EV disruptors hit industry speed bumps that have plagued legacy automakers for years

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In many cases, they are partnering with larger, deep-pocketed companies to aid their survival and provide access to funds.

DETROIT: Electric vehicle startups that promised to disrupt the automotive industry by using a software- and technology-heavy approach are now scrambling to cut costs amid the type of industry slowdown that has bedeviled Detroit automakers over the years.

Even as overall new-vehicle sales have slumped during the Covid-19 pandemic, EV demand remains strong. Global sales of battery electric and plug-in hybrid electric vehicles nearly doubled last year to 6.6 million, according to the International Energy Agency. "One billion dollars doesn't last very long in the auto business. That's a redesign for a Malibu or something," Cox Automotive executive analyst Michelle Krebs said.Partnerships or long-term contracts with financially strong companies are one lifeline for EV startups.

Rivian chief executive R.J. Scaringe told employees on Tuesday that job cuts were coming in order for the company"to stay ahead of the changing economic landscape." "With the success of Tesla, it's easy to forget that was a story that was 20 years in the making and along the way there were many points where they stared death in the face."

 

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