Latest news with #Tesla-like
Yahoo
18-07-2025
- Automotive
- Yahoo
Prediction: Rivian's New R2 Truck Will Be a "Tesla-Like" Turning Point for the Company
Key Points Rivian is an EV maker trying to break into the big leagues of the auto industry. The still-young company started out by focusing its efforts on high-end trucks. Its next big move will be an introduction of the R2, a truck for the mass market. 10 stocks we like better than Rivian Automotive › Tesla (NASDAQ: TSLA) made a decision when it built its business to start with high-end vehicles. And then it charted a path toward more moderately priced vehicles. That business move worked and now the company is sustainably profitable despite years of red ink at the get-go. Rivian Automotive (NASDAQ: RIVN) is currently in the red ink stage of its development, but it has Tesla-like ambitions and a key turning point could be fast approaching. What did Tesla do? The first Tesla was a fancy, high-end sports car. That vehicle proved to the world that electric vehicles (EVs) were a real product that customers would want to buy. For a long time the large automakers shunned EVs as not being viable. After Tesla proved the concept, it brought out sedans that would appeal to more than just car enthusiasts. Those higher-end EVs sold well and, suddenly, every major automaker realized that they had to make EVs. If they didn't jump on the bandwagon they could get boxed out of a new segment auto market. As that was going on, Tesla pivoted again, bringing out lower-cost models of its EVs that had mass-market appeal. That helped to boost sales volumes in the capital-intensive business and improve profitability. Switch Auto Insurance and Save Today! Great Rates and Award-Winning Service The Insurance Savings You Expect Affordable Auto Insurance, Customized for You Essentially, Tesla started with rich customers. But there are only so many rich customers. And, thus, it moved down market to build a sustainably profitable business. That's a simplification of a very long process, of course, but it is the general theme that's important. Rivian is following the Tesla playbook. Start high-end, then go mass-market Rivian currently makes two kinds of trucks, a delivery vehicle and a high-end consumer pickup truck. The delivery vehicle was an important proof of concept that helped the company develop its technology. It also allowed Rivian to generate some early revenue thanks to a relationship with Amazon. Consider the delivery truck similar to Tesla's sports car. As it was proving that its technology was reliable, Rivian was also building fancy high-end pickups for the consumer market. The trucks have been well-received, and Rivian has been able to ramp up production and fine tune its production processes along the way. In fact, it was able to turn a modest gross profit in the fourth quarter of 2024 and in the first quarter of 2025. This means that Rivian stopped losing money on every truck it sold, though costs further down the earnings statement, like research and development (R&D) and selling, general, and administrative expenses (SG&A), still leave it bleeding red ink. This is where scale becomes important. Rivian needs to spread its costs over more vehicle sales, which is basically what Tesla did. The next big vehicle release for Rivian is the R2, which is a lower-cost truck meant for the mass market. The goal is to start production in the first half of 2026. With around $7 billion of cash on the balance sheet and a key partnership with auto giant Volkswagen, it seems highly probable that Rivian gets that factory up and running. The real test of Rivian's business will come when it starts selling the R2. If sales are robust the company will have successfully taken Tesla's playbook and achieved similar wins. And the added volume from R2 sales should help move Rivian toward sustainable profitability, just like Tesla achieved. Rivian is high-risk, but executing well Rivian remains a high-risk investment that's only appropriate for more aggressive investors. If the company doesn't execute well it could still fall short of its goals in what is a very complex and competitive auto sector. However, the launch of the R2 could be the big turning point for Rivian that turns it into the "next Tesla." OK, no company is ever going to be Tesla, given that the company effectively created the EV space. But Rivian's R2 could make it the next best thing. Should you buy stock in Rivian Automotive right now? Before you buy stock in Rivian Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,149!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,060,406!* Now, it's worth noting Stock Advisor's total average return is 1,072% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy. Prediction: Rivian's New R2 Truck Will Be a "Tesla-Like" Turning Point for the Company was originally published by The Motley Fool
Business Insider
08-07-2025
- Automotive
- Business Insider
Lucid Group (LCID) in Danger of Short Squeeze as Cash Burn Intensifies
