Several electric vehicle (EV) startups are facing an uncertain future, with at least 18 predicted to deplete their cash reserves by the end of 2024, according to a recent Wall Street Journal analysis.
What Happened: The study indicates that many EV and battery startups that went public recently have experienced a significant drop in their cash flow. This includes high-profile companies like Nikola Corp. (NASDAQ:NKLA) and Fisker Inc. (NYSE:FSR), which previously garnered substantial investor attention with their ambitious industry-transforming plans.
However, these startups have been hit hard by rising costs and production problems. Three firms — Lordstown Motors, Proterra, and Electric Last Mile Solutions have already declared bankruptcy, while others such as Romeo Power (NYSE:RMO) and charging company Volta (NYSE: VLTA) have been sold at significantly lower valuations.
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While some of the remaining firms are trying to reduce costs and raise capital, the median stock for these startups has nosedived over 80% since their market introduction, wiping out tens of billions of dollars in market value.
The sudden reversal in the fortunes of ...