Why some EV startups are bracing for a shake-up

Why some EV startups are bracing for a shake-up It's been a rough stretch for electric-vehicle startups lately, marked by manufacturing blunders, swooning stocks and regulatory investigations. That's ratcheting up the tension as smaller players scale up production and compete for the kind of mainstream success enjoyed by Tesla. "Not every startup will survive the shake-up that will occur in the nascent commercial EV sector," Rick Dauch, CEO of electric-van maker Workhorse Group, said last week on a conference call with analysts. The words were echoed by Lordstown Motors Corp. CEO Dan Ninivaggi, who said most smaller manufacturers will succumb to bigger players. Both of the companies have market values below $1 billion. The candid comments underscore the challenging environment for EV startups these days. In the last few weeks alone, EV makers cut production targets, warned of the need to raise capital, killed a vehicle model or upset customers with price hikes. The EV market has drawn new entrants in recent years, with a number of firms going public through reverse mergers with blank-check companies. As startups have run into trouble — in some cases facing scrutiny by federal authorities — many have fallen below their debut prices. That's not to suggest that the entire EV space is ailing. Indeed, Tesla ranks among the most valuable companies in the world, while Ford Motor Co. recently announced a sweeping reorganization to capitalize on the growth potential of plug-in models. Even as some smaller firms stumble, many startup leaders insist their companies will come out fine on the other side, pointing to their distinct offerings. Take Lucid Group, the maker of luxury EVs that has a market capitalization of $37 billion despite only recently beginning deliveries. As CEO Peter Rawlinson put it on a conference call, "We don't see ourselves competing directly with any particular car companies." – Sean O'Kane, Bloomberg What you need to knowEPA reinstates Calif.'s authority to set vehicle emissions rules, ZEV mandates The nation's largest auto market and the world's fifth-largest economy has regained the authority to set its own auto tailpipe rules and zero-emission vehicle mandates that are more stringent than federal standards. The EPA on Wednesday reissued a waiver under the Clean Air Act allowing California to pursue its own tailpipe greenhouse gas emission standards and ZEV mandates and reversing a Trump-era rule that sought to block states from doing so.

Why some EV startups are bracing for a shake-up

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