Former Ford CEO Mark Fields said the transition to electric vehicles will take longer than expected, hurting EV startups. Drew Angerer/Getty Images
It's been a bad year so far for electric vehicle startups. It could get worse.
The problem is not that EV sales are not growing. Despite the slowdown, they are. That means it's not growing as fast as automakers expected.
“It's not the pace that all automakers were hoping for,” former Ford CEO Mark Fields told CNBC. cry on the street on friday. That's why we're seeing lower prices, more inventory and more incentives from EV manufacturers, he added.
He noted that early adopters of EVs have different purchasing criteria than the average buyer, such as innovation and environmental impact. But many of them have already purchased cars, and EV manufacturers will now have to win over everyday consumers who value cost and convenience. In addition to repair costs and resale value, charging time and inadequate charging infrastructure are major issues for them.
“Consumers in the mainstream market will say, 'Once we know all that, we'll seriously consider it,'” Fields said. “But until then, we either continue with internal combustion engines, or we go with hybrids, which, as you can see, is a very good solution for consumers at the moment.”
Sales of hybrid cars are surging, a big boon for Toyota, which pioneered the technology and has long warned that the transition to electric vehicles would take longer than many thought. . Ford has also seen a surge in hybrid vehicle sales and plans to offer more similar vehicles, even as it slows down its EV plans after lower-than-expected sales.
However, Fields has no doubts about the transition to EVs.
“The transition will definitely happen, but it will take time,” he said. And that means difficulties for EV manufacturers that have launched in recent years in hopes of accelerating EV adoption, he added.
“A journey this long is going to put many businesses into severe financial hardship, and we're seeing that happening right now,” he said.
EV startups struggling
On Wednesday, wall street journal Tesla challenger Fisker has hired a restructuring advisor to help with a potential bankruptcy filing, the company reported. The next day, the EV maker's stock price fell by about 50%. Shares rebounded somewhat on Friday after Fisker said it was focused on partnering with major automakers “often” working with outside advisors, but earlier this month Reuters reported that major automakers The manufacturer may be Nissan Motors.
However, Fisker's market cap is $97 million, down from $4.1 billion in 2021. The company is at risk of being delisted from the New York Stock Exchange, cut jobs last month and warned it may not be able to continue as a going concern.
Meanwhile, Amazon-backed Rivian recently announced it was delaying plans for a factory in Georgia to save billions of dollars, saying it doesn't have enough cash to launch its next model, the R2. This allayed concerns that this might be the case.
This comes after Tesla CEO Elon Musk suggested last month that Rivian, which just announced layoffs, was only about six quarters away from bankruptcy. “They need to cut costs significantly and the executive team needs to continue living in the factory or they will die,” he posted on X.
Rivian's market capitalization has plummeted from a peak of $153 billion in 2021 to $10.8 billion today.
As for Saudi-backed Lucid, its market capitalization has plummeted from a peak of $91.4 billion in 2001 to $6.2 billion today. The company announced last month that it would only produce about 9,000 EVs this year, a far cry from the 90,000 it expected to produce in 2024 just three years ago.
