What happened

As markets wait with bated breath for news of the next Federal Reserve interest rate hike (will it be 0.25% or 0.5%? Place your bets now!), one group of investors in particular isn't standing around and waiting to see which way the interest rate winds will blow. They're selling now and asking questions later.

I'm speaking of course about investors in electric car stocks.

As of 11:35 a.m. ET, shares of Lucid Group (LCID 1.19%) are down 3.2% -- making today its third straight day of losses. Likewise with Canoo (GOEV -8.52%), which is now down three days in a row and sinking 3.8% below water this morning. Meanwhile Rivian (RIVN -2.21%), which enjoyed a bit of a run-up yesterday, is off a flat 5% today.

So what

Two of the three stocks have actual news to report today -- but good or bad, it doesn't seem to be helping any of them.

Canoo announced this morning that the U.S. Department of Defense's Defense Innovation Unit has placed an order with it for "battery modules for analysis and demonstration." No value was assigned to the contract, however, nor any indication given as to its size. (Which probably means it's not particularly large -- and certainly not large enough to give the stock a boost today.)  

Meanwhile, Reuters just reported that Rivian is laying off 6% of its workforce -- 840 souls.  

Rivian says the layoffs won't affect its ability to produce electric trucks, which is good news for a company that already missed its goal of producing 25,000 electric trucks last year. What the move will do is help the company conserve cash in the middle of a looming price war for EV market share.

Now what

This is the big story in the EV industry, by the way. Spooked by dramatic 20% price cuts at Tesla two weeks ago, companies as near as Ford and as far off as Xpeng have already answered with their own price cuts. Rivian, which sells electric trucks for $67,500 and up, will presumably be forced to follow suit at some point. That, or its products will look increasingly price uncompetitive as more and more EV companies do cut prices to compete with Tesla.

Problem is, unlike Tesla, which earned $12.6 billion at near-17% operating profit margins last year, or Ford, which may have earned close to $8 billion (according to analyst estimates), Rivian isn't currently earning anything despite the high prices of its vehicles -- and isn't expected to earn anything before 2030, according to analysts polled by S&P Global Market Intelligence.

Lucid, whose first profit isn't expected until 2028, and Canoo -- a bit better off with a profit prediction of 2026 -- are basically in the same boat, by the way. Not only are these companies far away from profitability and burning cash like mad; they're likely to be pushed even further away from profitability, and end up burning even more cash, if they're forced to cut prices to remain competitive.

That's exactly what investors are worrying about today. What's more, I think they're right to worry.