🚘 The Electric Car Evolution

Issue 35 — Cars

Electric cars are getting more popular by the day. We’re seeing more Teslas, Rivians, and other electric cars on the road which makes me wonder–how are these companies evolving, and how do you pick a good electric car? In this article we will go through the “framework” the new electric car companies are going through to create a company and some of the things you should look for when purchasing an electric car. Make sure to like, share, follow, and check out my LinkedIn!

Some Context

Tesla was founded on July 1st, 2003 by two guys named Martin Eberhard and Marc Tarpenning in San Carlos, California. Elon Musk is often credited with being the founder of Tesla, but in reality, he only agreed to be the CEO in 2008 since he was the largest shareholder of the company, and he felt that there wasn’t really a clear direction to move forward for the company. Since then, the company has had its ups and downs. At one point, Tesla almost got bought out by Google as they were losing sales on the Model S. However, Elon Musk decided against this merger, and since then Tesla has grown exponentially. This brings us to today, where they are the sixth most valuable company in the United States. One of the reasons that Tesla is worth so much is that people believe they are the future. This makes them want to catch the wave and invest in the company. As a result of all this hype, their sales numbers are increasing which leads to an overall successful company.

Now others have seen Tesla’s success in the last few years, convincing them that they can create their own, just as successful, car companies. This has created a wave of new car manufacturers like Rivian, Lordstown Motors, Faraday Future, Canoe, and so many more.

However, Tesla isn’t immune to all problems. In 2017, Tesla released a supercar called the “Tesla Roadster”. The car has received a lot of hype, and interested buyers can click the vibrant pre-order button at the top of their website to preorder the car for $250,000. Well since 2017, the Roadster has yet to be in the hands of consumers. Essentially this means thousands of people have given Tesla an interest-free loan of a quarter million dollars and haven’t received anything in return. This is a problem.

The Five Steps to Create a Car Company

Creating an electric car company today is harder than ever with recent events. I think that there are five steps that most electric car companies follow these days:

1. Have An Idea: The first step to creating a company is to showcase an idea. Create a nice-looking website, and show off the new idea that you have in mind.
2. Establish Your Company: After your idea gets some initial traction, you will have to create a company to make the idea look promising. Prioritize fun company culture and a cool CEO, and also hire car manufacturers, R&D scientists, and other roles to ensure a successful company.
3. Create a Prototype: The third step in this formula is to build a prototype. This will demonstrate your ability to build a car. Creating a prototype also allows the building of hype around the car company.
4. Fundraising: The next step is to generate a lot of funding for your idea. This is to pay employees, build factories, buy parts, etc. You’ll probably want to put a bright, flashy pre-order button at the top of your webpage so people can support you, and maybe even go public.
5. Deliver: The final step is to ship all the orders that you receive. Then congrats! You’ve officially made it over all the humps and are now a real car company.

Okay, so this is one of those processes that is way easier said than done. Most companies can get to step 4 pretty easily, but the gap between four and five is huge. Rivian is one of the companies that have been successful in using this framework. They secured a contract with Amazon and were backed by Ford, and they are starting to ship their pickup trucks and SUVs.

Lordstown Motors is an example of a company that hasn’t been successful, and they’re stuck on step four. They’ve generated a lot of money (allegedly), and their value used to be very high. They haven’t been able to ship out cars since they don’t have enough money to do that. Plus they paid other companies to pre-order cars and other bad things. Since then, this company has been on a downward trend.

On the other hand, though, you have established manufacturers who already have a lot of money and support. They can skip steps one and two, and can just go ahead and make a prototype of their new electric vehicle. This generates even more hype, money, and promises around the company.

What You Should Look For When Buying An Electric Car

Here are some things that I think are important to look for when shopping for an electric car.

• Range: Electric cars need to have good range, since there aren’t as many gas stations as chargers, even though this accessibility is expanding. I think you should look for a range above 250 miles, with 300 miles being a good sweet spot.
• Performance: Electric cars have many advantages over gas cars, one of them being performance. You don’t have to wait for a gearbox to shift to the next gear. Instead, things like torque and instant acceleration are a lot faster.
• Chargers: This goes along with the range, but I think you should consider what you will be using the car for. Will you have a long commute to your workplace? Will you be taking road trips in this car? Essentially, what will this car be used for?
• Maps: This is subtle, but I think good maps in an electric car are important. Even if you are equipped with Apple CarPlay or something similar, your phone isn’t going to know how much range is in the car, your driving style, if you’re using the AC or not, or other important factors. As a result, you’re probably going to use the in-car navigation a lot.

Thanks for reading this week’s article. I hope you learned something about electric cars! I’ll talk to you next week!

-Luke Rapaka

Acknowledgments: Thank you to my friend Sharvi Shah for helping me edit this article! (LinkedIn Profile)