This week’s earnings reports make two things clear about the viability of the electric vehicle future: EV-only companies are continuing to struggle and lose lots of money, and having wealthy investors who are willing to pour money into your money-losing operation is the difference between survival and bankruptcy.

Two of the big US-based EV-only companies — Rivian and Lucid — reported their second quarter earnings this week. Lo and behold, there’s still a lot of red ink being spilled.

Lucid reported a net loss of $643 million for the second quarter, a slight improvement over the $764 million it lost in the second quarter of 2023. And Rivian said it lost a staggering $1.46 billion, $300 million worse than the same period last year.

Fortunately, both companies have rich friends in their corner who are willing to help tide things over until the balance sheets become more, well, balanced. Rivian has Volkswagen, which recently announced its intentions to invest up to $5 billion in the adventure-themed EV company. And Lucid has Saudi Arabia’s Public Investment Fund, a majority shareholder, which said it would pump an additional $1.5 billion into the luxury EV firm to help extend its lifespan.

We should also have Fisker, another EV-only company’s earnings to pore through, but it declared bankruptcy in June. Unlike Rivian and Lucid, Fisker didn’t have a wealthy backer that could shore up its finances — but not for lack of trying.

These situations help emphasize a stark reality for these so-called “pure play” EV companies. With no gas or hybrid vehicle sales on which to fall back on, Rivian and Lucid are feeling the pinch of cooling EV demand much more acutely than any of their rivals in the legacy auto industry. They’re racing to add new vehicles to their lineups — Lucid with the Gravity SUV, and Rivian with the R2. But they need to spend a lot of money to get there on engineering, factory space, parts, labor, and more.

Once they do, they theorize they can attract new customers with more models and better prices. But until then, they are stuck in the so-called “EV valley of death,” in which they have scaled up production but aren’t bringing in enough revenue to cover operational costs. Add to that a demand situation in which EV sales are growing slower than expected, and Rivian and Lucid are still facing a grave situation.

Lucid said it’s on track to sell an estimated 9,000 Air sedans this year “and will continue to prudently manage and adjust production to meet sales and delivery needs.” Rivian says it expects to produce 57,000 vehicles this year — roughly the same number as 2023 — and is on track to achieve a “modest gross profit” in the fourth quarter.

Lucid and Rivian are both trimming costs as they barrel ahead. Rivian released upgraded versions of its R1T truck and R1S SUV that are simpler and cheaper to make. Lucid laid off around 400 employees, or 6 percent of its workforce.

But both companies have been able to avoid some of the more dire cost-cutting measures of other EV-only companies thanks to their ability to attract big investors. Rivian has already raked in $1 billion from VW and is expected to collect an additional $4 billion, as long as both companies can finalize the deal before the end of the year. And affiliates of Saudi Arabia’s Public Investment Fund have committed to purchasing $2.5 billion of Lucid stock this year.

During this week’s earnings call, both companies were forthcoming about the role of their outside investors.

“A really important part of what this deal represents for us is it really eliminates a lot of the risk that was seen around our balance sheet,” Rivian CEO RJ Scaringe said of the VW deal, “and allows us to focus the launch of R2 still in Normal, still using our Normal facility.”

Lucid CEO Peter Rawlinson was even more blunt in response to questions about overreliance on the largesse of the company’s majority shareholders.

“It’s often portrayed. How long is it before Saudi is going to get fed up with Peter playing with his cars?” Rawlinson said during the call. “It’s not that. We have regular dialogues.”