Two EV manufacturers are seeking cash infusions this week to bring their delayed vehicles to market.
Nikola, a Phoenix-based electric truck maker, said in a securities filing Tuesday that it plans to raise funds through a $400 million stock offering. Luxury EV company Lucid filed a day prior for the right to issue up to $8 billion in new stock over the next three years.
The filings underscore the current struggle among EV makers that went public via mergers with special purpose acquisition companies (SPACs). Both Lucid and Nikola went public in SPAC deals that analysts say overvalued the now-struggling startups.
The SPAC merger boom provided a cash infusion to a number of EV startups. However, those capitally rich days have disappeared as companies grapple with production bottlenecks, inflationary pressures and supply chain constraints. Downward pressure on shares have eviscerated valuations, making liquidity even more challenging.
Arrival, Canoo, Faraday Future and Lordstown are just a few of the EV SPAC companies to face a cash crunch. For instance, Faraday Future has issued several warnings this year that it needs more money to execute plans to launch three models in the coming years. The company, which went public in a 2021 SPAC deal, has delayed the launch of its first vehicle, the FF91, for years but said it will arrive by the end of the year.
Some, like Arrival, have turned to cost-cutting measures and layoffs. Others, including now Lucid and Nikola are turning back to the market.
Nikola said earlier this month that it remains on track to deliver between 300 and 500 of the trucks by the end of the year. So far, it has produced 50 Nikola Tre BEVs in its Coolidge, Arizona, factory.
Lucid has lowered its annual production target several times this year, from 20,000 units to less than 7,000. Still, the company launched a $249,000 high-end version of its luxury Lucid Air sedan at Monterey Car Week in August. The Lucid Sapphire Air uses a three-motor powertrain to boost the car’s performance.