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Lucid, Rivian and others may perhaps perhaps well aloof explore distribution provides with established manufacturers

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As soon as a startup begins manufacturing, a peculiar and even seemingly extra complex maze lies forward: distribution, marketing and the timely provision of system and carrier.

January 03, 2023 11:53 AM

Reporter covering technology, engineering and Jaguar Land Rover for Automotive news

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A Lucid Air Gargantuan Touring at the EV maker’s showroom in New York on Aug. 8, 2022.

The toughest hurdles for as of late’s EV startups to conquer, I once notion, were designing, engineering, checking out, validating and manufacturing to world-class standards an all-unusual automobile.

I would want been unfriendly.

Turns out that once firms comparable to Rivian, Lucid and Lordstown cleared those boundaries, a peculiar and even seemingly extra complex maze lay forward: distribution, marketing and the provision of timely system and carrier. For tiny firms, those key operations add rather a few expense and head depend at a time when earnings would not quilt costs.

Tesla CEO Elon Musk bloviated on social media in December that rival Lucid is headed for extinction. He has made identical self-serving remarks about Rivian. While it is in downhearted taste to publicly disparage competitors, Musk knows how complex it is to birth a automobile firm that can determined create, manufacturing and marketing roadblocks and make money. In 2021, after 18 years of losses, Tesla reported its first stout-one year earnings. Musk may perhaps perhaps well throw most famous colour at the competitors, however create no longer completely prick payment what he says.

Lucid manufactures the excessive-efficiency Air sedan. It has obtained rather a few accolades for efficiency, vogue and driving range. Change Insider reported that Lucid officers are extremely shy about repeat cancellations that have took place. In the third quarter, Lucid lost $530 million on earnings of $195 million. Hovering prices for raw provides in batteries and electric motors have affected every electric automobile maker, and the chip shortage has disrupted output.

Rivian, funded by Amazon, Ford and others, will likely be struggling. Financially strapped Lordstown Motors obtained’t procure any extra pickups previous the five hundred it plans to create by spring.

And whereas Rivian and Lucid are no longer in instantaneous hazard of working out of money, they’d perhaps well aloof reevaluate one segment of the industrial: distribution.

In Lucid’s case, there are rather a few luxurious manufacturers with distribution networks that may perhaps perhaps well offer loads to the California startup.

Lincoln’s first EV is aloof years away. Voice referring to the advantages Lincoln sellers may perhaps perhaps well win from selling the Lucid Air. They’d have an instantaneous EV competitor to Mercedes and Cadillac. Lincoln dealership technicians would fabricate experience engaged on an EV now, no longer in 2025. And Lucid customers all of a unexpected would have a nationwide community of sellers, making the possession experience a long way less stressful. Ford has shown passion in working with varied automakers. At one time, there modified into to be a Rivian-basically based fully Lincoln. Could perhaps Toyota’s Lexus division utilize an EV straight away? How about Chrysler?

If I’m Rivian CEO RJ Scaringe, I would have a study Land Rover and Volkswagen sellers for a distribution deal for the R1T pickup. Thanks to the Rooster Tax on imported trucks, neither designate is vulnerable to ever offer a pickup in the U.S. You give either of those dealer networks some model of the R1T to promote, and Rivian will likely be in a job to scale up manufacturing and lower its breakeven level a long way faster than going it by myself.

Despite the truth that Lucid and Rivian have ample funds for the shut to-timeframe, they are potentially no longer going to outlive 18 years with out making a living. Credit to Musk for pulling that off.

You would electronic mail Richard Truett at [email protected]

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