A few younger players in the electric-vehicle space have faced some setbacks lately.
But experts say the recent developments are unlikely to become a resounding trend throughout the EV movement: The less-established contenders are simply realizing the barriers to entry in the electric space.
In the last two weeks:
- The founder of electric vehicle startup Faraday Future, Chinese entrepreneur Jia Yueting, filed for bankruptcy after a rocky few years financially.
- Harley-Davidson Motor Co. halted production of its LiveWire electric motorcycle due to a "nonstandard condition" the company discovered with the bike.
- Dyson, the vacuum cleaning giant owned by British entrepreneur and inventor James Dyson, ended its EV ambitions after being unable to make the project "commercially viable," the company said.
"There are a lot of startups out there looking at the apparent success of Tesla, and they want to be the next Tesla, and they don't realize it's a multibillion-dollar investment," Michael Harley, executive editor of Kelley Blue Book, told Automotive News.
After all, few companies have received the extensive buy-in from investors that Tesla has. And while Rivian landed a 100,000-vehicle Amazon deal last month, other companies trying to gain a foothold in electric vehicles simply don't have the capital or talent to do the same.
"A lot of the startup companies in the mobility space … are realizing that it's really difficult to develop these technologies, and it's very, very difficult to build cars," Brandon Mason, PwC's automotive director and mobility leader, told Automotive News.
"There are a whole lot of hurdles that have to be cleared. The companies that are doing that at scale today are there because they are doing a very good job at clearing those hurdles," he said.
"You're still not making money on electric vehicles, but the larger companies have that investment and are playing the long game. "
Nonetheless, Mason said he expects new players to continue trying to enter the space "simply because of the size of the opportunity."
At Faraday Future, changes in leadership have come as the company begins production of the ultraluxury FF 91 electric vehicle and final development of the FF 81 mass-market EV.
A month before his Oct. 14 bankruptcy filing, Yueting stepped down as CEO in a restructuring and was replaced by former BMW executive Carsten Breitfeld.
In a statement, the long cash-strapped company said a "creditor trust for the benefit of Yueting's creditors" was to be established, but that it would not impact Faraday's normal business operations. The plan is also designed to help Faraday prepare for an IPO, according to the statement.
Yueting's personal struggles are not the only financial issues the company has had since launching in 2014. The company was involved in a legal dispute over funding with its main investor, which stalled efforts to produce the FF 91.
For Harley-Davidson, the LiveWire motorcycle was an attempt to attract a new generation of riders with a line of electric products. The motorcycle and some not-yet-introduced e-bicycles demonstrate the company's "commitment to a full lineup of electric two-wheelers," according to the company's website.
The LiveWire motorcycles, priced at nearly $30,000, had just been delivered to authorized dealers when the condition was discovered during a final quality check. The company says it is doing additional testing and analysis, "which is progressing well."
It did not specify the nature of the condition to Automotive News but said customers can continue to ride the motorcycles.
Dyson said there were no product failures that contributed to its decision to drop work on EVs. Dyson originally planned to bring three electric vehicles to market, with the first model due by 2021.