EV start-ups: Can anyone replicate Tesla's runaway success?

EV start ups 2023

Rising interest rates have made it harder for new start-ups to attract investment

From Arrival to Faraday and Rivian, numerous start-ups are vying to establish themselves as credible manufacturers

Since the emergence of Tesla, the electric vehicle market has blossomed.

Entrepreneurs around the world have examined the Tesla example and decided to create their own new electric vehicle. The idea was simple enough: throw some batteries below the seats, put in a powerful motor or four, design a rakish exterior and elegant interior, and people will flock to your product with wads of cash in their hands.

Upon closer examination, it took Tesla more than a decade to turn an annual profit after spending billions of dollars to get there and having throngs of buyers willing to pay upwards of US$100,000 (£82,300) per vehicle.

Just like in the “wild west” days of the automotive industry a century prior, many will enter and few will succeed. Tesla is currently on a path to succeed, but most of the other startups will not. Many of the hundreds of EV startup companies around the world are barely worth noting, but there are a few that have garnered the attention of investors, suppliers and potential buyers.

Tesla hit the market at just the right time. By the time the Model S was introduced, the global economy was in its long, slow and steady rise from the “Great Recession”. Investment money was virtually free as interest rates around the world were at or near all-time lows. Buyers were looking at Tesla as the latest way to display their personal success and/or their stand on breaking from the petroleum industry. Investors saw Tesla as the newest tech company and, later, the IBM/Microsoft/Apple wave that they missed decades ago. This supported Tesla’s growth through the tough times and prepared it for a position among the world’s automakers. But those days have come to an end and few companies will follow in its tire tracks.

Interest rates have risen and investment money is no longer cheap. Promised “eventual” profits aren’t good enough to find financiers for a risky entry into the automotive industry. And the new players do not seem to have engendered the “cult of personality” that helped prop up Elon Musk and Tesla this past decade. It’s a different world with different circumstances, leading to even fewer startups being successful in the long term.

AFS is tracking hundreds of EV startups. While most of them do not have the inertia to qualify for coverage in the AFS forecast, here are a few of the most significant startups and where they currently stand in the marketplace. 


Twenty-six-year-old RJ Scaringe launched his EV startup in 2009 after earning his PhD in mechanical engineering from MIT. Originally named Mainstream Motors, the company evolved into Avera Automotive and then Rivian in 2011. The initial planned vehicle was a sports car, but the company pivoted quickly to focus on autonomous ride-sharing vehicles. By 2016, Rivian settled on a pickup and a sport-utility as the company’s first products.

Scaringe raised millions of dollars and acquired the former Mitsubishi factory in Normal, Illinois. With significant investment, substantial products and a manufacturing space in place, Rivian had the basics to launch an electric vehicle company. Unlike many of the startups of the time, Rivian’s initial production targets were relatively modest, adding to the company’s chances of survival. This package lured General Motors, Ford and Amazon as potential investors. In 2019, Amazon agreed to purchase 100,000 electric vans, a previously unannounced product, and acquire a sizeable stake in the company. General Motors backed away from a tie-up with Rivian, but Ford saw the startup as a good partner to develop large EVs for its brands and also purchased a stake to ensure the development of the new vehicle. By early 2021, Rivian had raised US$2.6 billion (£2.1bn) and an IPO later that year raised an additional US$13.5 billion (£11.1bn). Amazon held about 20% of the company while Ford’s stake was more than 11%.

Following the IPO, Ford decided to end the project with Rivian but held a stake in the company valued as high as US$100 billion (£82.2bn). Ford started slowly backing away from its investment, selling shares and taking financial hits along the way. In its financial report for the 2022 fiscal year, Ford wrote off US$7.4 billion (£6.1bn) of its Rivian investment as part of the US$2.2 billion (£1.8bn) loss for the year. Ford now holds just over 1% of the startup. 

Rivian has been slow in launching its products. The rollout of the R1T pickup was delayed and a fraction of its planned 2022 output was actually built. Delaying the R1S sport-utility has also hurt the company’s image to investors. All of this led to a US$5.0 billion loss in the first three quarters of 2022, more than doubling the loss from the prior year. Year-end production volumes narrowly missed even the most recently revised targets. Stock prices have fallen by 85% from their peak. Increased competition isn’t making things easier for the startup. Beating Tesla to the electric pickup market, Rivian found itself in competition with former partner Ford, which introduced an electric version of the most popular vehicle in the US. Although it has yet to sell its promised Cybertruck pickup, Tesla has cut the prices of its existing vehicles, putting pressure on Rivian’s US$75,000 (£61,700) pickup and US$92,000 (£75,600) SUV.

