First Lordstown Motors said it would back off investing in the tools to build its electric trucks until capital markets loosen up. Two days later, EV startup Canoo issued a "going concern" notice to alert investors warning that it could run out of cash.
Without more money, some EV startups face the real danger of not making it. Those that can raise money could end up paying a lot more for it or just not getting as much as they need.
"The story has changed," said Bloomberg Intelligence analyst Joel Levington. "These companies are burning huge amounts of cash. Every day that the market goes down their liquidity gets more challenged."
Levington said the problem is, convertible debt for many smaller EV companies with little or no revenue is costing more than 10 percent. They can't issue much secured debt because they lack hard assets to put up as collateral. With stock prices depressed, issuing equity will be very dilutive to existing shareholders.