Inspired by the remarkable success of Tesla in the 2010s, a slew of new automaker ventures rose in hopes of claiming their own share of the emerging global electric vehicle market. New U.S. government policies to encourage EV adoption fanned their ambitions, as did a receptive stock market and a new finance approach know as reverse mergers, or Special Purpose Acquisition Companies, which made billions of dollars in cash available overnight to develop EVs and build and tool the necessary factories for them.
Tesla was once a startup but is now one of the nation’s leading manufacturers. Rivian Automotive, following in its footsteps, is still dealing with ramp-up challenges, but is no longer a true example of a startup.
But for several of the aspiring new ventures of recent years, the car business has proven difficult.
The market reality has revealed fickle shoppers and increasingly competitive sales landscapes. Strategic plans have been complicated by rising production and material costs, hard-to-find workers and shortages in semiconductors and all the components that semiconductors require. And industry thinking has continued to churn about how, where and when EV models will be produced.
All these things have not stopped the great wave of EV startups. They have just made the going tougher and slower.
Here is a summary of where the leading new ventures stand.
Aptera, a Carlsbad, Calif., startup trying to build a three-wheeled, two-seat EV powered by solar panels, completed the vehicle’s first production molds in late April. Aptera said in a regulatory filing at the end of last year that it still needed another $50 million to get to production.
Aptera is working with the C.P.C. Group in Modena, Italy, to produce the composite bodies for its vehicles. Assuming the delivery of necessary capital, Aptera is aiming to begin production this year. The company said customers have reserved more than 40,000 vehicles.
As of its latest regulatory filing, which covers 2022, Aptera was burning through about $3 million a month in operating expenses, leaving it with about four months of cash left at the end of the period.
Arrival’s strategy was to produce electric vans and buses through a network of inexpensively built microfactories around Europe and the U.S. But its available cash has declined. In January, the London company announced it was laying off half of the company’s U.S. staff and naming a new CEO, Igor Torgov.
In March, Westwood Capital provided Arrival with a financing line of $300 million in exchange for a lower targeted cash spend of no more than $35 million a quarter that “significantly reduces the size of investment required to fund the business this year,” the company said.
In April, Arrival announced a reverse stock split, an effort to meet the minimum value bid requirement to maintain its Nasdaq listing.
Arrival said it believes it can continue operations into late 2023, while raising more money and making capital investments to start production in late 2024. Still, company leaders have articulated material uncertainties about Arrival’s ability to continue as a going concern.
Two years ago, the young Torrance, Calif., venture Canoo said it would open an assembly plant near Tulsa, Okla., to produce its pod-shaped electric Lifestyle Delivery Vehicle. But plans have been fluid. Later that year, officials also said they would establish their headquarters in Bentonville, Ark. And in April of this year, Canoo announced a plan to open a production site in Oklahoma City.
CEO Tony Aquila said the new manufacturing site’s lease agreement helps “reduce capital burden and dilution for the company by structuring a sale leaseback.” But Canoo has to purchase the Oklahoma City factory site by Aug. 20 to access Oklahoma state incentives.
In its first-quarter earnings call, Canoo said it has been testing 15 of its Lifestyle Delivery Vehicles and will deliver an order to NASA by the end of June. In a 10-Q report filed with the Securities Exchange Commission in May, the company said its earlier site near Tulsa will be used to assemble EV batteries.
Last month, nine years since its founding, Los Angeles startup Faraday Future said it is finally taking orders on its FF 91 high-tech crossover. The FF 91 2.0 Futurist Alliance launch edition starts at $309,000, excluding shipping.
Faraday said in early June it had signed its first sales contract for an FF 91 with Rem D Koolhaas of fashion label United Nude, which created a concept vehicle, the Los-Res Car, in 2015 as part of a design project.
FF 91 delivery volume this year will depend on Faraday’s production ramp-up, the company said.
The EV startup has struggled with financing over the past decade and has burned through more than $3 billion, according to Bloomberg. Faraday said in May it was raising $100 million in debt to support FF 91 production.
Analysts have questioned whether Faraday can survive as a going concern given the FF 91’s price and the company’s shaky financial situation.
The California-based startup, founded by car designer Henrik Fisker in 2016, plans U.S. deliveries of its Ocean crossover this month. The Ocean is assembled by Magna International’s Magna Steyr unit in Austria under contract and launched in Europe with its first deliveries in May.
While the brand based in Manhattan Beach is betting on affordable EVs to drive sales, the first vehicles are launch editions starting at $68,999, plus shipping costs that vary with location. The Fisker Ocean Extreme is rated by the EPA for 360 miles of battery range. The future Sport trim starts at $37,499, excluding shipping.
Fisker said it expects to produce 32,000 to 36,000 vehicles this year. Global reservations for the Ocean were 65,000 as of May, Fisker said. Its next vehicle, the Pear, has 6,000 preorders. U.S. production is planned for 2025 with a starting price of $29,990, excluding shipping.
The automaker said it had about $653 million in cash as of March 31, compared with just over $1 billion in cash a year earlier.
The Southern California automaker has yet to make good on its 2020 promise of its first full-EV, the battery-electric GSe-6, based on the stylish Revero plug-in hybrid sedan.