To save money, Rivian has been cutting jobs. A previously planned second plant in Atlanta, reportedly expected to cost US$5 billion (£4.1bn), has been delayed while the company gets its first plant operating closer to full capacity. Rivian’s once-stellar image has been tarnished over the past year and more work is needed to get the company back on track.


Smaller EV startups tend to believe that focusing on commercial applications is the key to success. Delivery vans with shorter routes make sense for electric vehicle adoption because highway speeds are rarely encountered and overnight charging can be done at the warehouse. Additional incentives in the US from the Inflation Reduction Act have increased the demand for electric commercial vehicles. However, this market is getting crowded with legacy players (Ford, Mercedes-Benz and GM’s BrightDrop) as well as startups, like Rivian, backed by large delivery companies. 

Arrival was one of the first companies to announce its entry into this market and quickly dropped plans for other vehicles to focus on the delivery van. Smaller factories planned in the US and the UK were part of the novel approach that the company was taking in order to launch its vans with as little investment as possible. But more investment is always needed for an automotive startup and that is pinching Arrival.

Plans are still on the books for the factory in South Carolina to begin production in 2024, but more funding will be needed to get there. Already traded on the NASDAQ under the symbol ARVL, the EV maker has seen its stock price tumble from almost US$23 (£18.90) per share two years ago to around 35 cents (£0.29) a share currently. Recent bumps in the stock price have been attributed to short sellers entering the market. As a penny stock, finding new real investors is extremely tough.

Operating costs at Arrival are draining about US$30 million (£24.7m) quarterly, which, by comparison, looks good. Without dramatic cost-cutting and an infusion of cash, Arrival can only maintain this rate for a very short time before draining its coffers. At the time of writing, the company is estimated to not have enough financing to get through 2023.

Last year, Arrival was forced to let go of almost all employees in the UK. Executives have been shuffled and in February new CEO Igor Torgov was announced for the company. Torgov has no automotive experience and it is doubtful that he can quickly turn around the struggling startup. Reports have the company reducing staffing by half to save more money and to keep the company afloat until production is ready to begin.

Faraday Future

Seemingly the grandfather of EV startups, Faraday Future was founded in 2014. Early on, the company was viewed as a primary competitor for Tesla, even luring legacy automakers including Fiat-Chrysler and Geely as potential partners. Over the years, Faraday Future has demonstrated a number of running prototypes, such as the low-slung 2016 FFZero1 coupe and the FF91 crossover, the latter of which has been the production intent demonstrator. In the first year, the company claimed as many as 1,000 employees. A number of investors have been linked to the company, including Evergrande Health (later to launch its own EV brand), The9 (a Chinese video game company) and a range of venture capital groups. 

Despite all of the money funneled into the company, Faraday Future’s payroll was draining its coffers and the money was running out by 2018. Initial plans included building a greenfield plant in North Las Vegas, Nevada. By 2018, the plans for the new US$1 billion plant had been abandoned and the property was sold at a substantial loss. An additional plant in China was planned and quietly disappeared. To stem the bleeding further, the startup sold its Los Angeles headquarters and moved to a former Pirelli tire factory in Hanford, California. Layoffs continued. During these years of turmoil, a significant number of executives left the startup. Founder Nick Sampson resigned in 2018 followed by Senior Vice President Peter Savagian. CEO Jia Yueting stepped down in 2019 and was replaced by former BMW/Byton executive Carsten Breitfeld, who resigned in 2022. Two board members were pushed out in late 2022, accused of attempting to drag the company into bankruptcy.

Originally planned to launch an initial public offering (IPO), the company decided to join the stock market through a reverse merger with a special-purpose acquisition company (SPAC) known as Property Solutions Acquisition Corporation. The launch of the public listing on NASDAQ under the symbol FFIE valued the company at US$3.4 billion and raised about US$1 billion. Troubles followed the new public venture as the US Securities and Exchange Commission launched multiple investigations into the finances of Faraday Future in early 2022. Peaking at a stock price of US$16.54, FFIE fell below US$1 in September 2022 where it has remained, hitting as low as US$0.30 per share. With billions of dollars invested, market capitalisation of the company remains below US$400 million.

