They Were Wrong About Electric Cars

EV companies keep going bankrupt. Fisker, Lordstown, Faraday, Aptera, Companies that have gotten millions,  even billions in investment to produce the next Tesla. And have worked with the  government to bring us an electric future Have failed, one after another, taking  those billions of dollars to the grave.

So it begs the question, “Are  EV companies doomed to fail? ” Well, the only way to find out is  to figure out why so many of these companies crashed and burned in the first place. And when I say so many, it  really is a lot of them.

It seems like every 2 weeks, some schmuck with a couple billion bucks in silicon valley  money is heralded as the next Elon Musk And I can’t really blame  people for getting excited, EVs are the absolute hotness, they’re  the meta of cars and tech today Hell, up until last month even Apple was  apparently working on an Electric car, which I can only imagine would have cost twice as much as every other EV and only  be able to be charged upside down. But here’s the thing, the electric car  craze isn’t necessarily a modern phenomenon EVs go back longer than you think - back to  the 1830s, and they pretty much all failed too. Before even Karl Benz built that  very first gasoline-powered car, electricity was considered the up  and coming way to propel your wagon, And to give you some context, the other  options were steam engines, or a horse.

But back then, electric motors weren’t efficient, and perhaps more worryingly,  batteries weren’t rechargeable So EVs ended up being kind of a parlor trick, a gag, to show your friends that you could  make your carriage move without a horse Fundamentally, the technology  wasn’t in a place where people found it practical. Something to keep  in mind as we move into the future. battery and motor tech improved slowly  over the next couple hundred years, But, It turned out making gasoline go boom  was much easier, and much more efficient.

So explode dead dinosaurs we  did, and EVs basically died Until, well, now. More specifically until 2008, when a  little company called Tesla started mass producing a hot rodded  Lotus called the Tesla Roadster. Little high-schooler Guff  was in love with that car, and I was on the EV belieber  long before most people.

I even wanted to work for  Tesla, that didn’t work out And from there, EVs only became  more and more mainstream. Now, you can't turn on the news  without hearing something about EVs. Hell, I’m constantly getting  2 hour long range test videos in my YouTube home page … and I daily a rotary But it seems like the news is changing.

The EV winds have shifted, and no longer are  we talking about never-ending stock growth, or optimistic government mandates Now we’re talking about failure. Plummeting share prices, missed sales targets, Bankruptcy. Dozens of EV and EV related  companies are crashing and burning, but when you ask the industry experts why,  they’ll give you a dozen different answers.

Like take this industry expert here: “Sir, why are EV companies failing? ” “Sir? ” “Huh what?

” “What could you be doing that is more  important than the fate of electric vehicles—” “I’m playing the new Asphalt Legends Unite “Oh snap there’s a new Asphalt game? ” Yeah, it just came out for mobile and consoles, and all your progress carried over from  Asphalt 9, so you won’t miss a beat Can I drive an EV in the game? “There ARE over 250 hypercars to unlock, and a new  garage so you can show them off as you collect em.

Like the Rimac Nevera, since you’re  so obsessed with electric cars. ” “That’s the fastest electric car in the  world, I don’t appreciate the slander okay” “Why don’t you use your own phone? There’s  a new co-op mode so we can play multiplayer” “My phone sucks” “Use your PS5 or Xbox then, its cross-play” “Have you seen my car?

? I can’t afford a PS5” “Dang man, these graphics are crazy tho” “Yeah its a brand new lighting system, check out the Singapore track with  the octopus and rollercoaster” “This is Insane for a mobile game” “Yeah and its free to play too” “Okay fine, I’ll download it myself! ” “Since its brand new, there are a ton of  rewards if you download and start playing now, you just gotta scan the QR code or  hit the link in the description” “Hey!

” “HEY! ” “Huh? What?

” “Don’t you have to tell them  about EV’s or something? “Huh? Oh yeah!

” Ahem, Sorry! The big companies, Tesla, Rivian, Lucid, or any of  the legacy car makers spend billions and billions of dollars on EV research trying to make it  work, and to make it appealing to consumers and almost all of them promise that electricity  is the only sustainable future for cars, the work they’re doing is going to help the planet  – and you driving an EV, well that’s inevitable. - well, all companies besides  one, but we’ll get to them later But of course they say that, they have incentive,  like $623 Billion US dollars kinda incentive That's the 2024 projected revenue for EVs globally Which, by some predictions, is on pace  to be a trillion dollar industry by 2028 But even with all those dollars it turns out  building a car company is pretty damn hard, Like, for example, remember Faraday Future?

