“As pricing becomes more and more important because of rising interest rates, because of more competition, this is going to be something that everybody’s going to want to keep an eye on,” said Travis Hoium, an analyst at The Motley Fool, a stock-focused website.
“There’s a limited amount of demand right now for electric vehicles, so every increase in supply means that companies are fighting for the same customers,” Hoium said in a video. He noted that Ford’s base Lightning is now about $23,000 less expensive than the base Rivian R1T pickup, which starts at $74,800, including shipping.
Rivian also faces financial pressures, Hoium said, since it will continue to burn through cash for several years as it builds a second factory for future vehicles on a new platform, with production scheduled to start in 2026.
Another EV startup, Lucid Motors, is the latest automaker to cut EV prices and boost incentives following Tesla’s price cuts across its lineup, starting in January. Tesla has about 60 percent of the U.S. EV market as is driving the price war as it keeps prices down and increases incentives, according to industry analysts.
Lucid reduced the price of the most inexpensive Air sedan by $5,000 on Saturday to $82,400. Shipping charges are an extra $1,650. The automaker also reduced prices on higher Air trims and announced a $749 per month lease deal.
Lucid’s moves are part of an industry trend to clear out growing EV inventory as production outstrips demand.
Automaker sales incentives on EVs averaged about $4,000 per vehicle in July, which was about double the average in the year-earlier month, J.D. Power said.
Rivian has seen its production and deliveries rise in recent months after a year and a half of supply-chain shortages.
Rivian reported second-quarter deliveries of 12,640 vehicles. That’s a big improvement over first-quarter deliveries of 7,946. The sales include two consumer vehicles, the R1T and the R1S crossover, along with EDV electric delivery vans for Amazon.
Rivian CEO RJ Scaringe told Bloomberg in early July that Rivian’s supply-chain issues were mostly resolved.
“What we saw in Q2 is really the beginnings of the supply chain now running in a healthy way,” Scaringe said. “And importantly, it’s not just about what we saw this quarter, but what’s to come.”
In its first-quarter earnings report in May, Rivian posted a $1.35 billion net loss and said that factory improvements would allow it to meet its 50,000 production goal for the year.
Cash and cash equivalents at the end of the first quarter were $11.24 billion, compared with $11.57 billion in the preceding three-month period, the automaker said.
In response to a question on the earnings call, Scaringe said he didn’t anticipate price cuts to Rivian’s consumer vehicles in order to match cuts by other EV makers in the market. Rather, Rivian will have future trims that are both more expensive and less expensive than current ones, he said.