Nobody can deny that Tesla and Elon Musk have managed to achieve success. Today, Tesla is valued as the largest car manufacturer in the world, outperforming other industry giants such as Toyota or Volkswagen. What is now sweet was not long ago sour. Tesla has had a very hard time getting to where it is, and with those lessons learned Elon Musk acknowledges that his Rivian and Lucid Motor rivals are headed for the most absolute of bankruptcies.
The Musk’s exact comment has been: “Unless something changes significantly with Rivian and Lucid, they will both go out of business. They are headed for bankruptcy.” Although he could have given more precise information or qualified his words, the truth is that good old Elon has dropped the bomb and has hidden his hand. Musk knows very well that each of his words is scrutinized with a magnifying glassyou only have to take a look at the long history of his Twitter account to discover what we are talking about.
It is clear that Rivian is in a delicate financial situation. In the last year the company’s prices have not stopped falling. Stocks hit record lows every day, and RJ Scaringe’s company has been forced to take preventative measures such as increasing the price of its cars. In the first quarter of the year Rivian has signed losses of 1,500 million dollars, much more than the 414 million left in the last period of 2021.
Although orders and production increase, Rivian continues to lose money with every unit it produces. Elon Musk has recommended RJ Scaringe “drastically reduce expenses or they are doomed”. It must be said that Tesla has only recently started making money regularly, but unlike Rivian it has always generated a profit for each model sold. Tesla has had many financial hurdles, but production at a loss has never been one of them.
As for Lucid Motors, the words have been much less concrete. Musk added: “I hope they can do something, but unless they can cut their costs they are in serious trouble and will end up in the car graveyard like everyone else except Tesla and Ford.” Elon may have forgotten that Lucid is backed by investors with ample amounts of cash. Saudi Arabia is the largest investor in Lucid Motor and its confidence is based on the fact that the company’s second plant will be built in the Middle East and will be financed with “petrodollars”.
It is clear that the potential market that Lucid is targeting is very limited. With cars over $100,000, customers have nothing to do with Tesla or Rivian. Elon Musk speaks from his own experience as Tesla had to face such comments when he was in a similar situation to that of Rivian or Lucid. Once again we insist that Musk knows very well what to say and when to say it, and although he hopes that his rivals will get ahead, that competitive touch that he seeks to get rid of the competition cannot be ignored.