If you don’t, I don’t blame  you, so here’s a refresher. Back in 2015 they were the super hot EV startup  that hired people from Apple, Tesla, and SpaceX They were so promising that articles even  speculated on if it was secretly owned by Apple They were going to build luxury  EVs that rivaled the best of best, all while being faster than  Tesla on the drag strip And those promises led to some serious  investment, even with a couple of huge red flags At first, it was leadership concerns  that led to a couple of CEO changes, But despite that, within just a few years Faraday  Future was getting stupid money from investors. 1.

5 billion US dollars here,  another 550 million injection there, And despite all that money, Faraday kept saying they needed more in order to deliver  this super EV by the end of 2018. . And when investment wasn’t enough, there was debt, taking out big loans and using  the company shares as leverage.

But, even though boatloads of money were  coming in, spaceship loads of money were being burned through (are spaceships bigger  than boats? Idk you know what I mean) And can you guess how it all ended? ?

They didn’t release their amazing EV in 2018 And they filed for bankruptcy in 2019. In 2021, as a last effort to revive  the brand, they tried to go public via a merger with a company called  Property Solutions Acquisitions Corp - And once again had a promising plan  - Geely, the chinese car brand, would invest into faraday and help  with the manufacturing in China. And then they struck a deal with Foxconn to help with strategy to make sure everything  actually went as planned this time And then it happened, Faraday Future  went public!

And it seemed like this little EV company that could was  finally getting its act together. Yeah, Nope. By january of the next year, members of Faraday  Future were getting subpoenaed by the SEC, Turns out they were being  investigated for misleading investors And from there the company basically faded away As for that car that they promised in  2018, well it did get released.

. In 2023 And by released, I mean, 4 were  sold…and like 6 were leased. .

They cost $309,000 each by the way…? ? ?

And well, if their stock price is any  indication as to their success… its down 99. 98% But okay, that’s just one example, you might say Okay sure! Let’s talk about another little  EV startup based out of Lordstown, Ohio Lordstown Motors They were founded in 2018, and their  great idea was to build an electric pickup truck and to do it fast, so  they could beat everyone to market.

Let me know if their business plan sounds familiar Promises of a world-beating Electric car Massive initial investments, a reverse merger with another SPAC  company to go public on the NASDAQ. A promise to deliver cars in  2020, that never happened! It was all eerily similar to Faraday Future, down  to the fact that the SEC even had to get involved!

The SEC said Lordstown exaggerated  its demand for the EV pickup truck Lordstown said they had over 100,000 nonbinding  pre-orders, mostly from commercial fleet companies But the SEC’s investigation found  that the companies that pre-ordered the trucks weren’t fleet companies, or  intended to purchase the trucks for use. It was supposedly all a  big scam to fool investors. Oh and the timeline to build the  truck?

The SEC said that was a lie too And in 2023, they filed for, say it with me, Bankruptcy! A word you guys better  get used to hearing in this video. But okay, that's just two companies,  two multi billion dollar-invested, public companies.

But still just two. So let’s make it 3 with a company that you may  have read about in the ol newspaper recently. Fisker.

But we start with, not the  current fisker, the first Fisker. . Fisker Automotive, which was  founded by Henrik Fisker in 2007.

The same Henrik Fisker who designed  the Aston Martin DB9 and BMW Z8 And with this new venture, he  was off to the races immediately Raising $528 million dollars from  the US government and then another billion in private investor funding Because, well, he was building  the future, he was building an EV. Well, sort of, it was a range-extended  EV. Which is essentially a hybrid, using a 2.

0L turbo engine from GM. But instead of powering the  wheels with the gas engine, it was only used to charge the battery,  which propelled the two electric motors. It was a unique design, and  unlike other EV companies, he did actually have a car  to deliver, the Fisker karma It took a few manufacturing hiccups and  delays, but it hit the streets in 2011 And immediately flopped.

For a sporty looking car, it wasn't sporty. 0 to 60 took 6. 3 seconds, not exactly the numbers you'd expect from  a car advertising 900 ft pounds of torque And then there were the numerous software  issues, that constantly plagued owners But making a crappy car wasn’t the  thing that actually killed Fisker.

There are plenty of crappy cars  on the market selling just fine, just walk into a Nissan dealership. The issue was the batteries. Fisker’ had one lone battery  supplier, A123 Systems, And A123 found out that there  was a problem with one of the manufacturing plants and making the batteries A problem that meant basically  every battery leaving that plant was underperforming and had horrible durability So a recall was issued for any Fisker Karma that  was affected by that one manufacturing plant Now, it didn’t seem like a huge deal for  Fisker, just fix the cars and move on.

But for A123, it was catastrophic. The recall cost them so much money, that  just a year or so later, A123 went bankrupt. And Fisker lost its sole battery supplier This put them in a bit of hot  water, but at least they had all those taxpayer dollars from the US government!

