It wasn’t that long ago that EV automakers were saying their biggest challenge was building enough cars fast enough to satisfy the massive demand. Now? Weeeeeeelllll…not so much. In fact, several EV startups (the little guys, new brands created specifically to cater to the EV market) are singing a different tune, and it’s not one with great harmonies.
We’ve already talked about how EVs are struggling to get market traction, and why. Now we are starting to see the results of these struggles.
Here are Five Fast Facts on EV startup struggles:
- 👇 Down It Goes - Pretty much everything about EV startups is going down. Rivian and Lucid, two boutique luxury EV brands, are pointing at reduced demand and lowering their production estimates to match. Their stock prices are down 38% to an all-time low of $10.06, and down 19% to just $3.02, respectively. You know it’s bad when Starbucks costs more than a share of stock.
- 🤔 What Gives? They’re saying it’s because of high interest rates and general economic uncertainty. That is undoubtedly part of the problem, but the reality is the demand simply isn’t there and they’re having a hard time persuading car buyers that it is.
- 💸 Priced Out - Pricing is a huge component of that failure to persuade. Virtually all EV makers are slashing prices and offering incentives in order to draw in a few more buyers, but it’s not working very well. During this time of universally high prices, the average price of a low-end EV (just over $50k) is bad enough, so buying a luxury EV at a cool $90k (or much more) isn’t really in the budget for most folks who are worried about how they’re going to buy food.
- 🛟 Lacking In Life Rafts - The big automakers like Ford, GM, and even to some extent Tesla can stay afloat during periods of low demand because they have bigger and more diverse portfolios of products and services. Brands like Rivian and Lucid don’t have that luxury, and have to burn through their investment capital that much faster.
- 😨 Rock, Meet Hard Place - It’s tough to be an EV startup. The demand for EVs in general – not to mention luxury EVs – is really not growing, but to change their cars to meet the demand would largely take away the very thing that makes them stand out from the crowd. Oh, what to do?
🔥Bottom line: It will be interesting to see how these EV startups attempt to recover and continue competing against the big boys. Or will they be able to at all? Time will tell.
What do you think about EV startups?
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