Electric Auto Startups Hit Speed Bumps After Heady Debuts
But local government officials are not sure what to make of the company, which had discussed adding more than 2,000 jobs in a region plagued by plant closures.
New York: Several electric auto startups that raised large sums from investors in the wake of Tesla’s ascent are hitting potholes as they pursue next-generation vehicles.
The most recent crisis occurred at Lordstown Motors, which announced Monday the sudden departure of two top executives after warning last week it needed more capital to keep operating.
Company officials plan a series of events dubbed “Lordstown Week” later this month to shore up investor support.
But local government officials are not sure what to make of the company, which had discussed adding more than 2,000 jobs in a region plagued by plant closures.
“Am I confident? Not as much as I was a week ago,” Lordstown Mayor Arno Hill said earlier this week. “We’re waiting and seeing what the next step is.”
There have been similar leadership shakeups in at least two other electric auto companies that recently went public, raising questions about the transactions and underscoring the difficulties startups face in competing in the capital-intensive industry.
“It’s definitely more challenging for a small company,” said Jessica Caldwell, executive director of insights at Edmunds.com, pointing to heavy spending needed to build and maintain factories and obtain key components.
“It does seem like Tesla is an overnight success story, which is not really the case,” she told AFP. “But they came in and disrupted the space amongst automotive companies that have been around for decades. Everyone wants to believe that the dream could happen.”
Lordstown’s woes come in the wake of significant electric vehicle (EV) announcements since the November US presidential election from Ford, General Motors and other auto giants, intensifying competition.
Rising costs – Lordstown Motors was launched by Steve Burns in November 2019 after the acquisition of a recently-shuttered Ohio auto plant owned by GM.
Source: AFP
