Elon Musk, the CEO of Tesla and the vocal leader of his own social media platform, X, took to giving advice to American EV startups Rivian and Lucid after they released their financial results for the fourth quarter and the entire year of 2023.
Both Rivian and Lucid are facing financial challenges, with Rivian experiencing operating losses despite increasing revenue each quarter. The company recently announced layoffs of 10% of its salaried staff. Musk pointed out that while the product design of both companies is commendable, the key challenge lies in achieving volume production with positive cash flow.
Musk warned that Rivian could run out of money in about six quarters if significant cost-cutting measures are not implemented. He even suggested that the executive team should live in the factory to ensure their survival.
On the other hand, Lucid Motors plans to produce only 9,000 cars in 2024, a marginal increase from the previous year. The company is also working on releasing its Gravity SUV and expanding its factory in Arizona. Musk highlighted Lucid’s affiliation with Saudi Arabia’s Private Investment Fund, stating that their “Saudi sugar daddy” is the only thing keeping them afloat.
It’s worth noting that Peter Rawlinson, the CEO of Lucid, previously worked at Tesla during the early days of the Model S but left before facing tough challenges, as Musk mentioned.
Despite the controversy surrounding Musk’s comments, Tesla has established itself as a major player in the EV industry. The company has grown significantly and even topped the list of best-selling cars with its Model Y crossover.
In conclusion, while Musk’s advice may be harsh, it reflects the challenges faced by EV startups in the competitive market. As Tesla continues to thrive, it serves as a benchmark for others in the industry to strive towards success.