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Automakers in the first quarter of this year reported their auto sales and it turns out that pricing is a critical factor when it comes to selling electric vehicles (EVs). This may not come as a surprise, but a recent survey conducted by Edmunds highlights a significant gap between consumer demand and the availability of affordable EVs in the market.
According to the survey, 47% of respondents stated that they were looking for an EV priced below $40,000, with 22% specifically interested in EVs under the $30,000 threshold. However, there are currently no new EVs available below $30,000, and only four models below the $40,000 mark. In contrast, the average price of an EV in 2023 was $61,702, compared to the average price of all other vehicles at $47,450.
This disparity between consumer demand and market availability is putting pressure on automakers to lower prices in order to move inventory. As a result, companies like Ford have been forced to delay future EV launches and allocate more resources towards hybrid vehicles. Even Tesla, a prominent player in the EV market, experienced a decline in deliveries by 20% in Q1 2023, falling short of analysts’ expectations. Additionally, other EV startups like Rivian also faced lackluster results.
So, what is the solution to this pricing mismatch? Tesla seems to have a twofold approach. Firstly, the company is slashing prices again to make its EVs more accessible to a wider consumer base. Secondly, Tesla is aiming to capture additional revenue through sales of its Full Self-Driving software, which costs $12,000 and is currently being offered as a free one-month trial to all customers.
Now, let’s move on to other notable news in the mobility space.
In a recent development, a little bird tipped us off about the closure of Ghost Autonomy, a company that had raised more than $220 million and had recently partnered with OpenAI. After verifying the information through calls, emails, and the company’s website, it was confirmed that around 100 people were affected by the closure. Ghost Autonomy had gone through multiple pivots since its inception in 2017 and was working on developing products for highway driving and last-mile delivery in urban environments. However, the company faced financial challenges and couldn’t bring its products to market.
On the funding front, a new fund has closed that could be of interest to startup founders. Maniv, a VC firm based in Israel and now in NYC, has raised a $140 million fund. The firm specializes in early-stage investments in startups at the intersection of mobility, transportation, and energy. While Maniv has expanded its geographical reach and diversified its investor base, it has also shifted its focus from the broad term “mobility” to areas such as deep tech, decarbonization, and the digitization of the transportation sector. Notable investors in the fund include BNP Paribas Personal Finance, Shell’s venture arm, and Enterprise Mobility.
In other funding news, Alsym Energy, a Massachusetts-based startup developing nonflammable battery chemistry, raised $78 million in a Series C round led by General Catalyst and Tata, the Indian conglomerate. The funds will be used to further develop their nonflammable battery technology, which has the potential to enhance the safety and efficiency of energy storage systems.
French carpooling and bus ticketing company, BlaBlaCar, secured a €100 million revolving credit facility ($108 million) to support its operations and expansion plans. This funding will enable the company to continue providing its services and exploring new opportunities in the mobility space.
Moving on to autonomous vehicles, Waymo and Uber have expanded their ongoing partnership to include the delivery of Uber Eats orders using Waymo vehicles. This collaboration will initially be launched in the metro Phoenix area, with select merchants participating. Customers ordering food from these merchants through Uber Eats may have their meals delivered by a Waymo self-driving vehicle.
On the electric vehicle front, Apple has recently laid off 614 employees in California after abandoning its electric car project. Most of the affected employees were working on buildings related to the canceled project. However, Apple’s focus has shifted to other technologies, including next-generation screens.
In an interesting twist, Canoo, an EV startup, revealed its Q4 and full-year earnings, which shed light on the company’s spending habits. It was revealed that Canoo spent double its annual revenue on CEO Tony Aquila’s private jet in 2023. This highlights the discrepancy between the company’s spending and revenue, which is a concern for its overall financial health.
In terms of developments in the EV market, Faraday Future narrowly avoided eviction from its Los Angeles headquarters. The company reached an agreement with the building owner, Rexford Industrial, to stay at the facility as long as certain conditions are met. Failure to comply with these conditions could trigger a demand for payment and possibly lead to eviction. However, if Faraday Future meets its obligations, it can continue to operate from the premises until September 2025.
The National Highway Traffic Safety Administration has opened a third investigation into Fisker’s Ocean SUV. This latest investigation is focused on issues related to the doors not opening properly. Fisker is working to resolve these concerns and ensure the safety and functionality of its vehicles.
Finally, there have been conflicting reports regarding Tesla’s plans to build a lower-cost EV priced around $25,000. Reuters initially reported that Tesla was abandoning this plan, but CEO Elon Musk vehemently denied the claims on social media. Shortly after, Musk announced that the Tesla robotaxi would be revealed on August 8, suggesting that the company is still pursuing its autonomous driving ambitions.
That’s all for this week’s update. Don’t forget to subscribe to our newsletter to stay up to date with the latest news and insights in the mobility industry. As always, if you have any tips or suggestions, feel free to reach out to us. Stay tuned for next week’s edition of the TechCrunch Mobility newsletter!
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