It’s been a bad year for electric vehicle startups. Things could get a lot worse.
The problem isn’t that electric vehicle sales aren’t growing. They aredespite the slowdown. The fact is that they are not growing as fast as automakers expected.
“The pace that all automakers expected has not been achieved,” said former Ford CEO Mark Fields. said CNBC Screaming on the street on Friday. That’s why, he added, we’re seeing lower prices, higher inventories and more incentives from EV makers.
He noted 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 cars, and now it’s up to EV makers to win over the more cost- and convenience-conscious mainstream consumers. For them, in addition to repair costs and resale value, charging time and inadequate charging infrastructure are of great importance.
“The mass market consumer will say, you know what, when you figure this out, I’ll really think about it,” Fields said. “But until then, I’ll either stick with my internal combustion engine or alternatively, as you can see, hybrids are a really great solution for consumers right now.”
Sales of hybrid vehicles are soaring, largely to the benefit of Toyota, which pioneered the technology and has long warned that the transition to electric vehicles will take longer than many expected. Ford is also enjoying growth in hybrid sales and plans to offer more of them, even as it slows its electric vehicle plans given weaker-than-expected sales.
But Fields has no qualms about the transition to electric vehicles.
“The transition will definitely happen, but it will take longer,” he said. And that, he added, poses a challenge for electric vehicle makers launched in recent years in anticipation of faster EV adoption.
“On this longer journey, some of them are going to run into real financial problems, and you’re seeing that happen right now,” he said.
Struggling electric vehicle startups
On Wednesday Wall Street Journal reported that Tesla challenger Fisker has hired restructuring consultants to help with its possible bankruptcy filing. The next day, shares of the electric vehicle maker fell about 50%. They recovered somewhat on Friday, after Fisker said he works “frequently” with outside consultants and that he is focused on trying to partner with a major automaker, as reported by Reuters reported earlier this month there may be a Nissan.
But Fisker’s market cap is $97 million, which is below $4.1 billion in 2021. The company is at risk of being delisted from the New York Stock Exchange, and last month it cut jobs and warned it may not be able to continue as a going concern.
Meanwhile, Amazon-backed Rivian recently announced it would delay plans for a plant in Georgia to save billions of dollars, helping to allay concerns that it lacks sufficient funding to launch its next model, the R2.
This follows Tesla CEO Elon Musk last month suggesting that Rivian, which just announced layoffs, was only six quarters or so away from bankruptcy. “They need to cut costs significantly and management needs to live in the plant or they will die,” he wrote on X.
Rivian’s market capitalization has fallen compared to 2021. peak Today from $153 to $10.8 billion.
Concerning Backed by Saudi Arabia Lucid, its market capitalization fell from peak From $91.4 billion in 2001 to $6.2 billion today. Last month he said he would build only about There will be 9,000 electric vehicles produced this year, a far cry from the 90,000 forecast for 2024 just three years ago.