When Ford (F) disclosed that its electric vehicle business would lose billions this year, it suggested that competitors will struggle as well. Rivian (RIVN) does not have a gas-powered vehicle business to rely on. It is at risk of performing poorly despite already falling to new lows.
Investors should avoid companies that rely on only one customer for sales. Rivian is no longer looking to sell 100,000 vehicles to Amazon (AMZN). Instead, it needs to expand its customer base and sell to other customers. Rivian is finding ways to end its exclusivity arrangement with Amazon.
Rivian is attractive at current levels. It has plenty of cash, offset by high cash burn rates. RIVN stock may not stop falling until its cost stabilize.
Lucid Motors (LCID) depends on selling luxury vehicles at a mass scale. Once its factories build units at break-even levels, the company may start selling mainstream-priced units to the mass market. Unfortunately, it keeps failing to meet its output target.
LCID stock could re-test its 2023 low of $6.09. Wait for the stock to end its downtrend first. Once the market confirms the stock finds support at the low, it may stop falling.
