EV Start-Up Ventures Are No Picnic
Here’s my comment pursuant to a conversation in the comments section of my recent post on electric vehicles. Apparently, a British billionaire who made his money in vacuum cleaners thinks he’ll plow $2 billion a business to build a hot new electric vehicle from the ground up.
I urge caution. The start-up EV OEM industry is a graveyard for rich people and their foolish investors who underestimate the challenge. In particular, the product has to be exceptional, as it needs to compete against established automakers and their warranties that actually mean something.
The textbook example of a fail here is Coda (pictured above), which had a small, ugly, poorly designed, tinny, underpowered, $41K offering with a 75-mile range. Not only did the product itself suck (it was more expensive than and inferior to the Nissan Leaf in every conceivable dimension), they couldn’t find anyone stupid enough to believe that this bunch of idiots would be around in 12 months (let alone 60) to make good on the warranty.
Ironically, I had met with the Coda exec team in Santa Monica (CA) about a year before their bankruptcy and tried to get them to bring me on board to provide strategic direction. Frankly, I don’t know exactly what I would have done had I gotten the gig, as there was literally nothing I could identify that they had done right. But that never surfaced as a real problem, as some senior VP told me, “No thanks, Craig. We got this.”
I smiled, told him I understood, shook his hand, and left.
Craig,
Sir James Dyson doesn’t seem to be interested in producing a mass produced consumer vehicle. He’s indicated the vehicle will target the luxury exotic sports car purchaser.
As such, all he has to worry about is image,styling and performance. In that rarefied class, price isn’t a consideration. If a small volume marque can produce designs with sufficient appeal, price and volume are immaterial.
The Bugatti Chiron is limited to a production run of 500, but at nearly $3 million per car,(all pre-sold)the cars future is assured.
You were wise to avoid the very odd group of individuals who made up the investors in CODA. The whole history of the enterprise seemed solely designed to obtain DOE funding, then fail.
Coda imported the donor rolling stock from a company owned by a PRC weapons manufacturer, who bought the the dyes and components of a nine year old obsolete Mitsubitshi. The PRC company was controlled by a PRC Commissar and PLA General who was also a director of several PRC resource companies including coal and oil companies.
The Weapons company gained fame for being caught shipping and entire ship load of weapons in defiance of US sanctions to Mugabe’s regime in Zimbabwe. The manifest terms the cargo “farm machinery aid “.
The American directors were all corporate raiders with a long history of very dubious investments and shady commercial dealings.