Production of the FF91 was originally planned for 2018. Cost-cutting delayed the introduction of the final production version many times, which, in turn, pushed back the job one date by years. After years of promises, the production version of the FF91 was demonstrated in early 2022. With a production capacity of 10,000 units per year, output was announced to start before the end of March 2023 with first deliveries in April.


Following Canoo over the past two years could be described as a roller coaster ride, but it’s more like a sled ride with only modest upticks along the way as its stock price careened from US$17 in early 2021 to about US$1 in February 2023. Today, the company’s market cap is under US$400 million. Originally founded as Evelozcity in 2017, the company changed its name to Canoo in 2019 and merged with an SPAC in late 2020. Trading on the NASDAQ under the symbol GOEV, Canoo was valued at US$2.4 billion. 

With its uniquely styled products, Canoo targeted commercial and ride-sharing applications. Its van, eventually named the Lifestyle Vehicle, is 4.4 meters long with a windshield stretching almost to the leading edge of the vehicle to maximise interior space. An entry-level two-seat cargo version (Lifestyle Delivery Vehicle, or LDV) is offered for about US$35,000 (£28,800) while versions with more seats push the price to US$50,000 (£41,100).

Based on a very flexible design, a pickup version has also been shown as a later addition to the lineup. A number of personnel changes, failed partnerships and questions about financing have plagued the company from the beginning. 

Former Opel executive Karl-Thomas Neumann, hired to help lead the company, exited Canoo in 2019 and co-founder Stefan Krause left in 2020. Hyundai announced in 2020 that it would work with Canoo as part of its electrification plan but this cooperative effort was abandoned in early 2021. Also in 2021, the US Securities and Exchange Commission started an investigation into the SPAC merger and questions from investors about sudden changes in the company’s direction.

New leadership moved the company to Arkansas and promised a new production facility in the region. Facilities in Bentonville, Arkansas; Pryor, Oklahoma; and Oklahoma City, Oklahoma have been announced, as late as November 2022, with production planned to begin in 2023. To spur faith in the startup, Canoo signed agreements with fleet leasing companies promising orders for thousands of LDVs.

Continued financial issues put the company at risk in the short term. To raise additional funding in February 2022, Canoo offered 50,000,000 shares at a discounted rate, leading to a further decline in the value of the stock. The company reported losses of more than US$400 million in the first three quarters of 2022, including nearly US$118 million in the third quarter alone. The same quarterly report showed cash at the end of September 2022 limited to just US$6.8 million.


Entrepreneur Pham Nhat Vuong started building his fortune when he founded Vingroup in 1993. A quarter-century after branching the conglomerate into food, entertainment and healthcare markets in Ukraine and Vietnam, Vuong decided to enter the automotive industry through the Vinfast subsidiary. The new venture purchased an old General Motors plant and worked with BMW to introduce its first, ICE vehicles. Vinfast’s GM-based Fadil sub-compact quickly topped the Vietnamese sales charts in 2021, but the company shifted its focus to electric vehicles.

While the ICE-powered models were competitive in Vietnam, exporting them posed a problem largely because of their connections to GM and BMW. Developing electric vehicles from the ground up would allow Vinfast to export products and target big markets like Europe and the US. A full range of electric models was announced in 2019 and exports were scheduled to begin in late 2021. Although the timeline shifted, vehicles went on sale in the home market and were introduced to export markets in 2022. At the end of 2022, the first batch of nearly 1,000 Vinfast SUVs arrived at the port in California.

The speed at which Vinfast was moving was truly impressive. The multi-billion-dollar Vingroup financed the early stages and public offerings in Singapore added to the bank account. To reduce shipping costs and make the vehicles more appealing, a US$2 billion greenfield plant in North Carolina was announced with production capacity of 150,000 vehicles annually. With stores opening in California, Vinfast began laying the groundwork for US sales in early 2023. However, the VF8 and VF9 EVs were not ready for customer delivery.

Early word on the stateside vehicles puts doubt on their competitiveness. The US$50,000 (£41,100) Vinfast VF8 mid-sized crossover was promised to feature a range of 250 to 290 miles, depending on the battery pack, but the first batch of vehicles were said to have 30% less range. Blaming outsourced software, Vinfast was working on an update before the vehicles arrived at the port.

Other components posed safety or reliability issues and needed to be redesigned or replaced. On top of everything else, the competitive nature of the electric vehicle market caused the prices of various models already on sale to fall by thousands of dollars before the VF8s and VF9s could be unloaded.