Wellll, less than half of that $528 million  had actually been paid out to Fisker. Because that money was contingent on Fisker  meeting deadlines and paying off certain debts. And to top it all off, they had  managed to sell only 2450 Fisker Karmas To put that into perspective, the average cost  with all research and operating expenses to produce one fisker karma, ended up around  $600,000.

And they sold them for 100k. So, needless to say, the company  stopped all production in 2012, Henrik Fisker resigned from the company due  to disagreements with the executive board, and then finally in 2013, they  filed for the Big B, Bankruptcy. .

But it turns out, Henrik Fisker  wasn’t content failing just one time. In 2016, he launched the current day Fisker Inc, not to be confused with the  previous Fisker Automotive . And This time it would be a proper  EV company, no hybrid malarkey Tell me if you’ve heard this plan before: He created a vision for a world-beating  EV, this time the Fisker Ocean, He sold that vision to investors,  who paid him mad skrilla And then Fisker got acquired through  a SPAC deal so they could go public!

And this highly original plan seemed to  be going well as recently as this year. The Fisker Ocean was finally released as a 2024  model and well it didn't get horrible reviews. .

Well, MKBHD called it “the  worst car I’ve ever reviewed” And Road And Track said “the  2024 Fisker Ocean Isn’t Ready” But you know what, sticks and stones,  or something like that, right? (news article showing Fisker  just filed for bankruptcy) Awwww shitttt I totally didn’t see that coming! Fisker filed bankruptcy just  last month in June, and well, if you just bought a Fisker Ocean,  you probably have a lot of questions.

Will fisker honor warranty? Will they supply  parts? Can I even get the car serviced?

Will insurance cover Fiskers? Will my damn phone  app work for as long as I have the car? !

IDK dont ask me, you’re the one who decided  to drop 50k (50k! ) on a car from a startup. And that’s the thing.

These  companies; they’re just startups. Just like all those other  Ycombinator, Silicon valley, Pied Piper, venture capital tech  companies that die off by the dozens. All these companies might be car companies, but they are structured and  treated like tech companies.

Billions of dollars of investment from  venture firms wanting to fund some charming personality with pie-in-the sky claims, on  the off chance that he’ll be the next Elon. But building a car company is hard.  It's slow, it requires far more time, effort and innovation than an app or  a gadget, all in a cutthroat market saturated with players that have existed  for over a hundred years in some cases.

And despite government subsidies and  mandates that say we’ll be full EV in 5, 10 or even 15 years, the reality is  that the market is showing otherwise. In today’s economy, people  struggle to afford groceries, let alone afford an electric car, which  on average transacts for over $55,000. Insurance on EVs is typically around 20%  more expensive than a similar gas car And, at least in much of the US, a huge number  of people live in multi-family housing with no access to EV charging, and often don’t have  many accessible charging stations nearby.

All that has led to an EV sales  slowdown, with little sign of letting up, as people are holding on to their  old cars for longer than ever before. So it makes sense why EV companies are failing.  And not just these high profile ones too!

Aptera wanted to build an electric 3-wheeler all the way back in 2006. They  went out of business in 2011. Coda Automotive raised 320 million  in 2009 for their EV sedan (that looked like a 20 year old Civic.

) They  burned through all their cash by 2013. But okay okay i hear you, you’re saying “Guff, they didn't all fail! and  wheres the mini cooper build?

” Okay, you shut your mouth about the Mini  Coope. And let's address the first half, you're right. It wasn't all doom and gloom…mostly Both Rivian and Lucid are making some dope  cars, cars you'll actually see on the road what you don’t see is the pile of  money being burned in the background Take Rivian for example, who spent 12  billion dollars building and selling cars while only generating  around 7 billion in sales They just recently reported a Q1  net loss of 1.

5 billion dollars. . Lucid, on the other hand, is doing swimmingly,  having just reported a Q1 loss of $685 million dollars.

. which to be honest is less than  last year even though stocks are still plummeting Both Rivian and Lucid seem to be  burning money just to stay afloat, and maybe that's the name of the game, As long as they’re growing, they’ll  eventually turn a profit, right? Well at this rate, analysts put Lucid  on pace to make its first profit year in 2030…if they can keep the doors open  and keep investors calm for that long And that's just it, companies these days are  designed to be constantly juiced by investors in the hopes of keeping their stock prices  afloat, despite all the money being spent And unless something miraculous happens, excellent cars like the R1T and Air  Sapphire might go the way of the Ocean… Turns out, Rivian just  managed themselves a Miracle!

