It’s going to be tough, and it’s going to be uncertain. That was the clear message from Rivian and Lucid, America’s two most promising electric vehicle manufacturers, as they gave a grim forecast for the future of the EV market.

After a brief sugar rush of sales, Tesla’s top rivals are bracing for a brutal hangover, hit by a double punch of hostile policies from the second Trump administration: crippling tariffs and the fast-approaching end of the federal EV tax credits that have propped up the industry for years.

The Double Punch: A Tax Credit Cliff and a Tariff Squeeze

The first blow is the expiration of the federal EV tax credits. The credits, a key feature of the Biden-era Inflation Reduction Act (IRA), were designed to encourage the adoption of clean vehicles by giving buyers up to $7,500 off a new EV. Under President Trump’s “One Big Beautiful Bill,” that support is set to vanish after September 30. For consumers, this effectively means a sudden $7,500 price hike on already expensive vehicles.

The second blow comes from the ongoing trade war. As part of the economic conflict President Trump launched against other nations, vehicles and components imported into the United States are subject to a 25% tariff. While the goal is to encourage automakers to build in America, even companies like Rivian and Lucid, with factories in Illinois and Arizona, are getting squeezed. They rely on imported raw materials, especially from China, to manufacture their batteries and other essential parts.

This is hitting their bottom line right now.

“Changes to EV tax credits… and tariffs are expected to have an impact on the results and the cash flow of our business,” RJ Scaringe, the CEO of Rivian, told analysts during an August 5 conference call.

His CFO, Claire Rauh McDonough, put a number on it, warning that increased tariffs “are expected to have a net impact of a couple of thousand dollars per unit for the remainder of 2025.” She added, “We’re actively studying tariff mitigation strategies to best position the company.”

A Short-Term Boom, a Long-Term Bust

In the short term, this policy cliff is creating a sales boom. Both Rivian and Lucid expect the current third quarter to be their best of the year as consumers rush to lock in the $7,500 tax credit before it disappears.

“We anticipate the third quarter to be our highest delivery quarter for the year across both our consumer and commercial vehicles,” Rivian said in its earnings release.

The numbers show they have cars to sell. In the second quarter, Rivian produced 5,979 vehicles and delivered 10,661. Lucid produced 3,863 vehicles, an 83% year-over-year increase, and delivered 3,309.

But after September 30, the party is over.

“We are expecting a pull forward in demand now in Q3 and then, you know, softening in Q4,” Lucid interim CEO Marc Winterhof told Yahoo! Finance on August 6. “We have defined a number of countermeasures to overcome that problem.”

The problem is that those “countermeasures” almost certainly mean offering steep discounts, which is a dangerous move for companies already bleeding cash. Lucid has already trimmed its 2025 production forecast, now expecting to build between 18,000 and 20,000 EVs.

The Brutal Financial Reality

These headwinds are hitting at the worst possible time. Rivian and Lucid both sell premium, high-priced vehicles. The Rivian R1T pickup starts at $70,990, while the Lucid Air sedan starts at $70,900. Without a tax credit, those prices become even harder for mainstream buyers to swallow.

But the most terrifying numbers are the losses. In the second quarter, Rivian posted a net loss of $1.1 billion. According to a Reuters analysis, that means the company lost a staggering $118,375 on every single vehicle it built.

Lucid’s situation is even more dire. Backed primarily by Saudi Arabia’s Public Investment Fund (PIF), the company lost $539 million in the second quarter, which translates to a loss of $161,000 per vehicle.

For companies hemorrhaging cash at this rate, the loss of a major consumer incentive combined with rising costs from tariffs is a potentially existential threat.

The question now is what levers they can pull to survive. Rivian is pinning its hopes on a more affordable, mass-market vehicle, the R2, which it plans to launch in 2026 with a target price of around $45,000. But can it survive the next two years to get there? Both companies still have cash to fund their operations, but in this new, harsher environment, the clock is ticking faster than ever.