# As Tesla Wannabes Try To Enter EV Market, Can an Electric Car Be Made Without Losing Billions? | Tech News (HT Tech) > Tesla imitators are trying to break into the EV market with a variety of manufacturing approaches. None are easy. # As Tesla Wannabes Try To Enter EV Market, Can an Electric Car Be Made Without Losing Billions? ## Tesla imitators are trying to break into the EV market with a variety of manufacturing approaches. None are easy. Sept 09 2022, 23:17 IST ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook.png) ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook-hover.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Share.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Shareclicked.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp-hover.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter-hover.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook-hover.png) ![Bookmark](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmark.png) ![Bookmarked](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmarked.png) ![EV](https://images.hindustantimes.com/tech/img/2022/09/09/1600x900/Climate-Australia-0_1662719918380_1662719918380_1662719982134_1662719982134.jpg) The hope is they’ll be able to similarly overcome the obstacles and eventually get close to Tesla’s $889 billion valuation. (AP) ![Author Photo](https://images.hindustantimes.com/tech/static/revamp/images/png/HTTech-new-circle-logo.png) ### By BLOOMBERG New electric models from Rivian Automotive Inc. and Lucid Group Inc. have won rave reviews, but you’ll have to be patient to drive one. Since commencing production one year ago, the two companies have produced only around 10,000 vehicles altogether as of June 30. Compare that with Volkswagen AG, which manufactures twice that every day. As the startups are discovering, high-volume auto manufacturing is far more difficult than securing customer orders — and it’s causing them to burn through billions of dollars of investors’ cash. Recognizing the need to be more frugal, Rivian announced a joint venture with Mercedes-Benz on Thursday to produce electric vans together in Europe; the partners aim to share costs and cut factory spending by using an existing Mercedes site. Also read click here. Rivian and Lucid’s struggles echo those of Tesla Inc. in 2017-2018 during the ramp-up of the Model 3 sedan, an experience Elon Musk later compared to eating glass. The hope is they’ll be able to similarly overcome the obstacles and eventually get close to Tesla’s $889 billion valuation. Producing cars is fraught with risk and remains a fantastic way to incinerate investor capital when things go awry. Joint ventures are one way to limit those financial risks, but it’s also worth looking at the approach of cash-constrained new entrants such as Arrival Ltd., Fisker Inc. and Polestar Automotive. They are wise to embrace other less expensive production methods, though these approaches aren’t without their own challenges. Even experienced automakers have struggled this year with inflation and parts shortages, but the financial pain has been most acute for those launching vehicles in their own plants for the first time. Lucid burned around $1.5 billion between January and June when its greenfield plant in Arizona churned out only 1,400 luxury saloons, an average of just 8 per day. It expects to produce around 6,500 cars in 2022, compared with an original target of 20,000, and blamed this meager haul on supply-chain and logistics challenges, plus the need to ensure vehicles meet quality standards. Meanwhile, Rivian was often unable to operate a single shift without interruption in the first half of the year due to component shortages. But the Amazon. com Inc.-backed company has made life harder for itself by trying to launch a pickup, SUV and commercial delivery van simultaneously. Analysts expect Rivian to lose more than $6.5 billion this year and cumulative losses to near $30 billion by 2027. Although it held around $15 billion of cash at the end of June — most of which was raised in last year’s blockbuster IPO — it’s having to cut jobs to slow the money draining from its bank account. Large plants can, of course, achieve impressive economies of scale when operating at full tilt. Tesla’s high profit margins, for example, are benefiting from its highly efficient Shanghai plant and investments in innovative large casting machines. Auto companies can also typically receive subsidies from local governments for building factories, adding to the allure of this approach. But there is a lot of potential downside. If too few cars roll off a production line, a manufacturer’s fixed costs will far exceed revenues, resulting in large losses. Inventory