(Photo: Robert K. Yosay, Special to the Detroit News)<\/span><\/p>\n<\/div><\/aside>\n<\/div>\nMost of the establishment industry’s assembly plants are idled; line workers are mostly sitting at home as their salaried counterparts continue to work\u00a0remotely;\u00a0and hundreds of dealerships have been severely impacted. J.D. Power estimates sales might\u00a0be off 80%\u00a0in April.<\/p>\n
\u201cIt\u2019s going to be tough for established companies to survive this,\u201d said Navigant Research auto analyst Sam Abuelsamid. \u201cFor any startup that is still going to be relying on raising\u00a0more capital, this is going to be an extraordinarily difficult environment to do that.”<\/p>\n
Business models vary widely. Lucid, Faraday Motors\u00a0and Fisker\u00a0are focused, like Tesla, on retail\u00a0sales with luxury, battery-powered\u00a0products. As affluent buyers see their investment accounts swoon, they might\u00a0put off disposable income purchases. Truckmakers like Rivian, Bollinger, and Lordstown, on the other hand, can bank commercial orders in addition to\u00a0retail sales. Those fleet\u00a0customers could put them in\u00a0a more secure position.<\/p>\n
\u201cFleets are much steadier, and if one thing has been proven during this [it\u2019s] we still need fleets to do their jobs,\u201d\u00a0Lordstown’s\u00a0Burns said in an interview. The Midwest has attracted three high-profile startups:\u00a0Rivian, Bollinger, and Lordstown.<\/p>\n
Pickup trucks have been a hot startup market as EVs seek to remake trucks with better storage room and torque. Plymouth-based Rivian captured the public\u2019s imagination at the 2018 Los Angeles Auto Show \u2014\u00a0and millions in investment dollars from Amazon.com Inc.’s investment arm\u00a0and Ford Motor Co.<\/p>\n
\u201cThe world has changed a lot in these last few weeks,\u201d wrote a determined Rivian to customers recently. \u201cWe\u2019ve shut down all facilities to protect our team and to help slow the spread of COVID-19. While this situation has required us to redefine workflows and rethink the ways we collaborate, it hasn\u2019t stopped us from making progress.\u201d<\/p>\n
Like establishment automakers, Rivian says the COVID-induced slowdown will impact its product timing. Rivian’s planned delivery of its $69,000-plus R1T pickup this fall has been moved back to 2021 due to the shutdown of its Normal, Illinois, plant.<\/p>\n
Tesla, too, was ramping up production of its signature Model S sedan in Fremont, California, in 2008\u00a0when the Great Recession hit and\u00a0capital markets dried up. Tesla required a $465 million loan from the\u00a0federal government to survive.<\/p>\n
Analyst Abuelsamid said he is confident\u00a0Rivian will survive the pandemic: “They raised over $3 billion. Not only have they raised the money but they were really smart in offering up their platform to partner with other companies.”<\/p>\n
Rivian has made its platform available to use for delivery vans and to Ford to make electric Lincolns. “That is going to give them a bunch of extra volume to generate some scale and help reduce their costs and improve their margin,” he said.<\/p>\n
Bollinger Motors started on founder Robert Bollinger\u2019s upstate New York\u00a0farm as the successful cosmetics marketing entrepreneur sought to find an electric truck solution to his work needs. But as his product matured, Bollinger realized he had to move to Michigan \u2014\u00a0a decision that is paying dividends now.<\/p>\n
\u201cWhen it came time to engineer to the point of production, there were so many engineers needed,\u201d he said in an interview. \u201cThe team moved out here \u2014\u00a0just a handful of us \u2014\u00a0and we hired 30 people. We are a Michigan company now. It\u2019s so easy to just get in a car and go to a Tier One (supplier) for a meeting.\u201d<\/p>\n
Suppliers are shut down, as is Bollinger\u2019s Ferndale plant, so the CEO expects some delays with plans to deliver the brand’s\u00a0first luxury B1 SUVs and B2 pickups next year. But since initial financing has come out of Bollinger\u2019s own pocket, work has been uninterrupted.<\/p>\n
\u201cWe have everyone on board, everyone is still getting paid, everyone is still working full time,\u201d Bollinger said. \u201cWe are unaffected in that way.\u201d<\/p>\n
Though some buyers have asked for returns on their deposits for the $125,000-plus EVs, Bollinger says that 70%\u00a0of the first year\u2019s production run is filled. The shutdown has enabled the company to process data from winter track and outdoor\u00a0testing as well as solidify its dealer network. The innovative B2 pickup\u00a0\u2014\u00a0which can load long cargo through the truck from bumper-to-bumper since batteries are located in\u00a0the floor \u2014\u00a0will be sold through independent dealers in Detroit, New York, Miami, Los Angeles, San Francisco\u00a0and Dallas.<\/p>\n
Bollinger plans big news in the next month about its third-party production partner.<\/p>\n
