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Who Will Survive The EV Startup Wars?

Lucid Air Sapphire 2023 1600 0c (1)

Say, when was the last time you drove a Cord, a Packard, an Auburn or a Nash? If you’re Jason, you’d probably say “two weeks ago,” but for the rest of us, the answer is likely never unless you’re a car collector. In America alone, the automotive landscape is littered with dozens of dead car brands from the past century, or ones that got absorbed into bigger entities that may not have survived themselves.

As we like to say around here, making cars is hard. That fact hasn’t changed even if the car brands of the past used internal combustion and the future might be fully electric. On today’s morning news roundup, we’ll look at the EV startup game as it stands almost midway into 2023; Volvo’s own EV delays; Elon Musk’s decision to step away from the top job at Twitter, sort of; and Mazda’s very high hopes for the CX-90.

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Vidframe Min Bottom

And then it’s the weekend! Let me send you off in style.

The EV Startup Wars Are Like The Auto Industry’s Early Days

Rivian R1t 2022 1600 18
Photo: Rivian

Before Tesla, the last major new U.S. automaker to emerge and survive long-term was Chrysler. That was in 1925. (Granted, it’s still too early to call Tesla’s survival “long-term” but we’re past the “Death Watch” phase of things.) The point is, the car market is a brutal and complicated one, full of challenges around capital, production, regulations, sales, competition and now things like software, batteries and autonomy. It’s hard!

Right now, you have a bunch of new startups in the EV space as well as legacy automakers trying to pivot in that direction while making their manufacturing experience and scale into an asset instead of a liability. Not everyone will survive this moment. The Washington Post likens it to the early 20th century, when cars were brand-new and countless brands fought for market share back when roads were barely a thing. Some of those brands got absorbed into bigger conglomerates like General Motors; others just fizzled out and died.


The Post’s point is that startups often burn cash until they’re profitable; that’s normal in any industry. But the new crop of EV startups are facing a weird economy, a very tight capital market and perhaps even founders who underestimated the costs involved. Here’s a summary of how tough things are:

On Monday, Lucid reported a more than $779 million loss in the first three months of 2023, compared with the more than $81 million loss it reported the same quarter last year. Its cash reserves dropped to $900 million, compared with the more than $1.7 billion reported at the end of 2022. The company also said that it planned to produce more than 10,000 vehicles — on the lower end of its previous guidance.

A day later, Fisker reported a $120 million loss for the first three months of 2023 and said it burned through $84 million in cash. The company cut this year’s production target to between 32,000 and 36,000, down from the 42,400 it previously forecast.

On Tuesday, Rivian reported losses of $1.3 billion for the first three months of this year. It is more liquid than its rivals, ending the quarter with about $11.2 billion in cash and equivalents.

Lordstown Motors, which builds an electric truck, said this month that it would pause production on its vehicles, noting in a filing that it may go bankrupt if it cannot find additional funding. Nikola, an electric truck maker, said it would also pause production after reported widening losses.

Dan Ives, a Wall Street analyst whose EV takes I generally like a lot, seems to be the most optimistic about Rivian so far:

Ives said clear winners will emerge besides Tesla, and despite the stumbles, Rivian and Lucid are still in a position for success. Rivian has the best potential to be a “mini Tesla-like ecosystem,” he said.

“There’s a lot of wood to chop to get there,” Ives added. And Wall Street is “tired of dog-eat-their-homework excuse[s] for missing production.”

I think that’s true, since Rivian is getting into the EV truck market relatively early and they’ve managed to avoid a lot of Muskian drama so far. On the other hand, while Lucid makes one of the objectively best EVs in the world, I feel like it staked everything on making a better Tesla Model S right as the whole world was shifting to SUVs and trucks. I hope it can shift away from its own “Death Watch” moment; every Lucid headline now is about the company’s survival, not the product itself.

Now, you may be thinking “Well, Tesla did it! So can these companies!” Yes and no. Even Musk today will admit Tesla’s success was predicated on a series of fortunate lightning strikes and that it nearly died a bunch of times in the 20 years it’s been around. Tesla’s the exception, not the rule.

Not all of these EV startups will make it, but I think we can safely say there’s a big gap between Rivian and, say, Lordstown.

Musk Finds A Twitter CEO, But Who Would Want That Job?

221026151430 Elon Musk Entering Twitter Hq 1026 Screenshot
Screenshot: CNN

Now, before you get mad, yes, there’s a car angle here. While it’s certainly newsworthy in a general sense how the world’s second-richest man operates an inordinately powerful information platform, we’ve tried hard to resist covering the endless chaos around Musk’s court-ordered purchase of Twitter last year because not all of it is in The Autopian’s lane.


Here’s the thing: Musk is a relentless micromanager. He didn’t appoint someone to figure out Twitter’s future and just report to him directly. No, he got personally deep into the weeds on decisions around just about everything the platform does. He did the same at Tesla too after ousting its original co-founder. This is how he operates, for better or worse.

But like the rest of us, there are only so many hours in his day and he’s not getting any younger. Questions have arisen as to whether Musk’s eye is still on the ball at Tesla, the main source of his wealth, as well as SpaceX and his other companies. Tesla’s investors are actually furious at him—more than they’ve ever been publicly in the past—as the EV race gets more competitive and Tesla’s car lineup continues to age quickly and hinges future success on software updates more than anything else.