writedowns are also required because the cost of building vehicles far exceeds what it will recoup from the customer. Even before beginning production of its electric pick-up at a former General Motors plant, Lordstown Motors Corp. almost ran out of cash and had to be bailed out in May by Taiwan’s Foxconn Technology Group. No wonder some rivals think owning a big factory is too risky. UK electric-van producer Arrival prefers so-called “micro-factories” — smaller and much cheaper to build, its facilities forgo expensive paint shops and metal stamping. Unexpected stoppages at such a small plant don’t burn as much cash, and manufacturing on several continents is less costly. However, Arrival has had to massively scale back its once expansive production ambitions and slash 30% of the workforce to save cash. In the near term, it will focus on just one UK microfactory, producing one model on one shift. Hence, it will probably build just 20 vehicles this year instead of the up to 600 it originally forecast. Investors have balked, sending the shares down more than 95% since their 2020 peak. Another alternative is an even more asset-light approach: Instead of building cars in-house, outsource the complex work of combining thousands of auto parts to an experienced contract manufacturer. Fisker, for instance, is partnering with Magna International Inc. and Foxconn to produce its electric vehicles. It hopes to benefit from their economies of scale, while avoiding heavy spending on equipment and staffing. (Production is due to commence at Magna’s Austrian plant in November.) The downside of such arrangements is the contract manufacturer claims a slice of the profits and the auto company has less control over production. Yet of the three production methods I’ve highlighted, it’s the one most likely to reliably deliver a high volume of cars. Polestar Automotive is another example — its electric vehicles are built in plants belonging to financial backers Volvo Car AB and Geely Automobile Holdings Co. Despite interruptions caused by China’s Covid lockdowns, it’s on track to sell around 50,000 cars this year, or twice what Rivian aims to produce. Although its gross margins are positive, the Swedish company made a first-half operating loss of more than half a billion dollars. So the jury is still out on whether its manufacturing strategy is truly superior.(1) It makes sense why some especially cash-strapped manufacturers are hedging their bets: Canoo Inc. plans to work with a contract manufacturer for its first vehicles while completing its own “mega-microfactory” in Oklahoma (a cross between a microfactory and a regular plant). “You must learn to crawl and then walk before you run,” Tony Aquila, the executive chairman and chief executive officer, explained last month. Even though Tesla’s many imitators are currently struggling, their manufacturing and technology investments may eventually pay off. But they’ll have to deal with capital markets that are less tolerant of high cash-burn startups, meaning their access to capital is likely to be much more limited. There’s no shame in outsourcing or starting small. An automaker that struggles to build cars doesn’t inspire confidence. Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel. 09 Sept, 23:17 IST electric vehicles tesla ![HT Tech Awards](https://tech.hindustantimes.com/ht-tech-power-list-awards-2026/httech-awards-banner-new.webp) ### Related Stories 29 Sept 2026 71,662,716,245,993 NEXT ARTICLE BEGINS ![View all](https://images.hindustantimes.com/tech/static/revamp/images/png/view-all-icon.png) ## Tips & Tricks ![Ghibli-style art](https://images.hindustantimes.com/tech/img/2025/03/28/414x233/ChatGPT_Ghibli_style_images_1743161814450_1743161814596.jpg) ### How to turn your photos into Ghibli-style art with ChatGPT for free: Step-by-step guide ![How to create an invitation using iPhone’s new Apple Invites app- Step-by-step guide](https://images.hindustantimes.com/tech/img/2025/02/14/414x233/invites_1738728829564_1739543695649.png) ### How to create an invitation using iPhone’s new Apple Invites app- Step-by-step guide ![Apple TV app arrives on Android phones and tablets: What you get and how to install it](https://images.hindustantimes.com/tech/img/2025/02/13/414x233/unnamed_1739426557335_1739426567634.jpg) ### Apple TV app arrives on Android phones and tablets: What you get and how to install it ![Vodafone Idea OTT plans](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Vodafone Idea users can now stream 17 OTT apps with one subscription: Here's how ![Android data transfer methods](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### How to transfer data from one Android to another using Google backup, USB-C