Hot or Not: What’s the State of the EV Sector?

Despite the record production last year, financially things were a bit rough as well as the company continues to burn cash with its high-priced trucks. In Q4, Rivian lost roughly $43,000 per vehicle, and although its full-year revenue was 170% higher than 2022, its net loss was $5.4 billion (another improvement from 2022).

As part of the process of “optimizing [Rivian’s] operating expense expenditures,” executives announced a round of layoffs, this time affecting roughly 10% of salaried employees, the third round of job cuts for the company since summer 2022.

To top off the recent news flow, CEO RJ Scaringe announced March 7 that construction will be paused at its $5 billion future manufacturing site. Instead, its recently-unveiled R2, R3, and R3X SUVs will be produced at its factory in Normal, Illinois, in order to save money. Executives remain optimistic for the company’s future, though, as CFO Claire McDonough said they are targeting a positive gross profit margin by the end of year.

Rivian may have lost its “Hot” designation for its weak outlook this year, but the future for the company still remains bright if its cost-cutting measures this year work out.

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Lucid: Okay

Lucid has a bit of a problem with overpromising and under-delivering. But in 2023, executives seem to have struck a balance: The luxury EV maker produced 8,428 vehicles last year, coming at the top end of the 8,000 – 8,500 production guidance, and the forecast for 2024 is 9,000 vehicles.

Last year was full of building for the company both in terms of partnerships and manufacturing. Alongside collaborating with luxury names such as Aston Martin and Saks Fifth Avenue, Lucid expanded its Casa Grande, Arizona, plant by three million square feet in preparation for production of its upcoming SUV, Gravity.  The company also recently received a $6 million grant to build an office in Southfield, Michigan.

The office, which will focus on engineering research and development, is expected to employ at least 260 people and Lucid will eventually invest $10 million over three years.

Financially, Lucid is still in a middling position. Its Q4 revenue was $24 million under expectations at $157 million and its full-year net loss of $2.8 billion was more than twice that of 2022’s. It ended the year with $4.8 billion in cash, though, enough to fund the company into 2025.

Last fall, Lucid was decidedly on the “Not” side of things, largely due to continuously missing its own projections. But with a seemingly more level-headed outlook now, it could be better poised to fully capture the luxury segment it’s targeting.

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Fisker: Not

Fisker is in a downward spiral after it raised the going-concern alarm and announced layoffs during its Q4 earnings release. Those items were just the latest troubles plaguing the start-up.

Last year, the company began to shift from its direct-to consumer sales model to partnering with dealerships and CFO Geeta Gupta-Fisker said Fisker’s future was “highly dependent” on the shift being successful as it began delivering its flagship vehicle, the Ocean SUV.

Shortly after that launch, though, reports of braking and power loss began to surface, leading to an NHTSA investigation. CEO Henrik Fisker claimed the problem was fixed with an over-the-air update in December but the troubles appear to have persisted and the NHTSA recently opened another investigation.

A relative lack of funding means development on other planned models is being paused until executives secure a collaboration or investment from another OEM. Unsubstantiated rumors have named Nissan as the company Fisker is in talks with.

Production lagged forecasts big time in 2023: The company began the year with a projection of 42,400 units, but two reductions later, Fisker ended up making only 10,193 EVs, missing even the minimum 13,000 its leaders had aimed for.

Fisker is in big trouble, there’s no doubt about that. As of March 14, executives have brought on restructuring advisers, financial adviser FTI Consulting, and law firm Davis Polk to assist with an increasingly-possible bankruptcy filing, according to a Wall Street Journal report.

Things may turn around if the rumored investment materializes but executives still need to do some rehabbing on the company’s reputation after the trouble with their initial launch. In the event there’s no investment on the horizon, though, the company may not feature on too many more installments of Hot or Not.

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Wallbox: Hot

For the most part, things seem to be coming up rosy for charging company Wallbox N.V.:

•        Q4 revenue was up 34% year over year
•        Full-year operating losses were $11 million, compared to $45 million in 2022
•        Gross margins down to 32.8% from 40.5% in 2022

CEO Eric Asuncion attributed the positive finish to his team’s cost-reduction program, put in place in January 2023, that included laying off 15% of Wallbox’s workforce.

Wallbox also acquired German EV charging company ABL for $15 million boosting its combined charging portfolio to more than 1 million installations worldwide. ABL’s in-house manufacturing will allow Wallbox to bring products, such as its Supernova and Hypernova DC fast chargers, to market more quickly.

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EVgo: Hot

Similarly to Wallbox, EVgo had a good run last year as it nearly tripled its revenue. The charging company, which has made recent headlines for its partnership with Pilot Flying J, had a full year revenue of $161 million compared to 2022’s $54 million.

Executives had initially aimed for $105 to $150 million for year, but raised the guidance to top out at $158 million in November. CFO Olga Shevorenkova said the growth was largely driven by increased charging revenues as the company added more than 900 charging stalls and gained more than 860,000 new customers in 2023.

EVgo seems to have found its niche lately with the NEVI program. The company, through its eXtend network, has been awarded 75% of Ohio’s NEVI funds and $4.3 million from other programs in Pennsylvania and Colorado. If its upward trajectory continues, it’ll stay on the “Hot” side of things for the foreseeable future.

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ChargePoint: Not

While it’s been smoother sailing for Wallbox and Evgo, ChargePoint is still in choppy waters. Last year started off positive but went downhill in the second half after the company announced layoffs last September.

A $42 million impairment charge tanked ChargePoint’s profit margins in Q3 and its $110 million revenue for the quarter was also disappointing as it was below the expected range  of $150 million to $165 million.

The earnings release was quickly followed by the departure of then-CEO Pasquale Romano and CFO Rex Jackson. Soon after that, the lawsuits started flying as shareholders claimed ChargePoint executives knew the impairment charges were likely to happen and did not act appropriately.

Revenue also dropped in Q4 and for the full year, coming in at 24% and 8% less year over year, respectively. Networked charging, which accounts for the lion’s share of the company’s revenue, was down 40%. However, there were bright spots as ChargePoint’s highest-margin revenue stream, subscriptions, was up 30% and network uptime was 99.1% in January.

ChargePoint is the largest charging system in the country, but that doesn’t mean it’s doing well. 2023 was extremely hard for the company, and its new leaders will hope to take it in a better direction this year.