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 know

EPA 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.

Intel's Mobileye confidentially files for IPO in U.S. Intel Corp. said Monday its Mobileye autonomous vehicle technology unit has confidentially filed paperwork for an initial public offering in the U.S., which could value it at more than $50 billion. Intel did not give more details about the offering but has previously said it would receive the majority of the proceeds from the share sale. Some of those funds will be used to build more Intel chip plants, CEO Pat Gelsinger said in December. The chip giant will also retain a majority stake in the unit after the IPO, it has said previously.

Roundup

Russian autonomous-driving company Yandex paused operation of robotaxis in Ann Arbor, Mich., and ended a delivery partnership with Grubhub amid Russia's invasion of Ukraine.

Chevy teased the 2024 Blazer EV SS, its first performance electric vehicle, on Wednesday in a video.

Electric Last Mile Solutions Inc. said it will lay off 50 employees, about 24 percent of total head count, as the fallout from the sudden resignation of its leadership continues.

ELMS cushions fall of forced-out leaders as it slashes head count.

In a letter to two U.S. senators, Tesla defended the safety benefits of its Autopilot advanced driver-assistance system and its Full Self-Driving capability but acknowledged they require "constant monitoring and attention of the driver."

Ford says so long to scooter division Spin amid renewed focus on EVs.

PG&E Corp. and General Motors want to see if EVs can be a source of backup power for homes in Northern California.

Shyft Group will launch Blue Arc EV Solutions, a division that will sell its electric chassis and Class 3 electric delivery van.

Pony.ai agreed to issue a recall for some versions of its autonomous driving system software after an October crash in California, U.S. regulators said.

Self-driving trucking company TuSimple Holdings Inc. said it was replacing its CEO in a decision it called part of a "planned executive succession," but which took Wall Street by surprise.

Brain food

"In many ways, Lincoln's pivot to electric vehicles will be the most important — and riskiest — move the brand has attempted in its century under Ford ownership," Automotive News engineering reporter Richard Truett writes in a blog.

Last mile

A Berkeley, Calif.-based startup called Important believes it can help both human-driven and self-driving cars better protect pedestrians.