What happened
Stocks of electric vehicle (EV) makers are ending the week on a down note. There are several reasons for that. Rivian Automotive (RIVN +1.15%) and Lucid Group (LCID 0.56%) were down by 8.1% and 7.7%, respectively, as of 12:10 p.m. ET. Start-up Faraday Future Intelligent Electric (FFIE 2.59%) dropped as much as 16% before recovering some of that loss. However, it was still lower by 13.6% at that time.
NASDAQ: RIVN
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So what
There was news surrounding each of those names, as well as more general headwinds, with EV leader Tesla once again announcing price cuts. One analyst from Piper Sandler downgraded Rivian, and the price moves from Tesla were part of the reason why.
Analyst Alexander Potter explained his firm's downgrade from the equivalent of a buy rating to neutral was based mainly on the continued capital infusions Rivian may need. That's especially true if vehicle prices -- and therefore revenue -- continue to drop following Tesla's lead.
The analyst believes Rivian will need to raise more than $4 billion to fund its long-term growth. Rivian ended 2022 with about $12 billion in cash and equivalents, but expects that to only keep the company's operations and growth funded through about 2025.
The good news for Rivian is that demand seems to remain strong for its consumer electric trucks and commercial vans. But it seems Lucid can't say the same thing.
Today Lucid announced it delivered just 1,406 of its luxury electric Air sedans in the first quarter after producing more than 2,300. Those results disappointed analysts and could be a sign of weakening demand for a vehicle that directly competes with Tesla's Model S. Wall Street expected about 2,000 deliveries after 1,932 units were delivered in the fourth quarter of 2022.
NASDAQ: LCID
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Now what
Lucid shares have already been punished by investors with a more than 40% decline over the last six months. That was mostly driven by disappointing production estimates and a decreasing order backlog.
But that pales in comparison to the negative returns from fellow luxury EV maker Faraday Future. Faraday shares have plunged about 94% in the past year as the company struggled to get its production underway. Now it has once again delayed its initial deliveries and stated that it "expects to need substantial additional financing" with under $30 million in cash and equivalents as of April 11.
NASDAQ: FFIE
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Tesla has been flexing its financial muscle with its price cuts. That puts more pressure on the early-stage EV makers looking to establish a meaningful presence in the market. Today, investors are noticing and subsequently knocking shares of those start-ups down lower.
