Shares of Rivian Automotive (RIVN 0.50%) were trading lower on Thursday, a day after The Wall Street Journal reported that rival electric vehicle (EV) maker Fisker (FSR +0.00%) may be preparing to file for bankruptcy.
As of 2 p.m. ET, shares of Rivian were down about 8.3% from Wednesday's closing price.
Rivian last week revealed its next model, the R2 midsize electric SUV. Image source: Rivian Automotive
Key rival Fisker is in dire straits
The Journal reported on Wednesday afternoon that Fisker has "hired restructuring advisors to assist with a possible bankruptcy filing," news that sent the struggling electric vehicle maker's stock down by over 45% in after-hours trading.
It wasn't exactly a surprise, though. In a "preliminary" earnings release on Feb. 29, Fisker had said it likely doesn't have enough cash to survive the next 12 months, that it will lay off 15% of its workforce, and that it was hoping to get a lifeline from a major global automaker.
Fisker had once hoped to build and sell over 40,000 of its Ocean electric SUVs in 2023. But after a series of early production snags -- and after demand seemingly failed to materialize -- the company built just 10,193 and managed to deliver only 4,929 of those to customers before year-end. Now, it's short on cash, and -- unless that lifeline suddenly materializes -- likely headed for bankruptcy.
What does that have to do with Rivian? Rivian is a different company in a very different situation -- but both Rivian and Fisker are members of a cohort of EV start-ups that went public earlier this decade, each with investors hoping it would be the next Tesla.
Most of the other EV start-ups from that era are down today as well.
Rivian is in better shape, but EV stocks tend to move together
Rivian has its own challenges, of course. But the company delivered over 50,000 vehicles last year, it had $10.4 billion in cash and available credit lines as of the end of 2023, it had over 68,000 preorders for its next new model a day after it was revealed, and -- crucially -- it was able to raise cash twice last year and should be able to do so again if the need arises.
But with Fisker seemingly on the verge of collapse, it's not really surprising that Rivian stock is taking a hit today.