(LCID) is another EV maker struggling in the stock market—a company with weak margins, erratic valuations, high cash burn, and a persistent habit of diluting existing shareholders. It's one of the clearest examples of how the early hype surrounding EV SPACs collided with the brutal realities of the automotive industry. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Not only has Lucid's stock dropped more than 90% since going public in mid-2021, but it has also fallen by over 30% this year, driven by very high short interest fueled by weak fundamentals and the real risk that it will soon run out of cash. That means it'll likely need external funding, leading to more dilution—a vicious cycle that's steadily destroying value for retail shareholders. When compared against the S&P 500 (SPX), LCID has drastically underperformed. That said, for now, the best long-term play is arguably to Sell Lucid, in my view. However, shorting it could also be risky, as the current setup makes a short squeeze a real possibility. How Lucid Lost Its Spark In 2021, Lucid went public via a SPAC at the height of the EV frenzy, driving the stock to a peak of nearly $60 per share. At that time, the market was pricing electric vehicles as a highly disruptive technology, expecting massive production growth for Lucid and assuming it would reach 'Tesla-like' margins within a few years. The problem is, very little of that has actually happened. Lucid overpromised and underdelivered on production targets, missing them multiple times due to supply chain issues, manufacturing challenges, and operational inefficiencies. The initial expectation was to deliver 20,000 vehicles in its first year as a publicly traded company, but actual deliveries came to less than 5,000. To put it in perspective, by 2024, the company had delivered 10,241 vehicles for the year. Lucid has positioned itself in the EV market as an ultra-premium luxury brand, with models like the Lucid Air priced very high (ranging from $70,000 to $250,000), which limits its addressable market. Over the past few years, rising interest rates have made luxury buyers more cautious, while cheaper EVs have gained traction, thereby hurting Lucid's value proposition and increasing its cash burn. As a result, Lucid has had to undergo multiple rounds of fundraising and share dilution, even with Saudi Arabia's Public Investment Fund (PIF) as its primary backer. Still, shareholders have felt the pain of dilution. In the past four years, Lucid has grown its shares outstanding by 83%, raised $6.53 billion from equity sales, and burned through $7.79 billion in operating cash flow, resulting in a 96% decline from its all-time high reached at the end of 2021, according to TipRanks data. The High Cost of Betting Against Lucid Trading near penny-stock levels at just $2.16 per share, despite having a market capitalization of $6.6 billion, Lucid's troubled outlook unsurprisingly attracts considerable attention from short sellers. Currently, LCID is one of the most heavily shorted stocks in the U.S., with around 47% of its float sold short. One significant reason for this heavy skepticism is that Lucid has approximately $3.6 billion in cash and short-term investments on its balance sheet while incurring only $1.95 billion in annual operating cash flow. This gives it an estimated cash runway of only about 1.8 years—if the burn rate stays the same, meaning it will likely need more funding soon, which would probably lead to further dilution. Adding to these liquidity challenges, LCID trades at an EV-to-sales ratio of 8.3x, which is more than six times the industry average and over three times higher than its peers, such as Rivian (RIVN), which trades at 2.7x. While these factors help explain why short interest in LCID is so high, it's also important to note that borrowing shares to short LCID comes with a steep cost—15.7% per year. This cost-to-borrow (CTB) is driven by supply and demand for shares available to borrow. Even with a large float, the high CTB indicates that there are too few LCID shares available to borrow and a massive demand to short the stock. For comparison, stable blue-chip stocks usually have a CTB of 0.5% or less. On the one hand, this combination of explosive short interest and a high borrowing cost signals a strong market belief that Lucid's stock price will decline. On the other hand, it also sets up a high risk of a short squeeze. If any positive news briefly shifts investor sentiment and causes the share price to rise, short sellers could be forced to buy back shares to close their positions, triggering a snowball effect that pushes LCID's price up quickly. Of course, this is speculative, but the setup is definitely in place. As a result, LCID stock tends to be highly volatile. Where the Lucid Bulls Find Hope If the pessimism surrounding LCID is already fairly straightforward, there are still some points that bulls can latch onto that might eventually squeeze a large number of sellers out of this stock. For example, the release of its Gravity SUV—which, although there's little clarity on pre-orders—has reportedly been doing well. Lucid continues to expand its production capacity, and the SUV is expected to give a significant boost to sales in 2026. The consensus expects revenues to reach $2.74 billion, compared to the $870 million reported in the last twelve months. Lucid also hints that it's working on a new mid-sized model, which could arrive by the end of 2026, potentially generating some buzz depending on market reception. However, in my view, the most considerable foothold for bulls is Saudi Arabia's support through its sovereign wealth