In a renovated old cash register factory in suburban Detroit, 300 engineers are toiling away on an all-electric pickup truck and a sports utility vehicle that they hope can take on Tesla Motors Inc.
All of them work for Rivian LLC, which is to unveil the two vehicles ahead of the Los Angeles Auto Show tomorrow.
It is among a growing line of start-ups and established automakers looking to enter the fully electric vehicle market.
Photo: EPA-EFE
The influx of vehicles that run solely on batteries almost certainly will pull buyers from the leader, Tesla, which is expected to deliver more than 300,000 vehicles worldwide this year.
Established automakers, such as Audi AG, BMW AG, Daimler AG, Porsche AG, Jaguar-Land Rover Automotive PLC, Volkswagen AG, Hyundai Motor Co, General Motors Co, Ford Motor Co and even vacuum cleaner maker Dyson Ltd have promised to roll out new electrics in the next few years.
The luxury automakers compete directly with Tesla’s higher-margin vehicles, the Models X and S.
There also are electric car brands in China. The two biggest brands by sales — BYD Auto Co (比亞迪汽車), a unit of BYD Co (比亞迪) in Shenzhen and state-owned BAIC Group (北汽集團) in Beijing — are making inroads into foreign markets.
BYD sells battery-powered buses in the US, Japan and Europe. BAIC in April announced plans to manufacture electrics in South Africa. Its electric car series, starting at 150,000 yuan (US$22,000), is China’s top-selling electric car.
Sweden’s Volvo Cars Corp, owned by China’s Geely Holding Group (吉利控股), said it plans to make an electric vehicle in China starting next year for sale worldwide.
Tesla “will unquestionably lose market share as more competitors come in,” Gartner Inc senior analyst Michael Ramsey said.
What is unknown, though, is whether the demand for electric vehicles will rise enough so that there is room for everybody.
The market is tiny. In the US, electric vehicles only amounted to 0.8 percent of new vehicle registrations through August this year, according to IHS Markit data.
However, that is substantially more than the 0.5 percent the same time last year.
Automakers in the US sold just more than 155,000 fully electric vehicles through October, about 1 percent of total sales, according to Edmunds.com.
Yet globally, Navigant Research predicted huge growth in the next seven years, from just more than 1 million sales this year to 6.5 million by 2025.
As competition ramps up, prices are gradually coming down, edging closer to cars with internal combustion engines. At the same time, electric range is on the rise.
For instance, Rivian is promising that the top version of its R1T pickup will have more than 644km of battery range per charge when it goes on sale in late 2020.
The five-seat pickup is aimed at a market Tesla is not yet in, an off-road capable truck with outdoorsy features.
Rivian, headquartered in Plymouth Township, Michigan, said the R1T can go fast on pavement, with one electric motor per wheel taking it from zero to 100kph in three seconds.
It also has a retractable bed cover and storage space running across the width of the truck behind the rear seats that can carry surfboards, snowboards or skis.
It has a white horizontal light bar across the front with oval headlamps.
Chief executive officer R.J. Scaringe, 35, who has a doctorate in mechanical engineering from the Massachusetts Institute of Technology, said exact pricing would be announced later, but a basic truck with smaller 370km battery pack would start under US$70,000.
A truck with the longer-range battery would be about US$90,000, he said.
The small start-up still has a long way to go to sell vehicles, even though it said it has US$500 million in funding.
It has to develop a sales and service network, announce a battery cell supplier and start producing vehicles in a former Mitsubishi Motors Corp plant it owns in Normal, Illinois.
Tesla might lose sales for a time as competitors bite into a slow-growing market, IHS analyst Stephanie Brinley said.
However, eventually electric vehicle sales would take off and Tesla sales would rise, she said.
Tesla chief executive officer Elon Musk has said many times that competition is good, fostering the company’s goal of sustainable transportation.
“It is impossible for Tesla to build electric cars fast enough to address the carbon crisis,” Musk wrote in a 2014 blog. “Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”
Joe McDonald contributed to this report.
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