cable, and more ## Editor’s Pick ![iPhone 16e launched with A18 chip, Apple AI—bringing flagship power on a budget: Check specs, price](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### iPhone 16e launched in India: All details about the new budget mobile from Apple ![DeepSeek was founded in China with only a fraction of the budget of the top AI companies in the US.](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### DeepSeek AI: How it works, who’s behind it, how it’s different from ChatGPT, and its big US market impact explained ![iPhone 17 Air likely to get this feature that iPhone 17 Pro models may miss out on](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### iPhone 17 Air likely to get this feature that iPhone 17 Pro models may miss out on ![Google Whisk AI explained: How remixing works, availability, and how it differs from Gemini](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Google Whisk AI explained: How remixing works, availability, and how it differs from Gemini ![iOS 18.4 beta arriving soon: Know why it is the biggest iPhone update](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### iOS 18.4 beta arriving soon: Know why it is the biggest iPhone update ## Trending Stories ![Airtel 5G SIM card will now be delivered in 10 minutes with Blinkit- How to order](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Airtel 5G SIM card will now be delivered in 10 minutes with Blinkit- How to order ![Infinix Note 50s 5G+](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Infinix Note 50s 5G+ set to launch in India with 64MP camera and MediaTek Dimensity 7300 SoC ![Xiaomi X Pro QLED Series sale starts in India: Check price, availability, and more](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Xiaomi X Pro QLED Series sale starts in India: Check price, availability, and more ![Apple Intelligence AI training](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Apple plans to train AI using your on-device data without accessing personal content or emails: Report ![CMF Buds 2](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### CMF Buds 2 key features and price revealed ahead of April 28 launch: Details inside keep up with tech ![Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/tech-facebook.png) ![Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/tech-twitter.png) ![WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/tech-whatsApp.png) ![Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/tech-facebook.png) ## Gaming ![Check out these five gaming monitors under ₹20,000,](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Top 5 gaming monitors under ₹20000 you should consider ![gaming consoles](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Grab gaming consoles at discounted rates during Amazon Great Indian Festival: Up to 72% off ![Pokémon GO Wild Area 2025](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Pokémon GO Wild Area 2025 to bring Grimmsnarl family, Shiny Hatenna, and global challenges ![Shade Silver](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Shade Silver free on Steam for a limited time: Here’s how to get it ![Call of duty](https://images.hindustantimes.com/tech/static/revamp/images/png/ht-tech-bg-img-90-66.png) ### Call of Duty: Black Ops 7 skips Switch 2 at launch, release date and price leak ![View all](https://images.hindustantimes.com/tech/static/revamp/images/png/view-all-icon.png) ## Trending News ### Airtel 5G SIM card will now be delivered in 10 minutes with Blinkit- How to order ![Airtel 5G SIM card will now be delivered in 10 minutes with Blinkit- How to order](https://images.livemint.com/static/static/1x1_img.gif) ### Infinix Note 50s 5G+ set to launch in India with 64MP camera and MediaTek Dimensity 7300 SoC ![Infinix Note 50s 5G+](https://images.livemint.com/static/static/1x1_img.gif) ### Xiaomi X Pro QLED Series sale starts in India: Check price, availability, and more ![Xiaomi X Pro QLED Series sale starts in India: Check price, availability, and more](https://images.livemint.com/static/static/1x1_img.gif) ### Apple plans to train AI using your on-device data without accessing personal content or emails: Report ![Apple Intelligence AI training](https://images.livemint.com/static/static/1x1_img.gif) ### CMF Buds 2 key features and price revealed ahead of April 28 launch: Details inside ![CMF Buds 2](https://images.livemint.com/static/static/1x1_img.gif) ## Trending Gadgets Mobiles Laptops Tablets ![HT Tech](https://images.hindustantimes.com/tech/static/revamp/images/png/HT_tech-new.gif) - https://tech.hindustantimes.com/tech/news/as-tesla-wannabes-try-to-enter-ev-market-can-an-electric-car-be-made-without-losing-billions-71662716245993.html