Volkswagen just announced that they’re  investing 5 billion into the company. Volkswagen realized that spending all  that money on their own EV development was pointless, because they could just  pay Rivian and get it done for less! And well Rivian can benefit  by staying alive.

Win-win Now, there is one company that  I have conveniently left out, and no doubt many of you have been yelling  at your television this entire time. A company that not only is  staying afloat, they are thriving. Tesla.

For all the billions that Rivian has lost, Tesla made over a billion dollars  in profit in Q1 of this year. And that’s low for them! The same time  last year, they were doing over 2 billion.

But here’s the thing, are they  the rule or the exception? Tesla is a hugely successful EV company,  but what they aren’t is a startup, they were, when they were one of the  first to market with a usable EV and they used that momentum to work their way up  to becoming essentially a legacy automaker, One that actually sees a  profit, a big one at that. Living alongside the likes of GM or Ford or Toyota And then there’s China, If you live in the US, you’ve probably  never heard of the Chinese brands, but brands like BYD are growing at  a massive rate in asia and europe, In Q4 of 2023, BYD was the first EV  company to surpass tesla as the top selling electric car manufacturer  (q1 2024 went back to tesla) And with China practically owning the battery  mining, refining, and production business, it's expected that we will see over 100  new Chinese EV companies emerge in 2024.

Whether or not they see the same fate as the EV startups we’ve seen in the west  is a question I can’t answer, But with America imposing  102% tariffs on Chinese EVs, they certainly have their work cut out for them. So then, the EV market is  a bit of a rollercoaster. If it's not companies crashing and burning, it's the average person not being able to  afford them, or not being able to charge them.

Or the question of if the US power  grid is even capable of handling them? Which I can’t answer, because I live in Texas, and as much as enjoyed standing up every morning  in class and saying “honor the Texas flag, I pledge allegiance to thee Texas, one  state under God, one and indivisible”, for the entire 12 years I was in public school, I can tell you as a Texan that not  all power grids are created equal (show Houston power outages) So when inclement weather hits and  there is no electricity for 3, 4, 5 days in a hundred mile radius,  what am I supposed to do? Of course, all of these issues are  well known and well documented.

There are already numerous government initiatives,  strategic changes, and investments in grid technology happening as we speak in order to  prepare the country for the eventual EV takeover But, depending on who you ask, some people  might say the future isn’t Electric. At least, not fully electric. Former CEO and current chairman of Toyota, Akio Toyoda, says that fully electric vehicles  will never account for over 30% of the market Now, before you start yelling, it's not that he’s saying to stick  to Internal Combustion cars either.

From his perspective, the enemy is still carbon  emissions, but instead of a singular focus on EVs, Toyoda proposed a multiple pathway  approach to the future of cars. Customers should be the ones who choose what path  they want to take, not regulations or politics. And it's the job of the car manufacturer to be prepared for whatever the  customer’s preference is.

It’s a consumer-centric approach,  which is refreshing in a market that seems to live on the push  and pull of government mandate. If you look at Toyota’s business model today,  they are tremendously bullish on hybrids, with nearly every car in their lineup  having some type of hybrid option. They believe hybrids are the perfect  segue between ICE and EV as the world continues to fight the geographic and economic  hurdles that come with a full EV adoption.

And the market is certainly receptive to it, with many of Toyota’s hybrid cars continuing to  sell out, even in a market that is slowing down. And tbh I ain't mad, because hybrids  have been historically pretty cool. The holy trinity, the P1,  LaFerrari, and 918, were all hybrid.

The corvette e-ray, Lamborghini Revuelto, Acura NSX Mclaren Artura And even the new 911 GTS And it's not just super cars obviously. The  Prius prime, Honda CRV, Grand Highlander, CX90, Rav4 Prime and so on have people getting  into fistfights at dealerships just to buy one. The same can’t be said for cars like the  Ioniq 5 and 6 or the Mercedes EQ series, which are actually pretty solid Electric cars, but continue to sit unsold at  dealer lots despite heavy discounts.

And with hybrids are eating the  lunch of EVs across the board, the words of Akio Toyota have gone from EV  FUD to automotive prophecy over the last year. So then, Do I think EV  companies are doomed to fail? No.

Not necessarily EVs are the future, but maybe a further  future than we originally thought. People aren’t so willing to  give their hard-earned money to companies that might not exist in a few years, for a product that isn’t  totally practical for them, despite tremendous promises  or government mandates. And because of that, the pressure is on for EV  companies like Rivian or Lucid to either find a way to bring us the future, or survive long enough for  us to get there ourselves.

Thanks for watching. Don't forget to like the video and  subscribe if you haven't already. If you've got an opinion about EVs  be sure to let me know by joining the Albon Discord at the link the description I'll see you guys in the next one.