Instead, Karma, based in Irvine, has been pursuing other business. In January, the company said it will use its production facility to assemble commercial vehicles for the Luxembourg fleet company B-ON. Karma will begin pre-production of B-ON delivery trucks in July and ramp up next year. Karma said it has factory capacity for 30,000 vehicles a year.
The Chinese-funded automaker announced a new president in April, Marques McCammon, who most recently was global managing director at Ricardo. In a May 31 press release, McCammon didn’t provide any details on Karma’s product road map, but he did say the company needs to narrow its focus.
“Our rolling sculpture design and technology will remain core pillars as we boost production of fully electric vehicles in 2024 and reinvigorate the customer experience by doing fewer things, but doing them better,” McCammon said.
Lordstown Motors has had a rough few months. In April, a key investor, the Taiwan-based electronics manufacturer Foxconn, threatened to pull funding because of a decline in stock price. Lordstown then warned investors in a May regulatory filing that the dissolution of its deal with Foxconn could steer the company into bankruptcy. Later that month, Lordstown approved a stock split to boost its price and hoist the company out of its predicament.
If shares remain above $1 for 10 consecutive days, “that may satisfy Foxconn’s (incorrect) interpretation of the closing condition and cause Foxconn to close the transaction,” Lordstown said in a statement. “The Company remains ready, willing and able to close.”
Lordstown also said in its first-quarter earnings report that because of production delays, the failure to find a strategic partner and difficulties raising money, it anticipated stopping production of the Endurance electric pickup truck.
After launching its highly regarded Air sedan in late 2021, Lucid Motors suffered through production issues before output stabilized at its Arizona factory this year. But now the automaker has too much supply.
Lucid’s initial success in attracting preorders from early adopters has shifted to waning demand for the pricey Air.
That’s spurred a fresh marketing campaign and sales incentives that include a $1,299 monthly lease deal on the nearly $130,000 Grand Touring trim.
In addition to competing in the difficult executive sedan segment, Lucid has been hurt by Tesla’s sharp price cuts across its lineup.
Lucid of Newark, Calif., reported first-quarter deliveries of just 1,406 Airs on production of 2,314. It also reported a net loss of $780 million for the period. Lucid is no longer reporting its preorder backlog.
On the bright side, Lucid is preparing next year’s launch of the Gravity crossover and is expected to open preorders this year. The automaker has also expanded sales to Europe and the Middle East.
In early June, Lucid announced additional funding from its majority shareholder, the Saudi Arabia Public Investment Fund, as part of a stock offering. Lucid expects to raise $3 billion in funding.
As Nikola works on its hydrogen-powered truck and related hydrogen infrastructure, it’s also on a quest for more cash.
The company needs capital to pursue its goal of becoming a leader in hydrogen, a potentially game-changing long-haul trucking solution. Nikola CEO Michael Lohscheller said the company expects to deliver up to 150 hydrogen trucks in 2024.
But in early June, Nikola adjourned its shareholder meeting after it did not secure enough votes to execute a proposal that would “ensure Nikola can continue its ongoing operations,” the company said in a press release. A pending new plan, called Proposal 2, would increase the number of shares Nikola can issue, giving it more freedom to raise additional funds. Stockholders will reconvene on July 6 to vote.
The Phoenix company is also facing the prospect of a reverse stock split to maintain Nasdaq’s minimum bid price requirements.
Vietnam’s VinFast is living up to its name by quickly moving into the U.S. market. The young automaker, which just started making gasoline cars in 2019, showed two midsize EV crossovers at the Los Angeles auto show in 2021 and delivered the first model — the VF 8 — to U.S. buyers this year.
To boost sales, VinFast cut prices for the VF 8 and offered a $399 lease deal, partly in response to Tesla’s January price reductions. Early versions of the VF 8 were rated for only about 200 miles of range.
VinFast has now imported about 2,100 VF 8s for sale in California and another 800 for Canada, including a newer version with about 250 miles of range that starts at $47,200 with shipping. The automaker said last month it has 17,000 reservations in the U.S. and Canada for the VF 8 and for the three-row VF 9 crossover, which will start at $84,200, including shipping, when it goes on sale this year, VinFast said.
To fund its global expansion, VinFast announced new financing last month of $2.5 billion from parent company Vingroup and from Vingroup founder Pham Nhat Vuong, Vietnam’s richest person. It is planning to construct a factory in North Carolina, which originally was to open in 2024, but the company has pushed the opening back to 2025.
The Sharonville, Ohio, electric work truck venture, unveiled its W56 step van in March, and plans to start production in the third quarter. The vehicle is a Class 5 and 6 model with a range of up to 150 miles.
Workhorse has also struck a deal for Kingsburg Truck Center in Kingsburg, Calif., to serve as its first certified EV dealer in the state, part of what Workhorse said is “one of the vital early steps in activating our go-to-market efforts.”
As of the end of the first quarter, the company had delivered only 10 of its W4 CCs, a utility vehicle with a 150-mile battery range, because of component delivery issues.
The company said it is still on track to meet 2023 delivery targets.
Workhorse has about seven months of cash on hand to cover the cost of operations, according to the company’s most recent filing.
