By Tiyashi Datta and Caroline Valetkevitch
Production forecast cuts at Fisker Inc and Lucid Group have signaled more pain for electric-vehicle startups struggling with slowing demand and a price war started by Tesla, sending shares in the sector sharply lower on Tuesday.
Fisker and Lucid were both down more than 7%, while rival Nikola Corp fell nearly 11% after it posted a bigger quarterly loss and said it would pause production to better organise the assembly line at its Arizona factory.
Downbeat updates from these companies underscore the challenges facing cash-strapped EV firms, whose plans to disrupt the auto industry are unraveling in the face of supply chain constraints, rising interest rates and intense competition.
Rivian, which will report earnings after market close, skidded 2.2%.
"Prototypes are easy, production is hard and achieving positive cash flow is excruciating," Elon Musk, who took Tesla from "production hell" to the most valuable automaker, said on Twitter in response to a post on Lucid's loss per vehicle.
The company, which made 2,314 vehicles in the first quarter, burnt through $835.7 million of cash in the quarter.
Lucid now has $900 million in cash and cash equivalents and plans to produce more than 10,000 vehicles in 2023, compared with an earlier forecast for 10,000 to 14,000 units.
Fisker lowered its annual production target to between 32,000 and 36,000 units from 42,400 cars, blaming supply chain issues and an "updated timing" for roadworthiness certification.
The company, which started production of its Ocean SUV just in November and has $652.5 million in cash, also posted a larger-than-expected loss.
"Competition from a plethora of new electric crossover/SUV models coming to market should weigh on its top line," CFRA analyst Garrett Nelson said, adding that he expected losses to balloon as Fisker ramps up production.
For Nikola, cash burn came in at $240 million as it produced 63 vehicles.
"This level of cash burn is not sustainable for our business, and we are looking at every option for reductions in spending," Nikola finance chief Anastasiya Pasterick said.
In a separate release, Nikola said it was selling its stake in a joint venture with Iveco Group to the Italian truck maker for $35 million after Iveco said it would acquire full ownership of the JV.
(Reporting by Caroline Valetkevitch in New York; Editing by Lance Tupper, Matthew Lewis and Vinay Dwivedi)
