Over the past 75 years, many startups have tried to crack the code and enter the U.S. automotive market. Virtually none have succeeded.
Tesla is the rare exception, taking advantage of the emerging interest in battery-electric vehicles. Its sales nearly doubled during 2021, rising to 960,172 vehicles. And, with two more plants opening — in Berlin and Austin, Texas — it’s expected to quickly blast through the 1 million mark this year. That is providing a note of hope for the dozen or more competitors hoping to match the California-based automaker’s success.
Long-skeptical investors have recently shown great readiness to embrace the most promising of these newcomers. But some are struggling for capital and may not make it into production, analysts warn.
“The potential some of these startups have is that they’re breaking into a nascent EV market that has doubled in size this past year and is ready to take off,” said Sam Abuelsamid, principal auto analyst with Guidehouse Insight.
“There is suddenly a vibrant market that traditional manufacturers have been slow to tap into,” Abuelsamid said, noting that “the window of opportunity is a narrow one and closing fast,” as companies like General Motors, Ford, Hyundai and Volkswagen prepare to unleash scores of new, long-range BEVs of their own by mid-decade.
Here’s a look at some of the strongest and weakest of the EV startups, as well as a few others yet to clearly show whether they can plug in and light up the market.
Rivian is arguably the strongest of all the new startups, most analysts agree. The company has piles of cash, and the backing of early investors like Ford and Amazon. The online retailer’s Prime service has an outstanding order for 100,000 Rivian delivery trucks. And its R1T pickup is now on sale — and was named Motor Trend Truck of the Year. Production hiccups worried investors, but it still has a market capitalization north of $90 billion, more than either GM or Ford.
Lucid CEO and Chief Technology Officer Peter Rawlinson was the man who whipped the original Tesla Model S into shape — and that helped him set new benchmarks for the startup’s own Lucid Air sedan. Two versions of the initial launch edition are now on sale, one making 1,100 horsepower, the other delivering over 500 miles range, an industry best. The price tag? An exotic $160,000. But Lucid has plans for a mix of more mainstream sedans and SUVs.
Fisker takes its name from Henrik Fisker, who earned kudos as a designer for Aston Martin. He launched his first brand with the plug-in Karma sports car. The company crashed spectacularly but the Danish-born entrepreneur is back with a new startup focused solely on BEVs — and an unusual business model. The Ocean SUV was designed in house, but its production will be outsourced to avoid the multibillion-dollar cost of building a factory. Future models, now under development, will follow the same path.
Polestar is a little different from other names on this list because it is actually a spin-off of Volvo and its Chinese parent Geely. “But they’re still a standalone brand,” said Abuelsamid, that will have to rise or fall on its own merits. Polestar’s first model was a limited-edition, high-performance plug-in hybrid, but the Polestar 2 SUV and all future products will be purely electric.
Neo is one of a number of domestic Chinese EV startups. But it has strong aspirations to enter the U.S. market — and an unusual business model that will either make or break it, analysts suggest. After struggling for cash in 2019, it has a big infusion, growing sales and a design that relies on swapping batteries so motorists don’t have to wait around while charging. The approach has its drawbacks — but could prove useful for fleet and commercial buyers.
On the cusp
VinFast, Vietnam’s first real car company, was formed in 2017 and had its first model, a gas-powered SUV, on sale two years later. Now, it’s focusing exclusively on BEVs, showing off two at the recent L.A. Auto Show. It just went through a major management shake-up, but “If a company from any country in the world could make it happen, it’s the Vietnamese,” said Michael Dunne, head of consulting firm ZoZo Go. “They are the most tenacious, ambitious people on the planet.”
Canoo designers certainly don’t want to play it safe. Its minivans move passengers right up to the nose, much like the old VW Microbus, taking advantage of a skateboard-like platform with motors and batteries mounted underneath. That yields a massive interior for passengers and cargo. Canoo’s products have generated plenty of buzz, but “it’s still unclear people will want to buy them,” said Abuelsamid.
Atlis is one of an assortment of startups set to roll out all-electric pickups, though its XT primarily will target fleet and commercial customers who need heavy-duty capabilities. Yet, what many observers are focusing on is the unusual battery-tech Atlis is developing. Its square cells are designed to handle up to a megawatt of power, meaning they could charge up as fast a driver could fill the gas tank on a regular pickup.
An uncertain future
Faraday Future was, not that many years ago, seen as the next Tesla. It rolled out a series of crowd-pleasing concept vehicles, including the FF91 supercar, but has so far failed to bring anything close to production. After its Chinese billionaire founder pulled out, it had to halt work on an Arizona assembly plant. Ever since, it has bounced from one plan to another and continues struggling to find cash.
Byton has suffered similar setbacks to Faraday Future. It was seen as extremely promising when it debuted its M-Byte concept at CES just two years ago, but constant management turnover, cash shortages and other problems have crippled the project. The company is now abandoning its U.S. headquarters and retreating to China.
Bollinger had a quirky genesis, with its founder wanting an environmentally friendly work truck for his farm in New York State. Like the Atlis XT, the Bollinger B2 pickup and B1 SUV are aimed at heavy-duty applications, with massive towing and stump-pulling capabilities. But production is way behind schedule, despite setting up a small suburban Detroit operation, with the company reportedly short on cash.
Lordstown Motors seemed on its way to stardom with its own Endurance commercial pickup. Then, short-seller Hindenburg Research released a report claiming Lordstown’s advance sales numbers were “fake,” a charge the company effectively acknowledged. Cash raised through a SPAC deal vanished and the company had to sell its Ohio factory. But Lordstown could yet survive, since Foxconn — which bought the factory — has said it might now contract to build the Endurance.
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