnings showed a loss of 38 cents per share on revenue of about $198,000, while Nikola posted a loss of 26 cents per share on revenue of $11.1 million. Both companies missed Wall Street's estimates and experienced declines in stock prices as a result.

As these electric vehicle companies strive to compete with industry leaders like Tesla, they face significant challenges in ramping up production and maintaining profitability. Despite the setbacks, some of these startups have shown promising growth in revenue, which could indicate a brighter future if they manage to overcome the production hurdles and deliver on their ambitious plans.

For instance, Lucid Group has over 28,000 pre-orders for its Air Sedan, although this figure has decreased since November when it stood at 34,000 orders. The company has also announced a $7,500 credit for its Air Sedans in response to not being eligible for the federal tax credit on electric vehicles, aiming to boost sales in the face of competition.

Nikola, on the other hand, is refocusing its efforts on the North American market and concentrating on fuel cell-based trucks, hydrogen refueling, and autonomous driving technologies. The company is selling its share in a European joint venture for $35 million, with 21 million Nikola shares being returned by the venture partner Iveco. CEO Michael Löschler expressed confidence in the company's renewed strategy and partnerships, highlighting their focus on the hydrogen fueling business and plans to begin sales of fuel cell-based trucks this year. Nikola is also continuing to sell its electric trucks in a "make-to-order" format.

As the battle for electric vehicle supremacy continues, investors are closely monitoring the progress of these startups, particularly their cash burn rates and production targets. With the ever-increasing competition from traditional auto giants like General Motors and Ford Motor, which are set to significantly expand their EV output, the pressure on these startups to deliver on their promises and achieve profitability grows stronger.

In summary, the electric vehicle market has experienced a downturn recently, with companies like Lucid Group, Fisker, and Nikola reporting losses and falling short of analysts' expectations. These startups face challenges in ramping up production, maintaining profitability, and competing with industry giants like Tesla. However, with promising growth in revenue and ambitious plans for the future, these companies could potentially turn their fortunes around if they can overcome the hurdles and deliver on their objectives.