Through February, the North American operations have been consolidated. Originally separate, the Canadian and US sales groups were combined into one group and redundant positions eliminated. Additional jobs have been cut as the group continues to reduce costs in North America and around the world.

The larger Vingroup is navigating financial problems. Vingroup ended 2022 with a 19% drop in revenues, but showed a modest profit of US$84 million (£69.1m), up from the previous year’s loss of US$320 million (£263.3m). Getting Vinfast up and running and successful is necessary to return the investment from Vingroup and stabilise the conglomerate. Some 7,500 potential workers in North Carolina are also counting on Vinfast to be successful.

Afeela (Sony-Honda)

Initially an electronics store in Tokyo, Sony subsequently branched out into a wide range of products and services, including electronics, cameras, computers, gaming consoles and entertainment. As part of its lithium ion battery operation and its investment in robotics firm ZMP, Sony demonstrated a practical electric vehicle at CES Las Vegas in January 2020. In 2022, Sony Mobility was created as a separate division designated to develop electric vehicles.

Sony joined forces with Honda as Sony Honda Mobility to develop and market batteries, vehicles and mobility services. Demonstrating their concept, Sony introduced the Vision-S Prototype to showcase various technologies, including AI, 5G and cloud technologies developed within the Sony family of companies. The initial static prototype was further developed along with input from Magna Steyr of Austria into a fully operational vehicle. Evolving into a crossover, the Vision-S 02 Prototype was displayed at the 2022 CES event.

After plans for a production plant in Europe collapsed, joint-venture partner Honda emerged as the assembler, starting in 2025. A late bloomer in this area, Honda currently has three independent projects for electric vehicles, adding a joint venture with General Motors to its in-house development and Afeela. The market is crowding and lesser players are dropping out quickly. Honda and General Motors, independently, need to find success as the demand for electric vehicles rises around the world.

New entrants like Sony will find it tough to establish an unknown brand, despite decades of making quality products in other fields. The Afeela brand can enter markets without the cost of a dealer network, as long as it can remain independent of its Honda co-parent. This “pro” column is strong but may not be enough to provide success against established players, especially since one of the more established competitors is Honda itself.


Founded in 2014 by Robert Bollinger, the company showed its first prototype in 2017. The company’s initial concepts included the B1 SUV and B2 pickup, with their extremely utilitarian and boxy designs. Appealing to off-roaders, the B1 and B2 hinted at early Land Rover styling but harnessed the all-EV platform with a cargo pass-through from nose to tail. The company earned a patent for its novel modular battery design for the trucks. Pricing was estimated to start around US$125,000 and production was initially scheduled to begin in late 2021.

CEO Bollinger rolled out the early prototypes regularly as he sought to raise investment money. Bollinger reportedly turned down special purpose acquisition companies (SPACs) who had intended to take the company public. The company’s relatively low budget places it among the weakest start-ups financially.

In January 2022, the company postponed the development of the consumer B1 and B2 trucks in favor of commercial and fleet vehicles. Eight months later, Mullen Automotive, another EV startup, purchased a 60% controlling interest in Bollinger for US$148.2 million. Combining the two EV makers allows the venture to cover Class 1 through 6 commercial vehicles. This was followed by Our Next Energy (ONE), a battery manufacturer based in Novi, Michigan, signing up to supply LFP batteries to Bollinger vehicles, with plans to begin providing the battery packs from its Michigan plant starting in late 2023.

Mullen, itself, has made various presentations of its planned products. It originally announced US production of the Chinese Qiantu K50 sports coupe, but plans evolved into the MX-05 crossover, later renamed the Mullen Five. After purchasing the remnants of the bankrupt Electric Last Mile Solutions (ELMS), Mullen acquired the former AM General plant in Mishawaka, Indiana, along with ELMS’s Chinese-designed electric vans. Mullen also announced its intention to offer the tiny Mullen i-Go, based on the Dongfeng Hongrui Xiaohu minicar, for less than US$12,000. With facilities in Mississippi and Indiana, Mullen continues to tout its grand plans, including an updated version of the Qiantu K50, with little concrete proof of movement.

Destined to target any company planning an electric vehicle, Bollinger introduced the bare Chassis-E, offered in rear-wheel-drive, dual-motor rear-wheel-drive, and all-wheel-drive variations. As a bare chassis, the Chassis-E was expected by Bollinger to be the basis for “delivery vans, bucket trucks, ambulances, rescue trucks, shuttle buses, reconnaissance vehicles and more”.

