In a CNBC article, Navigant Research discusses what is causing many once promising startups to fail
Since the start of the decade, many electric vehicle (EV) startups have tried and failed to create a sustainable electric car.
In a CNBC article, Navigant Research’s Sam Abuelsamid, principal research analyst, explained why he believes several companies have not been able to succeed with their EVs.
Each startup has run into unique issues, but Abuelsamid sees underestimating financial needs as a common thread running through many of these EV company failures.
The startups, on the whole, have “found out building a car is a lot more complicated than they thought, even if an EV powertrain is simpler than a gas powertrain,” Abuelsamid said. “Trying to scale up to manufacture a complex machine is very difficult as the upstarts have become aware of.”
He noted that even Tesla – the only EV startup that has been able to strongly establish itself in the U.S. market – has had to repeatedly raise funds while not consistently showing profitable quarters.
“The EV market has not developed at the pace a lot of people thought in 2009 and 2010,” said Abeulsamid. “It has taken a lot longer for EV adoption to pick up and that means a smaller market for these companies to grab.”