Shulou(Shulou.com)11/24 Report--

According to news on Sept. 8, electric car startups experienced a surge in 2021, with investors betting on which company could be the next Tesla, and electric car start-ups large and small flourished. This year, these companies face high operating costs and fierce competition, which is more like a chain collision on the track.

Start-ups that raised billions of dollars during the boom are grappling with supply chain problems and soaring commodity prices. Investors have realized that car manufacturing is a capital-intensive industry and companies burn large amounts of cash before mass production and profitability.

Instead of focusing on business growth at all costs, these electric car startups retain more cash by cutting spending. For investors, this is like the kind of struggle Tesla faced when he launched his first Volkswagen model. But the point is that times have changed.

When Tesla unveiled the Model 3 electric car, Elon Musk, the company's chief executive, wrote on social media Twitter that his company was "about a month away from bankruptcy". But now Tesla has become the most valuable carmaker in the world.

With a huge first-mover advantage, Tesla can not only survive, but also flourish. Model 3 and the subsequent Model Y electric SUV firmly dominate the US electric vehicle market, according to market research firm Motor Intelligence. Despite continued competition from other automakers, sales of the Model 3 and Model Y accounted for 60 per cent of the US electric car market in the first eight months of this year.

Many carmakers did not sell very much pure electric vehicles in 2020 and 2021. Tesla's high sales of electric vehicles can also sell more than $3 billion worth of carbon credits to these companies.

By contrast, today's highly valued pure electric car startups launch their first product in a completely different environment, hoping to gain a foothold in a more competitive market environment for traditional carmakers.

"Tesla's theory of growing up is that traditional carmakers will never get the relevant market, and the faucet of capital has been open to them for a long time," said Charles Mann, a senior analyst at investment firm Columbia Threadneedle Investments.

"that theory relies on the disregard of traditional carmakers, but that's not the case anymore," he said. "

Rivian's R1T electric pickup was the first electric pickup on the market when it went on sale last September.

Last November, the company went public in the United States, raising $12 billion, making it the largest IPO in the U.S. market since 2014. Rivian shares have fallen 68 per cent so far this year.

Irvine, Calif.-based Rivian said it produced about 7000 cars in the first half of this year, halving its full-year production target. Even so, Rivian will need to more than double its production rate in the second half of the year if it is to produce 25000 cars in 2022. Citing supply chain problems and unexpected soaring commodity prices, the company raised its loss forecast for 2022 to $5.5 billion and cut 6 per cent of its jobs in July.

RJ RJ Scaringe, chief executive of Rivian, said in an internal letter announcing the job cuts: "We have always focused on growth, but Rivian has not been able to extricate itself from the impact of the current economic environment." The company is expected to achieve its production target of 25000 vehicles, a company spokesman said.

Competition from traditional carmakers is also becoming increasingly fierce. Ford's Fmur150 pickup is the best-selling model in the U. S. market for decades, and the company began selling an electric version of the Fmure 150 pickup this spring. It is reported that as of August this year, Ford has sold nearly 7000 electric Fmuri 150 pickup trucks. GM will also launch a popular electric version of Solod heavy pickup next year.

Lucid, an electric car start-up, also went public last year, raising $4.4 billion, making it the largest deal to raise money in 2021 through a special-purpose acquisition of a listed company. Shares of the Newark, Calif.-based luxury electric carmaker have fallen 62% this year.

Like Rivian, Lucid has slashed its 2022 target. Last month, Lucid said it expected to produce between 6000 and 7000 high-end electric luxury cars in 2022, below the initial production target of 20, 000.

Lucid faces the same supply chain problem. There are problems with the production of Lucid Air electric cars, with sales of only 1000 cars in the first half of this year. By contrast, Mercedes-Benz sold more than 4000 EQS luxury electric cars in the United States alone in the same period.

Polaris shares have also fallen 48 per cent since it went public in June. The company said last week that it was on track to achieve its goal of selling 50, 000 electric vehicles this year.

For now, these startups still have enough cash to survive.

Rivian reported that as of the second quarter, the company had about $15.5 billion in cash and cash equivalents. Lucid reported at the end of June that it had $4.6 billion in cash on hand and that last week's application for a "hybrid shelf offering" planned to raise $8 billion in phases over the next three years.

But without Tesla's early market dominance and Tesla's potential to earn billions of dollars by selling carbon credits, these electric car companies may never be able to meet the valuations investors hoped for last year.

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