The brakes have been slammed on the world of EVs — and once-red-hot startups are taking the shift the hardest, with shares in companies like Rivian and Lucid down more than 90% from their previous peaks.
Lost spark
Mercedes-Benz announced a 5-year delay in its electrification goals last week, Ford saw a double-digit drop in EV sales for January, Toyota is keeping its focus on its hybrid lineup, and, as of yesterday, Apple is giving up entirely on its not-so-secret car project.
Although EV sales are still growing, up 31% last year, the pace of change appears to have slowed as we potentially enter what’s known as “the chasm” in the adoption curve of any new technology — when a product struggles to cross over from the early adopters to the mainstream.
The EV slowdown isn’t disastrous for legacy automakers, but if you’re a cash-guzzling EV startup that needs new capital and investors to reach scale, it’s a major roadblock. Rivian has announced no plans for production growth this year and is reducing its workforce by 10%; Lucid has cut prices for its luxury EVs 3 times in 7 months and is now expecting to build only 9,000 cars this year; while Volvo has withdrawn its financing of Polestar, leaving Chinese parent company Geely to support the struggling EV maker.
With some combination of range anxiety, cost (the average EV will still set you back over $55k despite price cuts), and ongoing concerns over the state of charging infrastructure all playing on consumers' minds, the EV industry looks set for a slower year.
