Elon Musk, the CEO of Tesla, has issued a stark warning to electric vehicle rival Rivian as the company faces financial turmoil. Following Rivian's announcement of a disappointing quarter and future outlook, Musk took to X to express his concerns, predicting that the company could face bankruptcy within six quarters if significant changes are not made. He emphasized the importance of cutting costs drastically and urged Rivian executives to reside in the factory to avoid potential demise.

Rivian's struggles were evident as its shares plummeted by as much as 26% after the market opened, marking the largest drop since the company went public in 2021. CEO RJ Scaringe attributed the challenges to high interest rates impacting demand for electric vehicles. The company is aiming to address these issues as it plans to unveil its R2 midsize SUV on March 7, priced at around $50,000 to compete with Tesla's Model Y.

Despite Rivian's future product developments, there are concerns about its market share, accounting for only 4.2% of EV sales in the fourth quarter of the previous year compared to Tesla's dominance at 55.1%. Musk highlighted the importance of achieving volume production with positive cash flow, suggesting that Rivian still has a long road ahead to establish itself in the competitive EV market.

While Rivian navigates financial uncertainties and production challenges, legacy automakers like Toyota are experiencing success with hybrid vehicle sales. The landscape of the EV market continues to evolve, with Rivian facing pressure to innovate and adapt to changing consumer demands. However, with strategic adjustments and a focus on efficiency, Rivian strives to overcome its current obstacles to secure its position in the electric vehicle industry.