Hot or Not: We Check In On Young EV Ventures

Welcome back to Hot or Not, a semi-regular rundown of the latest news from start-up electric-vehicle manufacturers. Last time, the leaders of many of the firms on our list were being conservative about their projections as the rate of EV sales had slowed. Nearly six months later, what has changed?

In short: A little for some, and a lot for others.

As a reminder, we give each company its rating based on stated production and delivery goals, financials, major news or deals and the potential for its business to perform better. The main ratings are, from worst to best:

Not: The company isn’t doing well at all and the outlook isn’t too good, either.
Mixed: The company is meeting some goals but is still lacking in key areas.
Okay: The company is meeting most of its goals and has a pretty decent outlook.
Hot: The company is hitting (or exceeding) stated goals and looks to have a promising future.

There are also special designations of It’s Complicated, where a company has so much good and bad happening that it’s too hard to accurately place it, and Too Soon to Tell, where there’s not enough material for us to say where it might go next. There’s also the new designation of Stone Cold, for when a company makes its final appearance on the list, likely due to bankruptcy filing with no hope of manufacturing resuming.

A company’s designation can change drastically between updates since these are all young ventures in a fast-evolving space. So, while some may not be doing so well in this round of Hot or Not, they could be among the leaders of the pack next time around.

With that, let’s dive in.

Lucid: Hot

The first half of 2024 has been a good one for luxury EV maker Lucid Motors. Earlier this year, executives significantly lowered their production targets and it seems like managing expectations was the right call. In Q2, the company produced 2,394 vehicles, bringing its year-to-date total to 4,361.

Financially, Lucid is in a relatively sweet spot as well. Thanks to lucrative deals, government grants and investments from its majority owner, the Saudi Arabia Public Investment fund, Lucid ended the first half of the year with $4.28 billion in cash, enough to fund operations until the end of 2025.

“We are pleased with the demand we have been experiencing,” said Interim CFO Gagan Dhingra during Lucid Q2 earnings call in early August. “Deliveries outpaced production in the quarter, which was according to plan. And we worked down inventory to much more manageable levels while still enabling a hub-and-spoke model to facilitate shorter customer delivery times.”

The second half of 2024 also holds promise: Lucid’s Gravity SUV is set to begin production, which will help boost its production and delivery numbers for the year. When we published our first Hot or Not last year, Lucid had a ‘Mixed’ status due to its inability to meet production and delivery projections. Now, executives seem more aware of Lucid’s position and how to best go forward, which is, in some ways, better than overpromising and under-delivering.

Rivian: Okay

Rivian Automotive has been promoted to ‘Okay’ status after reporting Q2 results that could be described the same way. At the beginning of the year—after smashing expectations in 2023—its leaders decided on a relatively conservative production number. And while it might be better to underpromise and overdeliver, that move seems to have been leaders’ way of bracing for the storm 2024 has brought so far.

Layoffs, flat revenue and a high cash burn are plaguing Rivian despite its best efforts. In Q2, while revenue was up, the company’s gross profit was $451 million, a 9% year-over-year decrease.

It’s not all bad news for the truck maker, though, or else we would emphatically be labeling it a ‘Not’ instead of ‘Okay.’ Rivian recently announced a joint venture with Volkswagen worth $5 billion and its teams have successfully retooled its facility in Normal, Illinois. That is expected to significantly reduce production costs in the second half of 2024 and executives are optimistic about what’s next.

“There is more to go. We are focused on reducing R1 costs beyond 2024 through lower material costs and conversion costs,” CEO RJ Scaringe said in earlier in August. “As we continue to source materials for R2, we are seeing opportunities to further reduce the cost of R1 through additional supplier cost reductions. In addition, we believe the expected joint venture with Volkswagen Group will allow us to achieve more favorable pricing from suppliers.”

Things may not be incredible for Rivian right now, but they’re far from bad.

VinFast: Mixed

VinFast appeared on the first Hot or Not edition shortly after it went public. At the time, it was too soon to tell where things are going. A year later, the trend is downward: When the stock first debuted on the Nasdaq, it hit a high of $83.30 per share. Now? $3.60 per share.

A lot has gone right for the Vietnamese start-up: VinFast reported that it delivered 12,058 vehicles in the second quarter, a 26% jump year-over year. YTD, Its deliveries are up 92% compared the first half of 2023.

