Tesla is not the only start-up disrupting the car business

The Byton M-Byte all-electric SUV (above) at this year's CES in Las Vegas, Nevada.
The Byton M-Byte all-electric SUV (above) at this year's CES in Las Vegas, Nevada. PHOTOS: NIOGLOBAL/ INSTAGRAM, PIECHAUTOMOTIVE/ INSTAGRAM, REUTERS
NIO ES6 electric SUV.
NIO ES6 electric SUV.PHOTOS: NIOGLOBAL/ INSTAGRAM, PIECHAUTOMOTIVE/ INSTAGRAM, REUTERS
Piech Mark Zero.
Piech Mark Zero.PHOTOS: NIOGLOBAL/ INSTAGRAM, PIECHAUTOMOTIVE/ INSTAGRAM, REUTERS
The Rivian R1T all-electric truck (above).
The Rivian R1T all-electric truck (above).PHOTOS: NIOGLOBAL/ INSTAGRAM, PIECHAUTOMOTIVE/ INSTAGRAM, REUTERS

FRANKFURT • For most of the last century, the car industry has been known more for shutdowns than start-ups.

Brands such as Saab, Pontiac and Plymouth disappeared and not many took their places. But the advent of electric cars has provided a rare opportunity for new companies to challenge the automotive establishment.

Tesla has shown that it is possible. Founded in 2003, the company is putting a scare into the likes of BMW and Mercedes by outselling some of their most popular models.

A new crop of upstarts, mainly based in California and China, is trying to follow Tesla's lead and take advantage of traditional car companies' slowness to develop battery-powered vehicles.

The hurdles for these new car companies are lower than they have been in decades. Electric cars are easier to design and build than cars with internal combustion engines because they have fewer moving parts.

Still, building any car is hard and expensive. No doubt some of the start-ups listed here will not make it. Some have already dropped out.

Dyson, best known for vacuum cleaners, abandoned its electric car dreams in October. "We simply cannot make it commercially viable," Dyson said at the time.

But some start-ups may have an impact, especially those with a new approach to design, a technological advantage or a deep-pocketed backer like the Chinese government. Here is a look at some of the new challengers.


BYTON

China is trying to use the transition to electric vehicles to become a major automobile exporter, as a matter of government policy.

One beneficiary is Byton, which plans to begin volume production of an electric sport utility vehicle (SUV) at a factory in Nanjing next year. The cars will go on sale in the United States and Europe by the end of next year.

"The government sees electric vehicles as a chance to play at a global level," said Mr Daniel Kirchert, a former BMW executive who founded Byton with financial help from the government. "We are not a state-planned company, but really a start-up."

Byton aims to be the most digital car on the road. The interior features a screen for every passenger and also a screen embedded in the steering wheel. With a starting price of around €45,000 (S$71,000) before taxes, Byton will cost a little more than an entry-level Tesla Model 3.

"We want to create a smart device on wheels," Mr Kirchert said.

CANOO

The California start-up said it would offer electric vehicles next year by subscription. Customers will pay a monthly price similar to a lease, but with no fixed time commitment.

The strategy helps address one of the obstacles to selling electric cars: the price, which is usually higher than a comparable gasoline vehicle.

Canoo, led by Mr Ulrich Kranz, who managed development of the BMW i3 electric car, has unveiled a pod-like prototype it described as an "urban loft on wheels".

Canoo plans to begin offering subscriptions in Los Angeles next year and gradually expand the service to other major cities in the US.

Last month, it announced a deal with Hyundai to jointly develop an electric car platform - the chassis, electric motors, batteries and other components that sit below the car body.

FARADAY FUTURE

The Los Angeles-based company plans to begin selling a luxury vehicle called the FF 91 by the year-end with a sticker price of well more than US$100,000 (S$141,000).

Amenities will include lots of screens and reclining rear seats that, the company said, use National Aeronautics and Space Administration technology to distribute the passenger's weight evenly.

The car "is meant to be a niche player in the luxury segment", spokesman John Schilling said in an e-mail.

LUCID

Backed by US$1 billion from the Saudi Arabian public investment fund, Lucid is building a factory in Arizona to produce the Lucid Air, a luxury car the company said would go on sale before year-end.

The car is designed to exploit the space that becomes available when there is no longer a need for bulky internal combustion engines and transmissions.

"We have a car which is very spacious on the inside and relatively compact on the outside," Mr Peter Rawlinson, a Tesla veteran who is Lucid's chief executive, said in an interview last year.

Early models will sell for north of US$100,000, but Lucid hopes to eventually offer more affordable cars.

NIO

Based in Shanghai, this is one of the few new electric car companies that are already building and selling cars.

Founded by billionaire William Li, Nio has four models in production, including the ES6 (right), an electric SUV that sells in China for 358,000 yuan (S$72,000).

Nio is also listed on the New York Stock Exchange and has sold more than 30,000 vehicles in China since it began volume production in June 2018. But it appears to be a long way from profitability, reporting a loss of US$353 million in the third quarter of last year, more than sales during the same period.

Deliveries this year have been hit by the coronavirus outbreak, which has depressed sales for all carmakers. Nio shares have dropped about 60 per cent since last year.

It is considering selling its cars outside China, but has not made firm plans, a spokesman said.

PIECH

The transition to electric cars got a boost from the Volkswagen emissions scandal, which called attention to the pollution caused by internal combustion engines.

So it is only fitting that the founder of one start-up is Mr Anton Piech, known as Toni, son of Ferdinand Piech, former chairman of Volkswagen sometimes blamed for creating the corporate culture that bred the scandal. The elder Piech, who died last year, was not known as a fan of electric cars, but was known for pushing technical boundaries.

The car that bears the family name does that. The Piech Mark Zero (above), scheduled to go on sale in 2022, will zip from 0kmh to about 100kmh in 3.2 seconds, travel about 482km on a charge and recharge in less than five minutes, the company said.

RIVIAN

With backing from the likes of Amazon and Ford Motor, Rivian has some of the most solid financing of any of the electric car start-ups. This gives it credibility, crucial for an untested start-up.

Rivian is accepting US$1,000 deposits on electric pick-ups and SUVs that it plans to begin delivering from a factory in Illinois, before year-end. Ford also plans to use Rivian's platform for some of its own electric vehicles, including a pick-up.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on March 14, 2020, with the headline 'Tesla is not the only start-up disrupting the car business'. Subscribe