Many electric vehicle (EV) makers in the world have chased Tesla since they were formed. Tesla’s unit sales this year easily will top a million. And their deliveries continue to grow in double-digit percentages. Every major car company in the world plans to have large EV fleets in the next three years. Several small EV operations may not last another year. According to The Information, three EV companies are on “life support.” They are Canoo, Faraday Future and Lordstown Motors.
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Cash balances are particularly important to car companies. They have major capital costs for manufacturing and parts. These are needed well before the companies sell their first cars, so the investments must be made ahead of revenue generation.
Lordstown has been through management turmoil. It is a penny stock that trades at $1.66. That is down from $4.59 earlier this year. It has started to deliver its first electric trucks. Investment from China’s Foxconn buoyed its fortunes. However, investors recently came to believe that is not enough money. Tesla will release an electric pickup of its own soon, and Ford already has one in the market, its F-150 Lightning.
Canoo is also a penny stock, trading at $1.33, down from a year-high of $11.51. It lost $109 million in the most recent quarter and $423 million in the past nine months. It expects operating expenses to be as much as $90 million this quarter. It needs a clear path to raise enough money to be in business in a year.
Faraday Future’s stock trades for $0.34. It has dumped its CEO, and it announced a financial lifeline recently. However, it lost $103 million last quarter and $398 million in the past nine months.
One thing has become clear already in 2022. Large car companies and Tesla will own the EV market. Smaller companies eventually will disappear.
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