November 30, 2022
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5 Failed EV Startups That Aimed Big

Failed EV Startups That Aimed Big

When we say electronic vehicles, one brand that comes to everyone’s mind is Elon Musk’s Tesla, a massive EV company with giga factories across the globe, paving the way for the mainstream adoption of electric cars. But it wasn’t an easy feat. In the late 2010s, the future of electric vehicles looked risky as headlines frequently predicted doom for many startups. And, whenever a new startup emerged, critics were quick to label it as “Tesla Killer.” However, those titles didn’t stick, and Tesla remained at the top. According to Automotive News Research & Data Center, Tesla’s sales increased approximately 42% year-over-year to 110,000 in Q1, which is 21.8% of 503,709 for the segment. This is huge compared to other luxury car brands that faced a double-digit decrease in sales, intensifying the effect of Tesla’s domination.

List of 5 Failed EV Startups That Aimed Big

  • Fisker Automotive
  • Aptera
  • Faraday Future
  • Dyson EV
  • Nikola Motor

However, that didn’t stop countless startups like Rivian, Bollinger, Canoo, and others from having a try. As 2022 is shaping up to be a great year for electric vehicles and startups, here’s a look back at Failed EV Startups That Aimed Big!

1. Fisker Automotive

It all began with Henrik Fisker, a Danish automotive designer best known for designing some iconic cars like the BMW Z8, Aston Martin DB9, Artega GT, and many more. He was ambitious and wanted to do something huge for automobiles. So in 2007, he opened up an actual car manufacturing company called Fisker Automotive with his business partner Bernhard Koehler. Together they planned to build plug-in hybrid luxury sedans for the mass market. So in 2008, they unveiled the Fisker Karma, a sporty luxury sedan packed full of new technology. The company was granted 528 million of loans from the US Department of Energy based on the promise that it would deliver 30,000 hybrid cars for the US market.

By the year 2011, Fisker finally started selling its official Fisker Karma. However, it was a total disaster. There were quality issues, and the car wasn’t worth a hundred thousand dollars, especially when compared to the newly released Tesla Model S at 57000 dollars. Plus, their battery supplier, A123 Systems, went bankrupt the following year, forcing the production line to stop completely. The DoE also froze the remaining loans when it became apparent that Fisker wouldn’t meet those requirements. Soon the company went bankrupt and sold all the assets but the name to a Chinese company called Wanxiang Group.

2. Aptera

Around the same time, when Tesla and Fisker were getting funding from the Department of Energy, one company that was struggling to raise financing was Aptera. The California-based company, formerly known as Accelerated Composites, was founded in 2006 under the leadership of Steve Fambro. Shortly after, it announced and showed the prototype of its first electric vehicle called the Type-1, later named Type-2e, with an impressive range of 300 miles. The futuristic spaceship-like design was quite unique and classified as a three-wheeled motorcycle. But since three-wheeled vehicles are not classified as cars, Aptera failed to receive any loans from DoE.

Aptera

So, Aptera quickly shifted all its R&D to the 4e, a four-seated electric sedan that it believes has a better shot at getting DoE funding. Later in Sep 2011, DoE issued a conditional commitment letter for 150 million dollars of loans if the company raises 80 million dollars privately, which Aptera failed to gather. So, due to a lack of funding in Dec 2011, Aptera Motors shut down.

3. Faraday Future

In 2015, Faraday Future, a California-based electric-car startup with deep ties in China, made a lot of buzz. Its ambition was to take on the EV world with a star-studded cast of top executives from Tesla, Audi, Lamborghini, BMW, Ford, Google, and more. In November 2015, Faraday Future announced its plan to build a billion-dollar manufacturing plant in Nevada, the same state where Tesla was already building its GigaFactory. In 2017, it made a big splash at CES with its FF 91 luxury SUV priced at around 180000 dollars. In terms of looks, the car did make Tesla look like an amateur. The company also claimed that it would beat the fastest Tesla car in a drag race. The possible range of 482 miles, when driven at 55 miles per hour, made the FF 91 look like a true Tesla killer.

Unfortunately, the car didn’t respond during the unveiling and was a huge disappointment. Despite that, it got thousands of reservations. Finally, the company announced that the production would start in early 2018. However, the company couldn’t make a single product as it went into many financial and organizational problems. All because of this man called Jia Yueting, a Chinese billionaire who is the founder of Leshi Holding Group and the former CEO of Faraday Future. His aggressive money borrowing brought the company’s downfall in three short years.

4. Dyson EV

One of the recent challenges to throw in the towel is James Dyson’s Dyson EV. Being a successful engineer, techie, and entrepreneur, Dyson made his fortune developing high-end home appliances, most notably vacuum cleaners. However, in 2017, the world learned that Dyson started down the difficult road of designing an electric car from scratch. According to The Times, Dyson’s electric car, codenamed “N526,” was an all-electric seven-seater SUV with a whopping 600-mile range per charge, almost doubling the long-range Model X’s 314 miles. It also looked really cool with storage bins and a holographic-style instrument display.

However, after sinking half a billion pounds of his own money into the project, he found out that he would have to sell each of these cars for 150,000 pounds to break even. So, in October 2019, Dyson had to pull out of the project as he realized that the project simply wasn’t commercially viable.

5. Nikola Motor

It would be more appropriate to call this a fraud story rather than a failed startup. But since Nikola Motors started as an EV startup, we didn’t want to miss the chance to share it with you. The company was founded in 2015 by the infamous Trevor Milton. He set out to make zero-emission big electric trucks using hydrogen fuel cell technology while many big players like Tesla, Daimler, and others are working on all-electric trucks. The excitement around the trucks peaked when General Motors announced a $2 billion deal to acquire an equity stake in the company and assist in releasing its Badger pickup truck. 

Nikola-Motor-2

However, less than a week later, a report from Hindenburg Research accused Trevor Milton of fraud based on conversations with an anonymous former employee of Nikola Motors. The report alleged that a much-publicized video of the Nikola One In Motion was staged to give the impression that the truck was capable of moving under its own power. In contrast, it was simply rolling down the hill. The indictment also gave more details on how all the truck components were powered externally, not by the truck’s battery, and neither fuel cell nor hydrogen gas storage tanks were installed. On top of that, the functioning dashboard that Milton showed was an off-the-shelf tablet.

Final Say

From these failed stories, it’s pretty clear that making a new electric car is complex and expensive. But it’s even more difficult for new startups. As MKBHD explained in his recent video, it’s easy to launch a startup, make one prototype and build all the hype. But raising enough money to build an actual factory and ship the cars is where all failed. However, the good news is it’s not entirely impossible. Take the Rivian for an example, which is delivering cars and promised to produce 25,000 electric vehicles by this year. But the consumers need to keep in mind that it took almost three or more years to deliver these cars. And, this isn’t just Rivian. Even though Tesla showed the Roadster in 2017, no one knows when it will actually ship the car. So be aware of these electric car companies and their far away and unknown delivery dates.

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