Skip to content

In the auto industry of the future, is there space for new EV manufacturers?

Megatrends looks at some of the start-up companies seeking to change the face of the EV segment. By Michael Nash

Despite the fact that it remains a niche segment, having enjoyed slower growth than earlier predictions has suggested, the electric vehicle (EV) segment continues to grow. In 2014, for example, sales grew 60% compared to the previous year, with similar projections estimated for 2015.

Numerous studies that have examined the outlook for the EV market over the next decade predict strong growth. A recent AlixPartners report forecasts annual growth rates between 24% and 31% until 2025, which suggests there is room in the market for numerous new model launches.

With over 50 EV models currently available to purchase worldwide, most OEMs already have future EV programmes well under way. Coupled with market dominators like Tesla, how much scope is there for smaller companies that are hoping to change the complexion of the EV segment by launching new models?

Megatrends seeks to address the automotive world of a decade from now and beyond. With that in mind, can we expect to see new EV brands on the market in ten years’ time?

Detroit Electric

With an extensive history, the Detroit Electric marque is by no means a new company. Originally founded in 1907, it saw some early success with the Detroit Electric, a buggy-style four-wheeler built by the Detroit-based Anderson Electric Car Company that ran for over 200 miles on a single charge, with a top speed of 20mph (32kph). But the company was forced to file for bankruptcy following the stock market crash of 1929.

Detroit Electric SP:01
Detroit Electric
HQ: Detroit, Michigan, USA
Product: Detroit Electric SP:01
Launch date: 2017

Fast-forward to 2008, when Albert Lam, former Chief Executive of the Lotus Engineering Group, revived the company. It was officially relaunched in March 2013, when it started work on developing a two-seat all-electric roadster – the SP.01. Lam says that preparations for the introduction of the electric sports car are gathering momentum, and expects the car to reach Europe first.

“We’re truly delighted that we’re just weeks away from bringing to fruition our plans to introduce Detroit Electric’s first pure electric sports car,” said Lam in June 2014. “While Detroit was our preferred initial assembly location, the regulatory process for the production and sale of the SP:01 in the US has taken longer then expected. That means the assembly operations have to be located in Europe to allow us to bring the vehicle to market globally in line with our timing plans,” he explained.

Faraday Future

Based in California, Faraday Future (FF) believes it “is poised to lead the entire automotive industry into the future.” The company is developing an all-new premium EV using a team of engineers who boast extensive experience in the technology and automotive industries.

Faraday Future concept
Faraday Future
HQ: Gardena, California, USA
Product: TBC. “100% electric, zero-emission, fully-connected and personalised” vehicle
Launch date: 2017

In fact, the team has a strong tie to Tesla Motors. FF was founded by Nick Sampson, who was previously Tesla’s Vice President and Chief Engineer. He is joined by Dag Reckhorn, formerly the Director of Manufacturing for Tesla’s Model S, and Porter Harris, who developed batteries at SpaceX and also worked at Lotus.

FF plans to bring a vehicle that is “100% electric, zero-emission, fully-connected and personalised in ways you’ve never even considered possible” to the market by 2017. Other details are tightly under wraps, as a spokesperson told Megatrends, “I have been instructed to hold off on furthering information about FF for the time being.”

Atieva

Atieva is another California-based start-up that is looking to take the EV segment by storm. It was also created by a former Tesla employee, namely Bernard Tse, who was Vice President and Board member from 2003 to 2007 before he left and created his start-up.

Atieva
Atieva
HQ: Menlo Park, California, USA
Product: A “breakthrough electric car”
Launch date: TBC

On its website, Atieva says it is “designing and creating a breakthrough electric car in the heart of Silicon Valley. We’re redefining what a car can be, by building an iconic new vehicle from the ground up.” It also says that its workforce is “expanding rapidly”.

The company has not indicated any plans as to when it will bring its first offering to market. Like FF, everything is hush-hush at Atieva, with a company spokesperson refusing to divulge any additional information for this article.

Lightning Car Company

Iain Sanderson is the owner of Lightning Car Company, a UK-based start-up that is hoping to bring a high performance EV to market. The Lightning GT has been on the brink of reaching production for some time. Originally, delivery was meant to start in 2012, but the launch has been pushed back, currently to 2015.

Lightning GT
Lightning Car Company
HQ: Coventry, UK
Product: Lightning GT
Launch date: 2015

Equipped with a lithium-titanate battery, the GT will have a range of over 250 miles. However, Sanderson says that the company is aiming to “offer our customers a choice of battery technology, enabling either an ultra fast charge or a longer range, but always with supercar levels of performance.”

