Lucid at Risk as Fisker Fails

By Douglas A. McIntyre Published Mar 14, 6:45AM EDT

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Lucid at Risk as Fisker Fails — © hapabapa / iStock Editorial via Getty Images

According to several media sources, electric vehicle (EV) maker Fisker Inc. (NYSE: FSR) will likely file for bankruptcy. It has hired a firm with a background in bankruptcies and a law firm to prepare. The company’s stock was hammered down by 44% after the news to $0.19. Fisker had already received a “going concern” opinion from its auditors, which is doubt that it can survive another year financially.

In Fisker’s shadow is the trouble at Lucid Group Inc. (NASDAQ: LCID | LCID Price Prediction). Its stock is down 64% in the past year, while the Nasdaq is higher by 45%. Recently, Lucid posted mediocre financial figures for the most recent quarter and cut 10% of its workforce. It also estimated production of 57,000 vehicles this year, against previous expectations of 80,000. Lucid is chewing through cash at the pace of billions of dollars a year.

The entire EV industry is in the midst of an unexpected collapse. CNBC recently published a long analysis titled “EV euphoria is dead. Automakers are scaling back or delaying their electric vehicle plans.” It pointed out that Tesla Inc. (NASDAQ: TSLA) sales could be flat this year after half a decade of annual double-digit growth. Major manufacturers General Motors and Ford are slowing their EV plans, putting more weight behind popular hybrids and returning emphasis to sales of their gasoline-powered cars.

Lucid is caught in a vice. It does not have Tesla’s EV market share, which is over 50% in the United States. Tesla also makes money in terms of both net income and adjusted EBITDA. GM and Ford make money on non-EV sales, which buys them years to get their EV businesses in gear. (Here are 10 amazing things Elon Musk invented.)

Lucid is too small to make it with its balance sheet and a shaky EV market.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.