Despite that, leaders are facing what they called “ongoing economic headwinds and uncertainties in different macro-economies,” leading to a lowered delivery target of 80,000 vehicles for the year and the delay—by a whopping three years to 2028—of the opening of a manufacturing plant in North Carolina. Deliveries numbers show why VinFast earned its ‘Mixed’ designation: While lower than anticipated, they’re still more than twice the 34,855 vehicles delivered last year.

The looming question is whether VinFast’s goals are realistic. As it stands, the company has delivered just over 21,700 cars this year, which means it has the lion’s share left to tackle by Dec. 31. We’ve seen this dance before with Lucid and, to an extent, heavy-truck maker Nikola. In that case, it took several consecutive quarters of missed targets before executives began properly managing expectations.

Nikola: Hot

In Summer 2023, Nikola Motors was dealing with a lot of mostly bad news: Battery fires, layoffs and a CEO shake-up were interspersed with bright spots about record revenue and multimillion-dollar deals. Fast forward to the present day and there’s definitely more good news.

Nikola’s Q2 financial results were technically a mixed bag: Revenue came in at $31.3 million, double that of a year ago. However, gross losses were still high at $54.7 million.

Hot or Not, though, isn’t just about quarterly results, but the bigger picture: Nikola’s new leaders have strategically pivoted away from battery electric trucks to hydrogen fuel cell electric trucks, and its bet is paying off so far. The company is opening refueling stations, winning government funds, and, if executives are to be believed, fielding calls from “Big Energy.” The horizon is filled with opportunity for Nikola, it just needs to keep trucking along the hydrogen highway.

Polestar: It’s Complicated

2024 has been a year of change for Polestar, which was largely “cut loose” earlier this year by its parent company, Volvo Cars. Volvo sold most of its stake in Polestar and said it would no longer provide funding, but Volvo’s own parent company, Chinese-owned Geely Holdings, is the one Volvo sold its stake to, which makes things a little hazy.

In late August, Polestar’s CEO, Thomas Ingenlath, who has led Polestar since its inception, resigned. He’ll be replaced with former Nikola and VinFast CEO Michael Lohscheller.

Polestar has also been plagued by accounting issues to the point where the company only reported Q1 results in July and Q2 results in late August. In the first quarter of 2024, Polestar’s deliveries and revenue were down 40% and 36%, respectively, year over year.

In Q2, though, the outlook was far more optimistic. Quarter over quarter, sales were up 80% and revenue up nearly 70% at $575 million. CFO Per Ansgar attributed the improved results to Polestar 2 sales and initial deliveries of Polestar 3.

Year over year, the company managed to bring down SG&A, research and development spending and operating expenses, but revenue was down $118 million, which Ansgar said was “due to lower global volumes and higher discounts.”

It’s tough to place exactly how Polestar is doing for other reasons as well. In one year, the company will have gone from producing one vehicle, the Polestar 2, to three with the addition of the Polestar 3 recently and, later this year, Polestar 4. According to a recent interview, prototype production of Polestar 5 will be ramping up in 2024 as well. Which begs the question: Will portfolio diversification goose interest and sales or will it stretch manufacturing operations and dilute marketing efforts?

Executives at least are very optimistic about the second half of 2024; Ansgar said they anticipate “stronger volumes,” particularly in Q4, and the team is aiming for “double-digit growth margins” by year end.

Fisker: Stone Cold

Fisker is, for the second time, bankrupt.

The trouble truly began when Fisker’s only product, the Ocean SUV, started being delivered in late 2023. Soon after, reports of power loss, improper braking and other problems began to roll in. By March, executives raised the going-concern alarm.

A bright spot seemed to come with news that an existing investor in Fisker would give the company $150 million and that executives were in talks with a large automaker—rumored but never confirmed to be Nissan—but both deals ultimately fell through. In a late March filing with the U.S. Securities and Exchange Commission, executives said they were seeking “strategic alternatives” to raise money and trading shares of the company halted.

Around the same time, the Washington Post reported that Fisker had retained restricting and financial advisors, as well as a law firm in preparation of a bankruptcy filing. At the time, CEO Henrik Fisker denied the rumors.

By mid-June, though, it was over. A Fisker spokesperson said in a statement that “[…] Like other companies in the electric vehicle industry, [Fisker] faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently,” and that bankruptcy was the most viable path.

Since then, the company’s remaining inventory was sold for about $46 million, and executives were able to avoid a Chapter 7 liquidation. The latter lets leaders oversee the sale of other assets and ensure that over-the-air software updates for Oceans can continue.

This is likely the last time Fisker will appear on the list. But considering it came back from the dead once, that’s not a guarantee.