Speaking to Megatrends, Sanderson describes the barriers facing a start-up EV company: “The biggest difficulty is getting funding. The UK is a daughter economy for car OEM ownership, mother economies being Germany, Japan, China and the US. We should have gone to one of these latter countries from the off. But blame for our delay on getting the model to market can’t be completely pinned on funding. Consumers have also had mixed messages, and the EV segment won’t take off unless opinion leaders, like politicians, are using the technology.”

nanoFlowcell

Founded in 2013, nanoFlowcell AG is a research company that has developed a powertrain architecture by using quantum chemistry and molecular engineering. The company’s Quant F and Quantino models made their debut at the 2015 Geneva Motor Show.

Quant F
nanoFlowcell
HQ: Liechtenstein
Product: Quant E, Quant F, Quantino
Launch date: Quant E – 2015; Quant F – 2016; Quantino – TBC

Both models have followed a prototype called the Quant e-Sportlimousine – the company’s first offering that marked a “quantum leap in the development of electric mobility.” According to the company, its nanoFlowcell battery enabled a range of 600km (373 miles).

What’s next for the company? “One of the main tasks for nanoFlowcell AG in the coming weeks and months will be to identify suitable partners from various fields for whom deployment of the nanoFlowcell is a feasible proposition,” says Jens Ellermann, President of the Board of Directors, nanoFlowcell.. “Initial discussions have already taken place in this respect. Along with the automotive sector, areas such as aerospace, transportation and terrestrial applications are also predestined for the use of flow cell technology. Corresponding research projects have already been initiated by nanoFlowcell AG and are progressing well.”

High expectations

Speaking to Megatrends, Cosmin Laslau, Senior Analyst at Lux Research, detailed the environment into which these companies will enter when they decide the time is right.

“We’re seeing some important strides being made for model choice and desirability: consumers will soon have multiple SUVs to choose from with plug-in drivetrains, which is great because of how popular this class of vehicle is. And by the end of the decade all major German OEMs will offer their cars with plug-in options,” he observes.

Laslau notes Tesla as a key player in the EV market, and one that is currently dominant as an EV-exclusive company. However, he believes that with tesla at the upper end of the market. Among the OEMs that could compete with Tesla is GM, which “is doing good work by pursuing micro-hybrids, hybrids, plug-in hybrids, and pure electric vehicles, in addition to fuel cell research. This all-of-the-above approach is important to cover a majority of buyers.”
With the advances in EV products being made by Tesla, GM, Nissan, BMW and other established OEMs, is there room in the market of the future for small start-up EV companies? Laslau believes not, and lists several reasons why Tesla may have been the last EV start-up to enjoy success: first, the ability to fund a business using a personal fortune, and tap into a network of peers for additional funding. Second, timing: “Tesla started at a unique time when other OEMs were desperately looking to accelerate their own EV technology, hence both Daimler and Toyota investing in Tesla in return for EV battery pack supply deals. OEMs have largely moved on since then, and do their own EV work in-house now.”

Finally, there is the added factor government support; Laslau thinks that the government loan of US$465m that was available to EV start-ups in the US “is unlikely to be repeated.” In April 2010, Tesla Motors received approval for about US$465m in low-interest loans from the US Department of Energy’s Advanced Technology Vehicle Manufacturing Program.

Niche inside the niche

If companies like Atieva, Faraday Future and Detroit Electric are to see success, Laslau thinks they must fill gaps in the EV market that are not already occupied: “They must focus on niches. The last thing the industry needs now is another US$30,000 EV hatchback with limited driving range, or another US$80,000 luxury plug-in sedan. Those particular markets have been oversaturated. Niches such as sports cars, or untapped larger markets such as pickup trucks, offer interesting opportunities.

However, even if they do fill niches, Laslau does not believe the companies will do anything revolutionary. This is due to the fact that “the only real possible differentiator between EV makers is their battery – how much it costs, how much it weighs, how much space it takes up.” The probability of small start-ups having access to better, next-generation batteries than companies like Tesla is very slim.

Nevertheless, small EV start-ups “will continue to pop up,” he continues. “Most will fail, and EVs will slowly push on, thanks to larger incumbent OEMs. There is no going back from plug-in vehicle technology now. The only question is, how many decades will it take to go from 1% market penetration to 10%, 50% or more?”

Michael Nash

This article appeared in the Q3 2015 issue of Automotive Megatrends Magazine. Follow this link to download the full issue.

Welcome back , to continue browsing the site, please click here