As the electric vehicle industry faces a string of high-profile failures, several startups that have surfaced in recent years have underestimated their capital needs by billions of dollars, industry insiders said.
The growing EV market has benefited from the support of governments seeking to meet climate goals, and captured the attention of Wall Street.Tesla controlled more than 50% of the EV market in the U.S. in 2023, sold more than 650,000 vehicles in the country and raked in more than $82 billion in vehicle sales worldwide.
"Compared to 10 years ago, it's more attractive now to start a car company," Wakefield said."But compared to starting a new social media app or a new consumer service or something else that just doesn't consume billions before you even start, before you even get your first dollar of revenue? It is tough. Just look at the capital returns — not the stock prices, the actual returns on capital. They're not very attractive.