Electric vehicle startups try to keep the spark alive during coronavirus uncertainty
At least a dozen electric vehicle startups with dreams of becoming the next Tesla are suddenly in limbo, hoping they can hang on through the coronavirus pandemic for a chance to deliver on their long-shot ambitions.
The big picture: Building a car company from scratch is extraordinarily difficult, requiring billions of dollars in capital. Tesla made it, but not without a few harrowing brushes with death. Add the economic uncertainty of a global pandemic, and the stunning collapse in oil prices, and the odds of success are even lower.
History is littered with the failures of automobile impresarios like Preston Tucker, John DeLorean and Malcolm Bricklin.
- Elon Musk's breakthrough success at Tesla shows it can be done, inspiring a new crop of innovators, each with their own change-the-world gambit.
What's happening: Some new players are focused on electric trucks or commercial vehicles like Rivian, Nikola, Bollinger, Lordstown Motors, Workhorse and Arrival.
- Lucid Motors, Byton, Faraday Future, Karma, NIO and Czinger are targeting high-end buyers with plug-in luxury cars.
- Also in the game: Canoo and Arcimoto, whose personal use EVs will be available by subscription or rental.
- Most had plans to launch this year, or next, with money provided by traditional venture capital, or rich backers in China and the Middle East.
Then the pandemic hit, changing everything.
- The cancellation of the world's biggest auto shows in Geneva, New York and Detroit dashed some companies' plans for splashy unveilings that would have brought lots of media attention.
- Virtual events and social media lack the same magic, making it that much harder to get noticed and build brand recognition online.
Stay-at-home orders and social distancing requirements have created their own set of problems, forcing engineering teams to scatter, and slowing factory construction.
- The Treasury's Paycheck Protection Program has provided short-term relief to some, while others have been forced to furlough employees.
- Many companies have said their EVs will be delayed until 2021 or beyond.
- Flashback: A $465 million taxpayer loan from the U.S. Energy Department under the Obama administration helped Tesla survive the Great Recession in 2009.
What to watch: Those that are well-funded could squeak by, but the outlook for electric vehicles is hazier in this pandemic economy.