fund, which owns 73% of the company, according to TipRanks data. Lucid has already begun operating its plant in King Abdullah Economic City (KAEC), Saudi Arabia, with an initial annual production capacity of up to 5,000 vehicles. The company plans to expand this to 155,000 units annually by the end of the decade. This plant is strategic to meet the agreement to deliver up to 100,000 vehicles to the Saudi government and is part of the country's push to diversify its economy and attract cutting-edge technology. So, while execution risks are enormous, it's not all bad for Lucid. The company has a 'demand anchor' with the Saudi government agreement providing a revenue floor, and the expansion is well financed by the PIF (implying less dilution risk). Add in potential progress in local production and meaningful deliveries, and that could be enough to shake the short-seller's narrative—even if only slightly. At current levels, that might be enough to trigger a quick spike in the share price. Is Lucid Group a Buy, Sell, or Hold? The consensus among analysts is still skeptical about LCID's near-term future. Of the seven analysts covering the stock over the past three months, none are bullish, one is bearish, and six are neutral. LCID's average price target of $2.38 implies a potential upside of about 14% from the current share price. Brutal Fundamentals Induce Risk of Short Squeeze Lucid currently faces a challenging outlook. While long-term sales growth projections appear promising, the company's elevated cash burn rate makes further dilution highly likely. Additionally, Lucid operates in a price-sensitive segment of the EV market, which complicates efforts to scale efficiently, helping to explain the stock's persistently high short interest. From a fundamental standpoint, I view LCID as a Sell, as ongoing capital raises may continue to weigh on the stock despite potential revenue growth. That said, for risk-tolerant traders, LCID may still present speculative opportunities. The stock's high short interest creates the potential for short squeezes, offering the possibility of sharp, short-term gains—albeit with elevated volatility and downside risk.
Axios
07-05-2025
- Automotive
- Axios
Why cars will never be smartphones on wheels
The digital transformation of the auto industry has hit a speed bump: Slower-than-expected electric vehicle adoption has delayed the rollout of intelligent, software-defined vehicles. The big picture: Automakers are forecasting billions of dollars in recurring revenue from software and services that improve over time through constant updates. That requires a next-generation electrical architecture — think of it as the car's brain — to handle everything from ride dynamics and safety functions to the in-car experience that consumers want. Automakers dream of being more like Apple, with an elegant operating system like iOS that enables the same digital experience across all their vehicles. Tesla and other EV startups already have such platforms, and they regularly send software updates to add features or improve performance. But they had an advantage: Their modern cars were designed from scratch. Legacy automakers are saddled with complex software networks cobbled together from more than 100 electronic control units that manage specific functions like braking or infotainment. Even minor software updates are a hassle with such a fragmented system. The shift to electric vehicles seemed like the ideal time for many automakers to toss out those antiquated architectures in favor of a Tesla-like approach. Many companies who yoked software modernization to their EV development plans, however, are now thinking better of it. Driving the news: Ford recently pulled the plug on an ambitious next-generation software project, deciding instead to pour those efforts into improving its existing architecture. The fully networked vehicle project (FNV4) was to have been the foundational software platform for a future lineup of smart, connected vehicles. In a blog post explaining the pivot, Doug Field, Ford's chief EV, digital and design officer, noted: "The world has changed since automakers, including Ford, laid out plans to rapidly redesign their vehicles for an electric future." EV adoption has been slower than expected, he noted, and Ford's digital transformation shouldn't leave behind customers who prefer gasoline or hybrid vehicles, he wrote. Instead, Ford will take a more incremental approach to software, building upon the digital experience launched recently in the Ford Explorer and Lincoln Nautilus and Navigator and deploying it across its full portfolio of vehicles. The move will save money, Ford CEO Jim Farley told analysts this week, and even make future products more affordable. Between the lines: The software conundrum demonstrates why a car is not a smartphone and Detroit will never be like Apple. Phones are replaced every two or three years; cars stay on the road for 10 to 15 years or more. That means automakers are often stuck spending money to keep old technologies alive, even as they're investing billions to develop more sophisticated, modern vehicles. "Having a new electrical architecture on some vehicles and a legacy architecture on other vehicles and maintaining them all at the same time is not a good strategy for this new world," Field wrote.
