Former Ford CEO cautions about potential financial challenges facing EV startups due to slower-than-expected adoption

Former Ford CEO cautions about potential financial challenges facing EV startups due to slower-than-expected adoption

It’s been a bad year so far for startups offering electric vehicles. It could be much worse.

The problem isn’t that electric vehicle sales aren’t increasing. They are, despite a slowdown. That’s because they’re not growing as fast as automakers expected.

“The pace that all the automakers expected is not there,” said Mark Fields, former Ford CEO. said CNBC Screamed in the street Friday. That’s why, he added, we’re seeing price drops, increased inventory and increased incentives from electric vehicle manufacturers.

Early adopters of electric vehicles, he noted, have different purchasing criteria than the average buyer, such as innovation and environmental impact. But many of them have already purchased their vehicles, and electric vehicle makers must now appeal to ordinary consumers who are more cost- and convenience-conscious. For them, charging time and inadequate charging infrastructure weigh heavily, in addition to repair costs and resale value.

“The mainstream market consumer is going to say, you know what, when you figure all this out, then I’ll really think about it,” Fields said. “But until then, I’ll either stick to my internal combustion engine or, as you see, hybrids, a very good solution for consumers at the moment.”

Sales of hybrid vehicles are exploding, much to the chagrin Toyota advantagepioneer of technology and long warned that the transition to electric vehicles will take longer than many thought. Ford has also benefited from a surge in hybrid sales and plans to offer more such vehicles, although it is slowing its electric vehicle plans given weaker-than-expected sales.

But Fields has no doubts about the transition to electric vehicles.

“The transition will definitely happen, but it will take longer,” he said. And that, he added, poses difficulties for electric vehicle manufacturers launched in recent years in anticipation of faster adoption of electric vehicles.

“With this longer path, a number of them are going to find themselves in real financial difficulties, and you’re seeing that happening right now,” he said.

Struggling electric vehicle startups

Wednesday, the Wall Street Journal reported that You’re here challenger Fisker had hired restructuring advisors to help with a possible bankruptcy filing. Shares of the electric vehicle maker fell about 50% the next day. They somewhat recovered on Friday, after Fisker said he “often” worked with outside advisers and was focused on trying to partner with a major automaker, which Reuters reported earlier this month could be Nissan.

But Fisker’s market cap stands at $97 million, down from $4.1 billion in 2021. It faces delisting from the New York Stock Exchange, and last month it cut jobs and warned he may not be able to continue his activities.

Meanwhile, Amazon-backed Rivian recently announced it would delay factory plans in Georgia in order to save billions of dollars, helping to allay concerns that it lacks sufficient funding to get through crisis. launch of its next modelthe R2.

This followed Tesla CEO Elon Musk. suggesting last month that Rivian, which had just announced layoffs, had only about six quarters left until bankruptcy. “They need to massively cut costs, and the management team needs to live in the factory or they will die,” he posted on X.

Rivian’s market cap plunged compared to 2021 summit of $153 billion to $10.8 billion today.

As for Supported by Saudi Arabia Lucid, its market capitalization fell by a peak of $91.4 billion in 2001 to $6.2 billion today. Last month he said he would build only about 9,000 electric vehicles this year, a far cry from the 90,000 planned for 2024 just three years ago.

This story was originally featured on Fortune.com

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