- A new group of electric-vehicle startups is preparing to release their debut vehicles in the coming years.
- But most electric-vehicle startups will go out of business within the next three years due to manufacturing issues, according to Henrik Fisker, CEO of the electric-vehicle startup Fisker Inc.
- Production challenges nearly put Tesla out of business, but the electric-car maker is beginning to overcome them.
- Do you work for an electric-vehicle company? Do you have an opinion on how your company or the industry as a whole will handle the fallout from the coronavirus? Email this reporter at firstname.lastname@example.org. You can also reach out on Signal at 646-768-4712 or email this reporter’s encrypted address at email@example.com.
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A new wave of electric-vehicle startups is preparing to release their first vehicles in the coming years. Rivian will challenge Ford’s F-150 with its R1T electric pickup truck, Lucid says it can top Tesla’s Model S with its Air luxury sedan, and Canoo wants to do away with car ownership with its eponymous, subscription-only vehicle that resembles a futuristic minivan.
But, according to Henrik Fisker, CEO of the electric-vehicle startup Fisker Inc., most of the new companies planning to take on Tesla will go under within the next three years as they struggle with manufacturing.
“A majority of the new EV startups will disappear over the next 24-30 months, as they have focused on manufacturing, and they will take too long to learn this highly complex, difficult area,” Fisker told Business Insider. “They will not be given enough runway to do trial-and-error. Further, the next wave of EV buyers will have less patience for initial poor build quality and lack of reliability.”
Automotive manufacturing is complex and expensive, requiring high fixed costs and the careful assembly of thousands of parts made by different suppliers. Tesla, the only surviving member of an earlier generation of electric-vehicle startups that included Fisker’s Fisker Automotive, struggled with manufacturing for years.
Tesla CEO Elon Musk said the electric-car maker nearly went bankrupt trying to fix issues with the production of its Model 3 sedan in 2018. But Tesla has begun to turn a corner on manufacturing, as it launched its newest vehicle, the Model Y SUV, months ahead of schedule and built a new factory in Shanghai in less than a year.
Some of Tesla’s new competitors, like Nio and Canoo, are outsourcing production to other companies, while others, like Rivian and Fisker, will handle production themselves. Fisker Inc. plans to release its first vehicle, the Ocean SUV, in 2022.
Electric-vehicle startups will not be the only auto companies that fail in the wake of the COVID-19 pandemic, Fisker said. As manufacturing scale and attractive pricing become more important, some automakers and suppliers that make gas-powered cars will also go by the wayside.
“The automotive industry will never look the same again, there is no ‘back to normal,'” Fisker said. “Value for money will be a focus for a much higher percentage of buyers than ever before, combined with increased awareness of sustainability.”
Do you work for an electric-vehicle company? Do you have an opinion on how your company or the industry as a whole will handle the fallout from the coronavirus? Email this reporter at firstname.lastname@example.org. You can also reach out on Signal at 646-768-4712 or email this reporter’s encrypted address at email@example.com.