Rivian Automotive and Lucid Motors racked up billions in losses last year amid modest sales numbers, rising factory incentives and growing uncertainty in the U.S. electric vehicle market following the November election of President Donald Trump.

Rivian, which launched its first model in late 2021, posted a $4.7 billion net loss in 2024, according to the company’s Feb. 20 earnings report. That was a moderate improvement over its $5.4 billion net loss in 2023.

Lucid, which also sold its first model in late 2021, reported a $2.7 billion net loss last year, the company said Feb. 25. A year earlier, Lucid posted a net loss of $2.8 billion.

The cash burn for the California startups comes as the U.S. EV market faces new challenges.

Trump has suggested he could eliminate the $7,500 consumer tax credit for EVs, along with other subsidies such as automaker tax credits for battery production.

“Whatever the level of uphill battle the EV makers thought they were facing, it’s going to get steeper,” said Karl Brauer, executive analyst at iSeeCars.

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U.S. electric vehicle demand — even with tax breaks and factory discounts — looks soft this year as consumers flock to gasoline-electric hybrids, Brauer said. And Trump is likely to end EV subsidies sooner rather than later, further weakening demand, he added.

Rivian sold 51,579 vehicles last year, a 2.9 percent increase over 2023, the company said. The EV maker has forecast 2025 deliveries between 46,000 and 51,000. Rivian makes the R1T pickup, R1S crossover and commercial vans.

Lucid said its sales rose 71 percent to 10,241 vehicles last year. But its factory incentives rose to $15,542 per vehicle compared with $10,377 in 2023, Motor Intelligence said. Lucid makes the Air sedan and the Gravity crossover, which it launched in December.

Rivian and Lucid have received strong industry praise for their luxury EVs, which start above $70,000 with shipping, but the startups are still losing too much money, analysts say. Both brands are scheduled to launch less expensive crossovers next year.

“The coolest stuff in the world doesn’t matter if it’s on the trash heap with all the rest of the bankrupt companies,” Brauer said, noting bankruptcies by EV startups Fisker, Lordstown, Canoo and Nikola during the past two years.

Rivian and Lucid still have brand value

To be sure, Rivian and Lucid still have significant financial support and brand value, making them attractive as parts and software suppliers to bigger automakers, Brauer added.

Rivian is sharing its electrical architecture and software with Volkswagen Group as part of a $5.8 billion joint venture. Lucid has the financial support of Saudi Arabia’s Public Investment Fund and is shopping around its EV technology to other automakers.

But both startups are running out of runway, Brauer said. Rivian could be absorbed into Volkswagen Group or a tech company in the next few years, he said. Lucid could shift its focus to Saudi Arabia, where it is building a major factory.

“You’ve got all these factors out there, and none of them are very encouraging for electric vehicles,” Brauer said. “High cost, consumer demand and a less friendly regulatory environment in the U.S. — and more companies are producing them.”

As part of its fourth-quarter financial report, Lucid announced that CEO and co-founder Peter Rawlinson was stepping down from leadership and would be an adviser. The earnings announcement sent Lucid stock down 15 percent in two days.

Cash reserves at Rivian and Lucid

Rivian and Lucid said they have enough liquidity for their crossover launches in 2026. Both the Rivian R2 and the Lucid midsize crossover will start around $50,000 before shipping, the companies have said.

The new vehicles are designed to reach a much larger “total addressable market” than current Rivian and Lucid offerings, allowing the startups to scale production and bring down costs, the companies have said.

Rivian said it had cash and cash equivalents worth about $5.3 billion at the end of 2024, down from about $7.9 billion at the end of 2023. Rivian has one factory, in Normal, Ill., but plans to build another in Georgia.

CFO Claire McDonough said on the earnings call that Rivian made progress cutting production costs in the fourth quarter and raising revenue, allowing it to meet its forecast of delivering its first gross profit.

“We reduced our automotive cost of goods sold by $31,000 per vehicle delivered in the fourth quarter while increasing our automotive revenue per unit,” McDonough said. “We also earned revenue from the sale of nearly $300 million of regulatory credits.”

Rivian has not forecast when it expects to post its first net profit.

Lucid said it had cash and cash equivalents of about $1.6 billion at the end of 2024, an improvement over the $1.4 billion it reported at the end of 2023. Lucid makes its models at a plant in Casa Grande, Ariz.

Gagan Dhingra, Lucid’s chief accounting officer, said on the earnings call that the young automaker had trimmed its gross loss in the fourth quarter and expected continued improvement.

“We made significant improvement in gross margins, nearly halving them on a year-over-year basis, and we expect significant improvement in 2025,” Dhingra said. “We successfully managed operating expenses despite strategic growth investments, delivering on our guidance for operating margin improvement year over year.”

But Wall Street analysts warned last month that both EV makers face difficult market conditions this year.

Bank of America downgraded Rivian stock after its fourth-quarter earnings report.

“RIVN remains one of the most viable among the startup EV OEMs and is making progress towards sustainably positive gross margins. However, the 2025 outlook was softer than we had expected,” Bank of America said.

Wall Street firm CFRA said it’s “skeptical [Lucid] will be able to turn the corner toward profitability, even if its volumes more than double in 2025.” It rated the stock as a “strong sell” despite Lucid’s production forecast of about 20,000 vehicles this year. In 2024, the EV maker produced 9,029.