NUNETON, UK – Some ads tram Startups are burning cash fast, racing to bring trucks or truck marketing before they run out of money or customers choose to buy from used car manufacturers like Ford or Synthetic engine .
Driven by investors’ desire to create TeslaA series of commercial electric vehicle manufacturers on both sides of the Atlantic have gone public through a reverse merger with special purpose acquisition companies (SPACs), raising hundreds of millions of dollars. as they seek to compete By Elon Musk successful. These include Arrival Inc, Canoo Inc, Lordstown Motors Corp, Electric Last Mile Solutions Inc (ELMS) and REE Automotive Holding Inc.
But investors have grown bored with EV startups and their ability to compete with legacy automakers, leaving their shares at a fraction of their peak price. This has increased pressure to produce vehicles that work fast if they are to raise new capital in an industry where launching a single vehicle can cost $1 billion.
Daniel Barel, chief executive officer of Israeli electric chassis manufacturer REE Automotive, which has been testing the vehicle with customers near Detroit and will unveil the UK prototype van this week, said: At this stage, it is paramount to get the car to the customer. “Only then can they make a real buying decision.”
REE’s chassis uses “corners” or electric motors at independent wheels, with brake and the steering wheel is located in all or some wheels. This eliminates the need for a traditional axle or drivetrain, freeing up more space inside the truck.
To reach the market faster, REE tapped old suppliers like American Axle for electric motors and Italian Brembo brakes. Companies like EAVX and Morgan Olson, unit of Commercial vehicle Body manufacturer JB Poindexter & Co, will supply the standard bodywork for US REE trucks.
“We wanted to stay true to what we were saying and let others bring their expertise in for the rest,” said Peter Dow, vice president of engineering at REE’s engineering center in Nuneaton, UK. .
The clock is ticking.
Shares of REE are nearly 90% below their July 2021 debut. The company had $239 million in cash at the end of March and plans to invest up to $120 million by 2022. to scale up production by 2023.
“We’re on the right track, we’re on the budget, we have everything it takes to bring it to market,” CEO Barel said while demonstrating a test car near Detroit, adding that REE has enough cash to last beyond 2023.
However, others have struggled.
ELMS filed for bankruptcy liquidation in June, citing insufficient funding, while Lordstown had to sell assets to Taiwanese contract manufacturer Foxconn.
In May, Canoo disclosed “substantial doubt” about its ability to continue operating as a regular concern, but recently received a boost when Walmart placed an order for 4,500 vehicles.
Earning more cash can be difficult.
“The current market is not an ideal market to raise capital,” said Dakota Semler, CEO of Los Angeles-based Xos Inc. electric truck operates on US routes for customers including Amazon.com Inc delivery contractors.
Xos had $132.7 million in cash at the end of March and could raise an additional $125 million through a share purchase with a unit of US investment firm Yorkville Advisors.
‘TOUGH AT THE MOMENT’
Heritage Automakers are turning up the heat.
FedEx Corp has 150 BrightDrop electric trucks that deliver deliveries throughout Los Angeles. “It feels like you’re in the future now,” FedEx driver Nelson Granados, 28, told Reuters as he made deliveries during a trip in his BrightDrop EV. FedEx has ordered 2,500 BrightDrop trucks, fueled by a combination of the 18-month-old company’s technology and GM’s FedEx’s director of sustainability, Mitch Jackson, told Reuters Potential newcomers took note.
British EV startup Bedeo makes electric powertrains for trucks for Stellantis and said earlier this year it was talking to investors about building its own trucks.
Despite its track record – Bedeo-powered cars have driven more than 50 million kilometers (31 million miles) – executives say investors are now wary of competing with rivals. Ford’s electric Transit van.
Andrew Whitehead, CEO of Bedeo unit, Protean Electric, said: “Large-scale capital raising is very difficult at the moment.
Bedeo CEO Osman Boyner says the company will instead begin the transformation diesel engine truck by the end of the year using Protean on-wheel electric motors so they can run in electric mode in cities with low emission zones and diesel oil on longer journeys.
Bedeo is also talking to legacy automakers about producing small, specialized production lines for 5,000 or more trucks for them.
“The big automakers don’t want to do it in-house,” Boyner said. “Those numbers are too small for them, but big numbers for companies like us.”
‘MOST FAVORITE TERMS’
EV startups are cutting back.
Rivian Earlier this year said its $16 billion in cash as of the end of March was enough to finance a second $5 billion US factory, slated to open in 2025, but by the end of the month. 7, it announced it would cut 6% of its workforce to reduce costs.
Amazon has ordered 100,000 trucks from Rivian, whose stock is down more than 80% from its peak shortly after its initial release in November 2021.
British electric bus and truck maker Arrival also plans to cut costs.
Arrival had $500 million in cash in mid-July, down nearly 45 percent from about $905 million at the end of 2021. Its stock is nearly 93% lower than its March 2021 debut.
Chief Financial Officer John Wozniak said in a statement that the restructuring will fund Arrival’s operations through the end of 2023.
The startup has begun a phased trial with United Parcel Service Inc, which has ordered up to 10,000 Arrival trucks.
“We believe we will continue to access funding from a number of different sources,” Wozniak said. “However, the terms may be less favorable and the amount and timing remain uncertain, which is why the company announced the measures it is taking to preserve cash.”
Startups that avoided listing shares through SPAC mergers are now waiting for the market to improve.
In February, Stockholm-based Volta Trucks raised funds 230 million euros ($235 million) in funding to ramp up production of electric trucks.
Spokesman Duncan Forrester said Volta already has a prototype truck in customer hands and is on track for mass production in early 2023. It has orders for more than 6,500 trucks worth around €1.4 billion.
By the end of 2023, Volta will be looking to raise funds, either through new fundraising or an initial public offering.
“From an investor perspective, that’s going to be a different conversation because we’ll be able to demonstrate a track record of bringing the car to market,” Forrester said.
(1 dollar = 0.9770 euros)
(Reporting by Nick Carey in Nuneaton, England, Lisa Baertlein in Los Angeles and Ben Klayman in Detroit; Editing by Matthew Lewis)