Declining RevenueMulti-year top-line decline erodes scale economics and weakens the firm’s ability to absorb fixed costs. Continued revenue contraction undermines cash generation, reduces bargaining power with suppliers, and makes funding EV product investments and margin recovery more difficult absent structural revenue stabilization.
High LeverageAbove-normal leverage raises interest and refinancing burdens and limits financial flexibility. In a cyclical auto sector, elevated debt amplifies downside risk if sales remain weak, constrains capital allocation to EV programs or capex, and increases probability of distress without cash-flow improvement.
Negative Cash FlowPersistent negative operating and free cash flows impede self-funding of working capital, capex and EV R&D, forcing reliance on external financing. This creates ongoing liquidity and execution risk, making sustainable reinvestment and margin recovery contingent on a structural cash-flow turnaround.