So if you’re a Tesla investor or fan, relief may be in sight as Musk announced the appointment of a new Twitter CEO: it may be NBCUniversal executive Linda Yaccarino, multiple outlets report today. Lest you think Musk is just throwing in the towel here, think again:

So Twitter’s getting a new CEO. But Musk is still in charge of product, software, system operations, and technology—and also he owns the company. What kind of CEO role is that? Who the hell would want that job? Musk runs his companies like his own personal fiefdoms; he burned through a bunch of top executives in the 2000s until he made himself Tesla’s CEO. I’m far from convinced this move will free up Musk to “focus on” Tesla at a time when it needs fresh products to maintain its lead in the EV arms race.


And good luck to Yaccarino, if she gets the job. Lord knows she’ll need it.

Volvo Faces EV Delays Of Its Own

Photo: Volvo

It’s far from a given that the legacy automakers will survive this century’s industry shakeups either. We’re seeing those challenges across the board, from labor fights to making EVs profitable at scale. And it’s a major pivot from the stuff they’ve done for about a century. You don’t reverse course on that overnight.

Similar to what we’ve seen with Volkswagen—but hopefully not as severe—Volvo is facing some software-related headaches with its new EX90 crossover. That’s a crucially important car, because it’s Volvo’s first modern entry into the EV era after one hell of a brand comeback in the 2010s. Built electric from the ground up and equipped with Lidar, it’s the future of the company.

Now production is being delayed until next year thanks to software challenges, Bloomberg reports. The same goes for its platform-mate, the Polestar 3:

Output of the EX90 is now expected to begin in the first half of 2024, Volvo said Thursday. The Sweden-based carmaker had previously said the car would start rolling off the line in the fourth quarter of 2023. The shares fell as much as 6.4% following the news.

Demand for the car remains high, according to a statement. Putting on the brakes for further work on the vehicle’s software will help ensure a quality experience for all customers, Volvo said.

Carmakers have had trouble aligning complex development and production schedules for future vehicles decked out with sophisticated digital offerings. Volkswagen AG has delayed key models like the Porsche Macan for at least two years because it couldn’t get the software ready on time. Earlier this week, EV startup Fisker Inc. cut its production forecast for this year as it struggles with software integration.

Here’s hoping Volvo gets it right.


Mazda Scrambles To Get The CX-90 Into Buyers’ Hands

CX-90 Turbo S
Photo: Mazda

No, not EX90. CX-90. The big three-row crossover that Mazda is making. (This is why we need to bring back car names!) It’s not just big, it’s a big deal; it’s the first wave of Mazda’s upmarket push with a new hybrid platform and lots of luxury-ish specs. This, friends, isn’t the beater Protegé you drove in college, it’s the new Mazda. The Japanese automaker is hoping for the same kind of boost the Telluride gave Kia a few years back.

That is, if it can get those cars into customer hands. That’s a problem, according to Automotive News:

A global shipping shortage is causing the Hiroshima-based automaker to scramble to secure enough sea transport to feed soaring demand for Mazda vehicles, especially its crossovers.

Mazda expects wholesale deliveries to jump 13 percent, or by 140,000 units, in the current fiscal year as it launches new nameplates such as the CX-90 and ramps up production.

About half of the projected increase is shipped out of Japan, incoming CEO Masahiro Moro said Friday.

But a combination of factors is putting a pinch on shipping logistics, he said.

During the pandemic, many ship companies decided to replace their fleets with more fuel-efficient vessels, and there is now a shortage of ships as new ones are being built.

Meanwhile, exploding auto exports from China are gobbling up space on available carriers. Last year, China exported about 3 million vehicles; this year exports could rise to 4 million, Moro said as Mazda announced its full fiscal-year financial results.

So basically, if you’re hoping for a CX-90, don’t be shocked if you encounter delays, unfortunately. This is an annoying headache for Mazda, which unlike the other Japanese automakers has a minimal production footprint outside of Japan so it’s wholly dependent on exports. It has a joint venture with Toyota in Alabama to make the CX-50 but production there has been incredibly slow thus far.

The good news, as that story notes, is that Mazda has some nice momentum right now. Profits were up 36% in 2022 compared to the previous year and the new CX-60 is selling well in Europe. Hopefully Mazda can execute on this pivot.

I drove the CX-90 PHEV recently. Let me know if you’re interested in a review there.


Your Turn

Which EV startup has what it takes? Who dies, and who gets absorbed by someone else?

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Manwich Sandwich
Manwich Sandwich
1 year ago

“Musk Finds A Twitter CEO, But Who Would Want That Job?”
I’m sure the compensation package is good enough that MANY people would want that job (including myself).

Which EV startup has what it takes?”

Tesla obviously… and Rivian. Maybe also Lucid. Probably Vinfast due to government backing

“Who dies,”

Lordstown motors. Faraday Future, Fisker, Aptera, Sono, Atlis Motor Vehicle, Canoo (sadly)

“and who gets absorbed by someone else?”

Lightyear, Proterra, Nio, Byton

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