The electric vehicle bubble popped long ago, instigated by the weakening economy in the last two and a half years. On Wednesday, Fisker was the latest victim when it failed to secure funds. Markets expected for several months that Fisker would file for bankruptcy.
The stock exchange delisted Fisker shares when its price traded below $1.00. That triggered an immediate requirement to pay back debt. Fisker tried to find another automobile firm like Nissan to invest in the company. Unfortunately, that plan failed. The firm then slashed prices for its EV, the Fisker Ocean.
The company had also shifted away from Tesla’s (TSLA) iconic direct-to-consumer model. When it sold its vehicle at a handful of dealerships across the U.S. it failed to attract buyers.
Fisker’s SPAC financing proved to be its downfall. This form of going public did not raise enough funds needed for tougher times.
Rivian (RIVN) and Lucid Motors (LCID) are the next firms to watch. Although Rivian raised billions in funding, its loss per vehicle is over $100,000.
Lucid has an EV car that is superior to that of Tesla (TSLA). It also raised funds to continue operations. Lucid’s ongoing challenge is increasing unit sales to achieve economies of scale.
When consumers are no longer buying EVs that cost over $100,000, Rivian and Lucid face tremendous pressures in the quarter ahead.
