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Electric Vehicle Startups Are About To Disrupt the Auto Industry
After decades of stability in the automotive world, startups finally have a chance to compete
Since the introduction of mass-market vehicles in the early 20th century, the automotive industry has been remarkably stable. The largest automakers from 80 years ago are still mostly among the largest today. Breaking into this industry was difficult, very few succeeded.
The rise of electric vehicles — and the slow adoption from many established automakers — has presented a narrow window for new entrants. Tesla, which was struggling to put out their first mass-produced vehicle just a decade ago, has already become the most valuable automaker in the world.
This enormous success has inspired dozens of copycat startups hoping to follow in their footprints. Together, they’ve brought in tens of billions in funding. The basic strategy is almost always the same: begin with a high-priced luxury vehicle that will sell in small numbers, then expand to cheaper mass-market vehicles afterwards.
This is no easy task — bringing any vehicle to market requires a truly enormous amount of capital. Indeed, a few of the startups have already went down in flames while others are on life support, hoping to secure just enough funding to get the first vehicles out the door. However, a minority — flush with cash and industry expertise — look well-positioned to break into the market.
Time is quickly running out — large automakers are now beginning to turn their attention towards electrification. A few have even pledged to go all-electric. If the startups aren’t able to gain a foothold soon, the window of opportunity may close for good.
A Long Shot
The Mitsubishi manufacturing plant in Normal, Illinois closed its doors in May of 2016. With 2.6 million square feet, the facility produced 240,000 vehicles annually and employed 3,000 people at its peak. Just a few months later, the plant was purchased by a little-known startup named Rivian Automotive.
Founded by RJ Scaringe, who holds a PhD in mechanical engineering from MIT, the company originally intended to produce ultra-efficient gas vehicles. However…