In a move to appeal to a wider market, the company announced its intention to produce an electric van. The Deliver-E is planned to cover Class 2, 3, 4 and 5 markets. Based on a front-wheel-drive platform, the Deliver-E is expected to be offered in a range of wheelbases and power outputs from 70kWh to 210kWh. This was followed by the B4, a Class 4 truck and expected to be the first production Bollinger model, with production initially planned to begin in 2022. In January 2022, the company announced that it was “postponing” the development of the B1 and B2 and “shifting our focus to commercial trucks and fleets”. Based in Livonia, Michigan, Roush Industries was named as the “contract manufacturer” for Bollinger’s platform and chassis cabs. The future of Bollinger continues to darken.


As the global automotive industry makes the transition from over a century of internal combustion engines to electricity, more than just vehicle manufacturers need to prepare. The Kingdom of Saudi Arabia saw the need to branch out beyond its petroleum-centred economy and established a national directive toward economic diversification called Saudi Vision 2030. One initiative was to target manufacturing, specifically production of electric vehicles. This would include encouraging foreign automakers to set up factories in Saudi Arabia and establishing a local car company.

Publicly announced in November 2022, Ceer is advertised as “the first Saudi electric vehicle brand”. Ceer is targeting the Middle East and North Africa (MENA) with the new lineup of sedans and sport utilities. Expectations for the company include foreign investment of more than US$150 million and the creation of up to 30,000 local direct and indirect jobs.

Ceer hired experienced personnel to set up the new company’s structure. Starting at the top, Jim DeLuca brought nearly four decades of experience from General Motors to be the company’s first CEO. Robert Melville, with experience at McLaren and General Motors, was selected as Ceer’s Chief Design Officer. Formerly with Hitachi Astemo, Vinfast and General Motors, Mitch Thomas was designated as the Chief Quality Officer.

With such little time to develop a game plan, there is obviously very little concrete information  on the direction of Ceer. There has been no product announcement, yet. An agreement has been reached between Ceer and BMW to supply component technology for the new vehicles. Key to the establishment of the new company, Ceer vehicles are planned to be designed and produced in Saudi Arabia, with production scheduled to begin in 2025.

The expense of launching a new vehicle manufacturer requires access to huge sums of cash. In the company’s favor, Ceer is financed by the Public Investment Fund (PIF) of Saudi Arabia, which was established half a century ago and, more recently, was given the authority to provide funding for public or private projects. Among its projects, PIF has invested in LIV Golf professional sports organisation, video game manufacturer Nintendo, Uber, Twitter, Saudi Aramco, Boeing, Berkshire Hathaway and luxury resort company Qiddiya. American EV startup Lucid is majority-owned by PIF and plans to expand its manufacturing footprint to Saudi Arabia. The value of PIF’s holdings is estimated to be in excess of US$600 billion.

On the production side, Taiwan-based Hon Hai Precision Industry, otherwise known as Foxconn, is part of the project. Foxconn brings decades of experience in manufacturing and its own recent directive to enter the automotive production. Ceer has many points in the “pro” column. However, alignment with PIF comes with baggage. The investment fund has been criticised for its lack of transparency. Head of PIF Mohammed bin Salman Al Saud is also the Crown Prince and Prime Minister of Saudi Arabia and is a controversial figure on his own. Ceer’s focus on Middle Eastern and northern Africa markets is in its favor, but expansion beyond that region could be difficult for political reasons.


Founded in 2007, AMP Electric Vehicles developed a number of electric models based on production ICE vehicles, including the Saturn Sky roadster, Chevrolet Equinox CUV, Jeep Grand Cherokee SUV and Mercedes-Benz M-Class SUV. The company went public in 2010. Beginning in 2012, AMP supplied electric trucks to Navistar. In 2015, AMP acquired truck body and chassis producer Workhorse Custom Chassis and began production of Class 3-6 trucks. The company changed its name to the Workhorse Group that same year.

Workhorse acquired the Lordstown (Ohio) plant from General Motors in 2019 for just US$20 million. With a claimed capacity of 500,000 units annually, the plant was shuttered by GM earlier that year. The 576,000 square meter (6.2 million square feet) facility was planned to retain a number of employees and their UAW union representation. Workhorse created the Lordstown Motors Corporation (LMC) to produce electric light trucks at the plant. Workhorse holds 10% of LMC and licenses its technology to the company.

