It’s been a bad year so far for EV startups. Things could get much worse.
The problem isn’t that electric vehicle sales aren’t growing. They are, despite a slowdown. It’s because they’re not growing as fast as automakers expected.
“The pace that all automakers expected is not there,” said former Ford boss Mark Fields told CNBC’s Screaming in the street on Friday. Because of this, he added, we are seeing price reductions, increasing inventories and increased incentives from electric vehicle manufacturers.
He found that early adopters of electric vehicles have different purchasing criteria – such as innovation and environmental impact – than average buyers. But many of them have already purchased their vehicles, and now EV makers need to win over everyday consumers who are more concerned about cost and convenience. In addition to repair costs and resale value, charging time and inadequate charging infrastructure also play a major role for them.
“The consumer in the mainstream market will say, ‘Once you figure this all out, I’ll really consider this,'” Fields said. “But until then, I will either stick with my combustion engine or alternatively, as you can see, with hybrids, which is a really great solution for consumers at the moment.”
Sales of hybrid vehicles are increasing sharply Toyota advantagethe pioneer of technology and has been warning for a long time that the transition to electric vehicles will take longer than many believed. Ford is also enjoying rising hybrid sales and plans to offer more such vehicles, even as it scales back its electric vehicle plans amid weaker-than-expected sales.
But Fields has no doubts about the transition to electric vehicles.
“The transition will definitely happen, but it will take longer,” he said. And that, he added, spells trouble for electric vehicle makers, who have begun in recent years expecting faster EV adoption.
“With this longer path, some of them are going to be in real financial trouble, and that’s what you’re seeing right now,” he said.
Struggling EV startups
On Wednesday, the Wall Street Journal reported The Tesla Challenger Fisker had hired restructuring advisors to help with a possible bankruptcy filing. Shares of the electric vehicle maker fell about 50% the next day. She somewhat recovered on Friday after Fisker said it “often” works with outside advisers and is focused on partnering with a major automaker, Reuters reported reported It could be early this month Nissan.
But Fisker’s market cap is $97 million, which is down $4.1 billion in 2021. It is at risk of being delisted from the New York Stock Exchange and saw job cuts last month warned It could be that it can no longer be continued.
Meanwhile, Amazon-backed Rivian recently announced it would postpone plans for a factory in Georgia to save billions of dollars Launch of its next modelthe R2.
This followed Tesla boss Elon Musk proposal last month that Rivian, which had just announced layoffs, only had about six quarters left before bankruptcy. “They need to cut costs massively and the management team needs to stay in the factory or they will die,” he further posted X.
Rivian’s market cap has declined since 2021 tip of $153 billion to $10.8 billion today.
As for Supported by Saudi Arabia Lucid, its market cap has fallen sharply a culmination of $91.4 billion in 2001 to $6.2 billion today. Last month it was said that it would be so Only build approx 9,000 electric vehicles this year – a far cry from the 90,000 predicted for 2024 just three years ago.