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It\u2019s been a bad year so far for startups offering electric vehicles. It could get a lot worse.<\/p>\n
The problem is not that EV sales aren\u2019t growing. They are<\/a>, despite a slowdown. It\u2019s that they\u2019re not growing as quickly as carmakers had anticipated.<\/p>\n \u201cThe pace that all the automakers were expecting is not there,\u201d former Ford CEO Mark Fields told<\/a> CNBC\u2019s Squawk on the Street<\/em> on Friday. That, he added, is why we\u2019re seeing price cuts, rising inventories, and increased incentives from EV makers.<\/p>\n Early EV adopters, he noted, have different purchase criteria\u2014such as innovation and environmental impact\u2014than average buyers. But many of them have already purchased their vehicles, and now EV makers must win over everyday consumers more focused on cost and convenience. For them, charging time and inadequate charging infrastructure loom large, in addition to repair costs and resale value.<\/p>\n \u201cThe consumer in the mainstream market is going to say, you know what, when you figure all that stuff out, then I\u2019ll really consider this,\u201d said Fields. \u201cBut until then, I\u2019ll either stick with my internal combustion engine, or alternatively, as you\u2019re seeing, with hybrids, a really great solution for consumers right now.\u201d\u00a0<\/p>\n Sales of hybrid vehicles are soaring, much to the benefit of Toyota<\/a>, which pioneered the technology and has long warned<\/a> that the EV transition will take longer than many believed. Ford has also enjoyed surging hybrid sales and plans to offer more such vehicles, even as it decelerates its EV plans given weaker-than-expected sales.<\/p>\n But Fields harbors no doubts about the transition to EVs.<\/p>\n \u201cThe transition will absolutely happen, but it\u2019s going to take longer,\u201d he said. And that, he added, spells difficulty for EV makers launched in recent years with the expectation of faster EV adoption.<\/p>\n \u201cWith this longer path, a number of them are going to get into real financial trouble, and you\u2019re seeing that play out right now,\u201d he said.\u00a0<\/p>\n On Wednesday, the Wall Street Journal<\/em> reported<\/a> that Tesla<\/a> challenger Fisker had hired restructuring advisors to help with a possible bankruptcy filing. The EV maker\u2019s shares fell by roughly 50% the next day. They recovered somewhat<\/a> on Friday, after Fisker said it \u201coften\u201d works with outside advisors and that it was focused on trying to partner with a large automaker, which Reuters reported<\/a> earlier this month might be Nissan<\/a>.<\/p>\n But Fisker\u2019s market cap stands at $97 million, down from $4.1 billion in 2021<\/a>. It risks being delisted from the New York Stock Exchange, and last month it cut jobs and warned<\/a> it might unable to continue as a going concern.<\/p>\n Meanwhile, Amazon-backed Rivian recently announced that it will delay factory plans in Georgia in order to save billions of dollars, helping to ease worries that it lacked sufficient funding to see it through the launch of its next model<\/a>, the R2.\u00a0<\/p>\n That followed Tesla CEO Elon Musk suggesting last month<\/a> that Rivian, which had just announced layoffs, had only six quarters or so until bankruptcy. \u201cThey need to cut costs massively, and the exec team needs to live in the factory or they will die,\u201d he posted on X<\/a>.<\/p>\n Rivian\u2019s market cap has plunged from a 2021 peak of<\/a> $153 billion to $10.8 billion today. \u00a0<\/p>\n As for Saudi-backed<\/a> Lucid, its market cap has plummeted from a peak of<\/a> $91.4 billion in 2001 to a $6.2 billion today. Last month, it said it would build only about<\/a> 9,000 EVs this year\u2014a far cry from the 90,000 it predicted for 2024 just three years ago.\u00a0<\/p>\n<\/div>\nStruggling EV startups\u00a0<\/h2>\n
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