Just outside the English market town of Bicester, 15 miles from Oxford, lies the shell of a factory that sits at the forefront of the electric vehicle revolution in the UK. Under a cavernous warehouse ceiling, dozens of gigantic black robotic arms sit poised over the vacant assembly bays, waiting to mass-produce electric vans for Arrival, the EV maker start-up.
By autumn, this pristine hub is supposed to begin producing electric vans for UPS, the US parcel delivery group. But already the work is behind schedule. A sister plant in the US will not be ready in time, and so the UK factory will have to shoulder the bulk of this year’s production. Arrival now expects to make just
600 vans this year, less than half the number it promised analysts in 2021.
The company is not alone. A plethora of electric vehicle maker wannabes — some opening factories for the first time, and many with eye-watering valuations — are facing their biggest challenge yet: making vehicles. From China’s Nio to the Amazon-backed, one-time Wall Street darling Rivian, almost every one of the auto world’s feisty new entrants has stumbled at this stage.
The industry’s shift to electric cars was always expected to lead to a deluge of new entrants because the barriers to entry are so much lower on battery vehicles than on their engine-powered forebears. But the combination of Tesla’s helium-filled valuation and the market tolerance for lightly scrutinized reverse takeovers led to a stampede of EV businesses listing their shares.
As a result, companies with neither profit, nor in many cases even revenues, found themselves on public markets, squinting into the full glare of the world’s investment community. Canoo, Lucid, Nikola, Lordstown, Fisker, Arrival and Rivian were all among businesses that went public before shipping a single completed vehicle to a customer.
Early market euphoria for EV start-ups begins to fade