Shares of electric vehicle startups Rivian Automotive Inc. and Lucid Group Inc. reached all-time lows on Thursday, following Ford Motor Co.'s decision to slash prices on its electric pickup truck. This move has intensified concerns among investors about an industrywide price war on electric autos, as it could negatively impact profit margins.

Rivian experienced a significant decline of 6.8%, ending the day at $9.57, which is the first time it has fallen below the critical $10 level since its initial public offering in November 2021. Similarly, Lucid saw a 5.7% drop, closing at $2.50, marking its lowest closing price ever.

The diminished demand for electric vehicles since late 2023 has prompted car manufacturers, including Tesla Inc. and traditional companies like Ford and General Motors Co., to lower prices on their vehicles in an attempt to stimulate sales. Tesla's lower-than-expected first-quarter deliveries have raised doubts about the industry's recovery and have heightened the potential for future price cuts.

Ford's recent plans have further fueled these concerns. Reports of price reductions for the F-150 Lightning EV have sent shockwaves through the EV market, particularly impacting Rivian and Lucid. Bloomberg Intelligence analyst Steve Man explains the additional challenges faced by these startups, which could be exacerbated by another round of EV price cuts. This situation threatens to erode their profit margins and cash reserves at a time when they should be conserving cash.

Investors are closely monitoring the implications of Ford's price cut strategy, as it directly affects the viability and profitability of Rivian and Lucid. The companies, already operating at a loss, face the risk of significant delays in achieving profitability due to the ongoing price war in the electric vehicle market.

The future remains uncertain for Rivian and Lucid, as they navigate the challenges of a highly competitive and rapidly evolving industry. Their ability to adapt to market dynamics and maintain stable cash reserves will be crucial in determining their long-term success and investor confidence in the electric vehicle sector.