Derived from the Workhorse W-15 prototype, the first LMC truck was initially planned to enter production in late 2020. All-wheel-drive power for the pickup, dubbed the Endurance, comes from four Elaphe hub motors energised by LG Chem 2170 cylindrical cells.Focusing on commercial buyers, Lordstown said it had pre-orders for 100,000 units by early 2021. The Endurance, it was announced, would be followed by a recreational vehicle in 2022 with an electric van around the same time. The first run of pickup prototypes started in early 2021.

Production was initially expected to begin before the end of 2020, but the timing was delayed to September 2021. In May 2021, Lordstown announced it was pulling back its first-year production target to just 1,000 units, 50% of its earlier outlook. Blaming the COVID pandemic, the automaker stated its costs were higher than expected and new investment was required. Production officially began September 29, 2022, with planned first-year production of 50 units. The first 500 units are scheduled to be completed by mid-2023, “subject to raising sufficient capital”.

Following the prevailing trend among EV makers, Lordstown announced in August 2020 that it would complete a reverse takeover with DiamondPeak Holdings. With its listing on the NASDAQ exchange, the Lordstown stock rose to an equity value estimated at US$1.6 billion.

General Motors lent LMC US$40 million in December 2019 for development of its first production model. In January 2020, LMC applied for a US$200 million Advanced Technology Vehicles Manufacturing Loan from the US Department of Energy. The company expects the loan, still in the approval process a year later, to allow Lordstown to pull ahead the timing of future products. With the need to raise more than US$300 million to launch production, LMC sought more investment. The company employed investment bank Brown Gibbons Lang & Co to recruit more investors.

By January 2021, the company claimed 350 employees on its way to a target of a 400-person workforce by job one, but issues quickly arose. A March 2021 report from Hindenburg Research was critical of Lordstown, stating that the company “misled investors on both its demand and production capabilities”. Delayed tax payments in April added fuel to the argument that Lordstown was not as stable as it proclaimed to be.

In June 2021 SEC filings, the company reported its finances were not adequate to survive another 12 months without additional investment. After previously announcing that it had secured orders covering two years’ worth of production, Lordstown recanted and explained it had no confirmed orders for its Endurance pickup in public statements in mid-June 2021. Under this cloud, CEO Steve Burns, still under investigation for sales of his shares, and CFO Julio Rodriguez resigned. Becky Roof was named interim CFO and former Icahn Enterprises CEO Daniel Ninivaggi was selected to head Lordstown. Ninivaggi was replaced by Edward Hightower, with three decades of automotive experience, a year later.

YA II PN Ltd, a hedge fund, signed an agreement with Lordstown in late July 2021 to purchase up to US$400 million in stock over the next three years. In May 2022, the company sold its plant to Taiwan-based consumer products manufacturer Foxconn. The acquisition provided US$230 million for Lordstown along with an additional investment of US$100 million from Foxconn.

Despite the cash infusions, financial issues continue. In 2022, the company’s cash holdings were halved, ending the year with just over US$121 million. In the final quarter of 2022, Lordstown lost US$102 million. Immediately accessing additional funding is a priority to keep the company in business.


Based in China, Xpeng, a shortened variation of founder He Xiaopeng’s name, was developed as a rival to Tesla from the beginning. Founded in 2014, Xpeng actually has vehicles in customers’ hands and in relatively large numbers, unlike many of its startup rivals.

In China, a license is needed before a company can build vehicles and this required Xpeng to look for an existing licensee. Production of the company’s first model, the G3 compact crossover, started to trickle out of the FAW Haima plant in Zhengzhou in late 2017, with volume production starting a year later. In March 2020, Xpeng acquired truck maker Guangdong Foday Auto, giving the company the production license needed to legally build its own vehicles. Foday operates an assembly plant in Foshan, Guangdong province, with capacity for 150,000 vehicles annually. In August 2021, the company broke ground for a new plant in Wuhan. With investment of RMB30 billion (US$4.6 billion), the million square meter plant will have a planned annual capacity of 100,000 units.

Introduced at the 2019 Shanghai auto show, the P7 is a four-door coupe with Level 3 autonomous capability. Two motors will provide all-wheel drive. On the NEDC tests, the P7 is expected to have a 600km (373-mile) range and it is about the same size as the Tesla Model S. After local subsidies, the P7 is almost identically priced to the smaller Tesla Model 3, after its most recent price cut. Xpeng’s Model 3 rival, the P5, hit the market in late 2021 followed by the G9 crossover in March 2022.

