Elon Musk, the outspoken CEO of Tesla and founder of the social media platform X, took to his platform to offer advice to American EV startups Rivian and Lucid following the release of their financial results for the fourth quarter and all of 2023.
Both Rivian and Lucid are facing significant cash burn. Rivian, despite increasing revenue each quarter, continues to operate at a loss on every vehicle sold. The company has also announced a 10% reduction in its salaried staff.
See also:Ā Rivian Reports 2023 Financial Results: Net Loss of $5.4 Billion Despite Increased Sales
Their product design is not bad, but the actual hard part of making a car company work is achieving volume production with positive cash flow
— Elon Musk (@elonmusk) February 22, 2024
Musk acknowledged that while the product designs of both Rivian and Lucid are commendable, the real challenge lies in achieving volume production with positive cash flow. He warned that Rivian could run out of money in approximately six quarters if costs are not drastically reduced, adding that executives “need to live in the factory or they will die.”
See also:Ā Rivian Announces 10% Workforce Reduction Amid Industry Slowdown
Current trajectory has them bankrupt in ~6 quarters. Maybe that trajectory will change, but so far it hasnāt. pic.twitter.com/tNNijQ3KwT
— Elon Musk (@elonmusk) February 22, 2024
They need to cut costs massively and the exec team needs to live in the factory or they will die
— Elon Musk (@elonmusk) February 22, 2024
Lucid Motors, on the other hand, plans to produce only 9,000 cars in 2024, a modest increase from its 2023 production guidance. The company is also expanding its factory in Arizona and has a facility in Saudi Arabia, owned by an affiliate of the country’s Private Investment Fund, which Musk referred to as Lucid’s “Saudi sugar daddy.”
See also:Ā Lucid Reports Q4 2023 Results, Eyes Prudent Growth in 2024
Their Saudi sugar daddy is the only thing keeping them alive
— Elon Musk (@elonmusk) February 22, 2024
Peter Rawlinson, CEO of Lucid and a former Tesla employee during the early Model S days, has faced criticism from Musk, who once remarked that Rawlinson left Tesla “before things got tough.”
Despite the challenges faced by Rivian and Lucid, Musk highlighted Tesla’s success, noting that the company has become one of the largest automakers globally. Tesla’s Model Y crossover even topped the list of best-selling cars last year, solidifying Tesla’s position as a dominant force in the EV space.