Yahoo
21-03-2025
- Automotive
- Yahoo
2024 Ford Mustang Mach-E Rally
(WHTM) — When Ford introduced the all-electric Mustang Mach-E a few years ago it was like many electric cars, fast, but not very entertaining. Now for an extra $6,000 in the Mach-E Rally, you'll be grinning ear to ear. With all-wheel-drive, adjustable magnetic ride suspension, 480 horsepower and more. This thing is a blast. White wheels, a hatch-mounted spoiler and stripes give it visual appeal too. EPA rates it at 265 miles range, about 20 less than a base Mach-E, but in my opinion, worth it. I don't care for the seats in a regular Mach-E, but these are better. The rally package includes Ford's blue cruise self-driving feature. A Tesla-like center screen works well once you get used to it. More room is freed up in the center console because of the rotary gear selector. Also, clever is the audio knob that doubles as a fan speed control. Two adults will be comfortable in row two, three would be snug. The battery pack sits high in the Mach-E and that cuts into cargo space. Even on ice and snow handling and braking are balanced and power is excellent. One of the most entertaining electric cars available. So for the 2024 Ford Mustang Mach-E rally, I say thumbs up to the fun factor. Excellent traction and decent range. Thumbs down to the price. The as-reviewed sticker is $65,485. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Reuters
30-01-2025
- Automotive
- Reuters
After robotaxi failure, GM software bet turns to driver assistance
DETROIT, Jan 30 (Reuters) - General Motors (GM.N), opens new tab is charting a technological future focused on its Super Cruise driver assistance technology, similar to Tesla's (TSLA.O), opens new tab Autopilot, with the expectation of bringing in billions of dollars in revenue. GM's push on hands-off driving system Super Cruise comes as the automaker exits its multi-billion-dollar-losing robotaxi business Cruise, which focused on self-driving vehicles hailed by an app. GM forecast on Tuesday that Super Cruise would bring in about $2 billion in total annual revenue within five years, aiding in its efforts to be known like Tesla for technology as much as it is for vehicles. The revenue from Super Cruise "is much higher-margin than manufacturing vehicles" and would pave the way for consumer acceptance of completely self-driving cars, said Morningstar analyst David Whiston. Super Cruise is conceptually similar to Tesla's Autopilot in that they both offer partially automated driving technology. The difference is Super Cruise uses a more robust sensing system than Autopilot to ensure the driver stays attentive to the road, according to Sam Abuelsamid, vice president of market research for Telemetry Insights. Super Cruise is available on about 20 newer higher-end gasoline and electric vehicle models, including many Cadillacs and large SUVs. It is standard on some vehicles and optional on others. For the optional vehicles, customers can access the technology for $2,200 to $2,500. Super Cruise is free for three years and then customers are offered a subscription at $25 a month or $250 a year. GM's push into the technology has yet to bring Tesla-like benefits to its stock valuation. The Elon Musk-run electric vehicle maker's stock is trading around 120 times expected earnings, reflecting a perception of it as a high-growth tech company, according to LSEG data. By comparison, GM is valued at around 5 times its earnings. Investors are also concerned about the effect of the Trump administration's proposed tariffs on Canada and Mexico on GM, which sent shares down 8.9% after its results on Tuesday and a further 0.5% on Wednesday. But driver assistance technology remains a promising growth area, GM CEO Mary Barra said on Tuesday, with the automaker expecting to double the about 360,000 vehicles in the Super Cruise fleet in 2025. In 2024, about 20% of roughly 18,000 users signed up for a Super Cruise subscription after the complimentary subscription ended, Barra said. Another 33,000 vehicles will end a three-year trial period in 2025 and GM is targeting to more than double subscription revenue, she added. There are hardware costs associated with Super Cruise, including cameras, radar and the driver attention system. "However, software tends to be very profitable," Edward Jones analyst Jeff Windau said. "Additionally, if it is a feature the customers value, you could see a high renewal rate (recurring revenue) and it could drive customer loyalty to the brand when they look for a new car." Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here.