\u201cInstead of us trying to figure out manufacturing \u2026 and have a huge learning curve, we\u2019re going with someone who has been building trucks for decades,\u201d Bollinger said. \u201cWe are crazy excited because it\u2019s the best partner we could use for this.\u201d<\/p>\n
Lordstown Motors CEO\u00a0Burns bears the twin burden of meeting orders \u2014\u00a0and of saving a town. The EV pickup maker has the hopes of Lordstown, Ohio, riding on its shoulders after GM abandoned production of the Chevrolet\u00a0Cruze compact sedan and threw the northeast Ohio community\u2019s future into doubt.<\/p>\n
Now with the entire U.S. economy on edge, Burns says production of the Endurance pickup will likely not start until January 2021, a month later than originally slated. COVID-19 has delayed funding as well as prevented the startup from making modifications to the 6.2 million-square-foot plant.<\/p>\n
\u201cOrders are still coming in. That\u2019s the one thing that hasn\u2019t stopped,\u201d Burns said. Akron-based FirstEnergy utility company has pre-ordered 250 trucks. Lordstown plans to produce 20,000 units in its first year with plant capacity to produce more than 400,000. The automaker has also received a letter of intent from Innervations, a Florida-based company specializing in fast DC and Level II EV chargers, to broker 1,000 Lordstown Endurances to their clients to convert their company fleets to electric vehicles.<\/p>\n
Lordstown Motors recently posted a video\u00a0of its Endurance truck in action. It uses a four-wheel-drive hub-motor system that reduces the number of moving parts in order to slash the lifetime vehicle service cost\u00a0to commercial fleets.<\/p>\n
A planned unveiling of the Endurance at the Detroit Auto Show in June \u2014 now canceled \u2014 will likely take place in Lordstown\u00a0instead.<\/p>\n
When he started Lordstown, Burns didn\u2019t think if his business model was crisis proof. \u201cWe just did it because it was a market we knew and we thought it was attractive \u2026 if something is attractive to a fleet in good times, it\u2019s probably just as attractive in tough times,\u201d he said.<\/p>\n
Perhaps the most Tesla-like startup is Lucid, which introduced its gorgeous Air prototype sedan at the New York Auto Show in 2017. CEO Peter Rawlinson and his San Francisco-based team have since secured financing for a production facility in Phoenix, Arizona \u2014\u00a0though work on the facility has stalled under the Arizona\u2019s shelter-in-place order.<\/p>\n
Rawlinson, vice president of engineering at Tesla\u00a0before joining Lucid in 2013, is optimistic.<\/p>\n
\u201cThe relationships with Lucid\u2019s investment partners remains strong in the current business environment,\u201d Rawlinson said in a statement, noting the plant\u2019s machinery and tooling were well underway before COVID-19 struck. \u201cLucid is in a sound financial position, and has the financing needed to take it to start of production for the Lucid Air.\u201d<\/p>\n
Before the coronavirus pandemic, Lucid\u2019s workforce had grown to more than 1,000 employees and the CEO says the brand is using the crisis\u2019s social distancing challenges \u201cto optimize connectivity and remote-work communication across the organization, including a range of disciplines from CAD computer design to CAE analysis and software coding.\u201d<\/p>\n
EV-maker Faraday Future has been a cat with nine lives since its 2014 founding\u00a0\u2014\u00a0promising everything from supercars to crossovers. The China-financed startup is in the midst of transforming its Hanford, California, factory to vehicle manufacturing.<\/p>\n
Fisker, a contemporary of Tesla found by legendary Aston Martin designer Henrik Fisker, showed off its latest Ocean electric SUV in January, with a plan to deliver its first vehicles to customers in late 2021.<\/p>\n
\u201cIn general\u00a0for the EV market it\u2019s going to be challenging going into 2021 and even 2022,\u201d\u00a0Navigant’s Abuelsamid said. \u201cWe are going to be in probably a very deep recession in the second half of this year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
COVID-19\u00a0has hit the U.S. auto industry hard,\u00a0but\u00a0the most precarious companies might\u00a0be the handful of electric auto startups\u00a0on the cusp of key vehicle launches. Rivian, Lordstown Motors, Lucid, Bollinger Motors, Faraday Future, and Fisker are leading a\u00a0historic wave of startups that, inspired by the success of Silicon Valley’s Tesla,\u00a0see a new future of battery-powered sedans and […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/25149"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=25149"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/25149\/revisions"}],"predecessor-version":[{"id":25150,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/25149\/revisions\/25150"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=25149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=25149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=25149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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