Technology has been a strong part of Xpeng’s focus. The company plans on reaching full Level 5 autonomy by 2025, with updates to its XPILOT ADAS system introduced in October 2020 (version 2.5), early 2021 (version 3.0), May 2022 (version 3.5) and 2023 (version 4.0). This was the first lidar-based system offered in a production vehicle and is key to reaching the company’s goals.

With investors such as Alibaba, Foxconn and UCAR, Xpeng had a good start. Later rounds  of investment pulled in billions of dollars more on the way to an IPO on the New York Stock Exchange in August 2020, which raised another US$1.5 billion. Enthusiasm for the company at its launch pushed the stock price from $15/share to US$21/share, valuing the company  at US$11.8 billion. This enthusiasm raised the company’s value to almost US$52 billion in November 2022. The luster has since worn a bit and the stock price dropped to below US$7 in November 2022.

Xpeng production grew from 21,547 units in 2020 to 98,459 in 2021 and over 130,000 in 2022. While strong, this pales in comparison to where the company planned to be at this point. Expectations for 2022 had the company producing about double the actual number of vehicles it built. In the last quarter of 2022, the company reported a net loss of more than US$340 million, about 10% worse than expected. A reevaluation of the company’s plans is under way and a corporate recovery is expected later this year.

In the meantime, the competitive landscape has been changing, with its main competitors lowering their pricing. Cost-cutting within the company and updates to its core products are happening now. The stock market sees the company’s technology as its core products, rather than its vehicles, which has kept the stock prices from falling too far. After the price of the stock cratered in November, it recovered 38% by mid-March 2023.

The outlook is still a bit cloudy. For a clearer view, Xpeng needs to find solid footing with its revised plans. A retreat from actual vehicle production is a possibility. However, that would require marketing its technology to outside companies. Research on autonomous vehicles, while still progressing, has slowed over the past year as researchers continue to seek out the next technological leap forward. Until that breakthrough is found, demand for Xpeng’s technology may be soft, hurting the company’s chances of near- term success.


Launched in October 2021, Zeekr isn’t an independent startup but a spin-off of China-based Geely. Harnessing the platforms developed for Lynk & Co and Volvo models, Zeekr is targeting Tesla with its range of electric models. The first model out of the Cixi plant in the province of Zhejiang was the Zeekr 001. At nearly five meters in length, the 001 is a sleek shooting brake that looks more than a little like the Porsche Panamera Sport Turismo. In standard rear-wheel-drive form, the 001 starts at RMB299,000 (US$43,000), with a dual-motor all-wheel drive system optional. The two motors in the all-wheel-drive version produce 400kW of power and can launch the car to 100km/h (62mph) in about 3.8 seconds. In rear-wheel-drive form, the car has a driving range of up to 700km (435 miles), according to Zeekr, and a planned long-range version sporting a CATL Qilin battery may stretch that range to 1,000km (621 miles). More models have been announced, including the Zeekr 009 minivan and Zeekr X compact crossover concept, which will arrive shortly as the 4.2-meter Zeekr 003.

Production last year, the brand’s first full year, totaled 74,338 units, an impressive start. More models are on the way and Zeekr is targeting 150,000 units this year. Achieving real success for Zeekr means sales outside of China.

In addition to taking on Tesla in its home market, Zeekr has been developed as an export model. Geely, along with many of the larger automakers in China, has long planned to sell vehicles in Europe and North America outside of its Volvo division. Production of the Lynk & Co models will begin in South Korea and the US in the next two years in order to avoid the import tariffs in the US, but no announced production plans outside of Geely plants in China have appeared, yet. The launch of European sales is planned for 2024.

Raising money outside of its parent company, Series A funding raised US$750 million in late 2022 with investments coming from a number of state-owned Chinese funds, battery maker CATL and the founder of Mobileye. Zeekr filed for an IPO in the US in December 2022. The initial valuation for the company is expected to be between US$9 billion and US$13 billion.

Although Zeekr’s backing from Geely should provide a better chance of success over any random EV startup, success itself is far from guaranteed. Quite a few spin-off brands from Chinese manufacturers, many designed to target export markets, have quietly died, and the same could happen to Zeekr.

Sam Fiorani

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