What happened

Tuesday's looking like a lousy day to be invested in electric vehicle (EV) stocks, as shares of EV manufacturer Canoo (GOEV 2.59%) tumbled after the company reported another sizable loss, and better-established EV start-ups Rivian Automotive (RIVN 6.10%) and Lucid Group (LCID 0.41%) follow them down.

As of 10:30 a.m. ET, Canoo stock is sinking 6%, tied with Lucid's 6% loss, and Rivian stock is doing only a little bit better -- down 4.7%.

So what

Canoo crowed, at the top of its earnings release, that it has finally "entered the revenue and income generation phase" of its business as contracts with the U.S. Department of Defense and NASA begin filtering onto the top line. And yet as of today there's still no sign of them.

Instead, Canoo reported zero revenue for the quarter (just like last year's Q2). On the plus side, while the company didn't actually generate any income either, its loss for Q2 2023 was only $0.14 per share -- better than analysts' forecast $0.19-per-share loss.  

Canoo also noted that it ended the quarter with $5 million in cash -- but would have ended with $61.2 million if it had completed some stock and debt sales, accomplished later, within the quarter.

Now what

The problem with this for Canoo is that, according to Canoo's cash flow statement, the company is still burning through cash at a rate well in excess of $80 million per quarter -- and if that keeps happening, then I'm afraid even $61.2 million in cash isn't going to cut it, and this company is going to have to sell even more stock, and take on even more debt, in order to remain afloat.

The problem with this for Rivian and Lucid, meanwhile, is that Canoo still seems to be able to access financing to keep itself afloat. And that means that Canoo is still sticking around to offer electric vehicles to shoppers who might otherwise be buying Rivians and Lucids.

And that could be a real problem for these similarly unprofitable rival EV makers. Just last week, HotCars.com ran a glowing profile of Canoo's new electric pickup truck, and indeed, its entire lineup of "affordable electric vehicles for regular customers," that contrasts starkly with Lucid's offering of an $82,000 Air luxury electric sedan, for example, or Rivian's $80,000 electric pickup truck. At the $39,950 list price that HotCars describes, Canoo's electric lifestyle vehicle costs literally half of what the competition is charging, and Canoo's new electric pickup is expected to be similarly affordable.    

Sure, you could point out that Canoo's truck won't be out for another couple of years, while Rivian and Lucid are selling EVs already today, but if Canoo can keep itself solvent long enough, the risk is that buyers will decide it's still worth the wait.