The EV business seems to be in consolidation. Which ones will survive?
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The ones that have backers with deep pockets will survive … as long as those deep pocketed folks are willing to provide capital. Lucid, for example, might survive if the Saudi PIF is willing to keep funding them. Rivian, with about $7B or so, has enough cash to fund itself for a year and a half, and then it will need to raise more money. It did a 1.5B convertible last year, but that didn’t go down very easily. They may have to find a large backer at that point. Polestar may end up a Geely company (as stated in the article) and China will continue to fund it as an entree into Europe and the USA markets. Ford and GM will slow their funding of EV for a year or two because ICE provides substantial profits and financially it doesn’t make sense to cannibalize your own profitable products with your own unprofitable products. Hyundai and Kia are “all in” on EV and will likely see good growth. They also reportedly have good products. And the European automakers (Mercedes, BMW, VW) are moving along as well, getting ready for laws in many of their major market countries that will require them to sell only, or mostly, EVs. VW is the leader among European EV manufacturers. Stellantis appears to only be serious in the EV segment in Europe and appear to be mostly disregarding the US market for now. Nissan has 2 main models on offer, but their technology is substandard (they basically slapped an EV into an ICE car rather than design one from scratch), especially their battery management systems. Toyota and Honda are much more deliberate in their product planning, and while they have minimal EV presence for now, once they see a path to consistent profitability in the EV market, they will go full out and compete very strongly. Vinfast for now makes a very substandard product, but I have been told that they are backed by a Vietnamese company with lots and lots of capital available. So if they make it past the point at which they make compelling and competitive vehicles, they might make it. But it’ll take ten billion or more. At least they quickly eliminated their gimmick of “renting the battery”.
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Minor point of clarification. Volvo has stopped funding Polestar, but Geely, the parent company of both Volvo (Geely owns about 80% of Volvo) and Polestar continues to fund Polestar.
So, it is a weird bit of switching the payments from the left hand to the right hand. No consolidation resulting but it does kick the burden up a level to be solely Geely and not on their subsidiary Volvo.
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Thanks. To me this implies that Geely may decide what to do with Polestar separately from Volvo. That maybe implies more capital available for Polestar but also possible sale or merger with another entity as the EV business consolidates to cut overhead expenses. And maybe make better use of installed manufacturing capacity.