American electric vehicle (EV) start-ups are dealing with falling demand, as buyers look elsewhere, or put off purchases entirely.
High costs, quality-control issues, and supply-chain problems are taking a toll on the EV sector, according to the latest quarterly reports.
Several EV companies reported a declining interest for some of their latest vehicles, while production costs for each product rose even higher. For example, Rivian Automotive reported mixed quarterly results after a second recall in less than six months, reported Fox Business.
The company previously saw a net loss of $1.72 billion for the fourth quarter of 2022, compared to the $2.46 billion loss during the same period in 2021.
Over 12,000 electric trucks and SUVs were recalled, or almost 89 percent of all of those produced through September, after a faulty sensor in the front passenger seat was discovered, according to The Wall Street Journal.
EV Start-Ups Face Stiff Competition
At the same time, both Lucid, a luxury sedan manufacturer, and Nikola, which makes electric semi-trucks, are facing financial pressures.
Only Fisker, which is just starting production of its more affordable EVs, saw its orders improve, but only 56 have been produced so far, reported Reuters.
Meanwhile, Tesla has aggressively slashed vehicle prices this year to financially secure its industry dominance.
The price cuts by established rivals like Tesla and the recent release of cheaper EV models from legacy automakers have lessened demand for the new EV companies’ designs.
Fisker’s SUVs cost $37,499 to purchase, while Tesla’s Model Y is selling for at least $54,990 after the recent price cuts.
However, Rivian’s R1S SUV, which is almost twice as expensive as Fisker’s model, at around $78,000, while Lucid Air Pure sedans are being sold for about $87,400.
The four companies combined have already lost a total of $84 billion in value since the beginning of 2022.