Benzinga - by Adam Eckert, Benzinga Staff Writer.
Electric vehicle makers across the globe are burning through cash, fighting for a spot in your garage. But a look under the hood shows it might not be as bad as it appears from the outside looking in.
Charging Into The Future: As the EV market continues to boom, more and more startups are spending money to try to get you behind the wheel of their EVs.
The idea of a fully electric future is being pushed along by increasing consumer interest, government support and technological advancements making the relative value of EVs more appealing.
For most of the EV companies out there, it's all about demand and they don't care about how much cash they have to burn to get you to ride with them.
According to a New York Times report, Chinese EV maker NIO Inc - ADR (NYSE: NIO) lost about $35,000 per car last quarter. It's only selling about 8,000 cars each month, but spending isn't slowing down.
The company is doing all it can to set itself apart from competitors. Last year, Nio released augmented reality glasses, allowing passengers to project video and play games. Just last month, the company unveiled a new high-end smartphone capable of communicating with its vehicles.
That seems like a far reach for a company losing $35,000 per car, but CEO William Li is willing to pull whatever levers he can to try to one-up the competition.
“I’m actually not concerned about the capacity or volume of manufacturing — I’m only concerned about the demand," Li said at a conference in Shanghai.
Check This Out: Nio Vs. Li Auto: Which Chinese EV Startup Is Winning The Stock Race?
Rivian Automotive Inc (NASDAQ: RIVN), a U.S.-based EV company backed by Amazon.com, Inc. (NASDAQ: AMZN), is also heavily focused on demand, which appears to be strong. Rivian has maintained its pricing structure even as several other EV makers have engaged in a pricing war.
The EV maker had more than $9 billion in cash at the end of the second quarter, yet it's still trying to build capital. On Thursday, Rivian announced a private offering of $1.5 billion of green convertible senior notes due 2030.
Rivian lost $32,594 per vehicle in the second quarter, but that number was steadily improving. In the third quarter of 2022, the company was losing $139,277 per vehicle. In the fourth quarter of last year, it was losing $124,162 per vehicle and in the first quarter of 2023, that number was down to $67,329 before being cut in half, per CNBC.
In an interview this week on CNBC's "Squawk Box," CEO RJ Scaringe said the loss per vehicle figures would continue to improve quarter-over-quarter.
"We're seeing significant progress and what we are going to see as we go forward is a very clear staircase or set of steps that get us to profitability," the Rivian CEO said.
It will be interesting to see how it all plays out, but as long as demand remains strong, it seems nothing is going to stop these companies from raising more cash and charging ahead.
Read Next: Tesla's Q3 Delivery Slip Sparks Analyst Concerns: Is EV Demand Waning?
Photos: Courtesy of Rivian & Nio.
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