The vivid and ongoing demonstration of how brutally unforgiving the car industry can be continued this month with the bankruptcy of Fisker, the latest of the Tesla-inspired new-energy start-ups to collapse following the failure of Lordstown, Byton, Nikola and Arrival UK.
In the struggling zone remain Faraday Future, Canoo, Lucid and China’s HiPhi, while questions hang over outwardly impressive but persistently unprofitable start-ups such as Rivian, Xpeng and Nio.
The catalyst for their creation was mostly down to one company: Tesla. “It’s all very simple. In 2014 Tesla shares increased tenfold and suddenly a company that sold 50,000 cars had the same market cap as BMW,” Daniel Kirchert, former CEO and co-founder of Byton told Autocar. “That was the trigger.”
Tesla unlocked investment for EVs, both privately and later on the stock market, in amounts not seen before in the automotive start-up space. However, bar the lucky few who cashed out at peak enthusiasm, hardly any will have seen a return on that investment.
Kirchert was an BMW and Infiniti China specialised automotive executive who went on to witness first hand the EV start-up whirlwind after helping form Byton, an electric-focused, Chinese-backed car maker with global aspirations.
Byton, whose M-Byte crossover memorably touted a 48in dashscreen when 10in was considered generous, was one of the first to collapse in 2020. “The timing was really bad. We hit the most capital-intensive phase right at the start of Covid. So that killed us originally,” said Kirchert at the sidelines of the Move 2024 urban mobility event.
Kirchert, now CEO of Swiss-focused, Chinese car distributor Noyo, has taken a professional interest in the trajectory of those start-ups that did survive and knows what he would do differently with Byton. “I’d do it for much less money. We believed in a truly global set-up in Silicon Valley, China and Germany,” he said. “However, it was too complex. If I would do it again I’d concentrate everything in China and then get it done for half.”
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Lucid - really? I thought they were extremely well-funded and their tech appears to be world-beating