- The chip shortage has halted some vehicle production for days or weeks at a time in recent months.
- But legacy automakers aren’t the only ones affected. Nascent carmakers could be next.
- Here’s a look at how electric vehicle startups are navigating the problem.
Shuttered production lines. Skyrocketing vehicle prices. Vacant dealership lots. The microchip shortage has been wreaking havoc for major automakers across the globe for months.
And as it becomes clear that the shortage will stretch into 2022, it’s looking like the electric vehicle startups gearing up to start production of their debut vehicles will have to grapple with the problem that’s been pummeling Ford, General Motors, and the other legacy players they’re hoping to upset.
“They are going to be as impacted by this as everybody else because in many cases, they’re using a lot of the same components that are the most impacted by this,” Sam Abuelsamid, principal research analyst at Guidehouse Insights, said of startups like Rivian, Nikola, Canoo, and others.
Rivian, for one, has already taken a hit from the shortage. The company delayed the launch of its R1T pickup truck from July to September, with the R1S SUV expected to arrive sometime after that, Rivian CEO RJ Scaringe told customers in an email earlier this month. Scaringe attributed the delays to pandemic-related supply issues, “especially semiconductors.” (Rivian declined to comment for this story.)
Peter Savagian, chief technology officer of electric vehicle startup Canoo, told Insider in a statement that, “Chip shortages are on our radar and we have proactively engaged to avoid and minimize possible future impacts to our production plans.”
Lucid Motors, too, has delayed the launch of its debut vehicle, but CEO Peter Rawlinson told Insider in June that the delay didn’t stem from the chip shortage. “We’ve mitigated the risk with semiconductors,” Rawlinson said. “We’re going to be large volume in time, but to start with we’re relatively low volume, so that helped.” (The Air luxury sedan, originally slated to begin production in late 2020, is now scheduled for later this year.)
But Abuelsamid warns that being a small customer could also hurt the small companies getting off the ground. “When the chip suppliers are looking at who are they going to prioritize in terms of delivery of components, they’re generally going to go with their biggest customers,” he said. “They’re going to prioritize somebody that’s buying 100,000 or one million chips before somebody that’s buying 1,000 or 10,000 or 100.”
The shortage could offer an unexpected benefit to startup automakers: a ready-made excuse for production struggles. “If you’re a startup and you just overshot your target and you’re not going to be able to launch January 1, it’s nice to blame the chip shortage for that as opposed to, ‘It was more complicated to produce these vehicles than we thought,'” said Sam Fiorani, VP global vehicle forecasting at AutoForecast Solutions.
Indeed, some players in this space have more immediate or larger problems than choked supply lines. Riddled with controversies in recent months, electric and hydrogen fuel cell startup Nikola Motors has been developing electric pickup trucks but does not yet have any vehicles in production. It is unclear what sort of impact the Phoenix-based company might face from the chip shortage as it seeks to meet its goals in the coming years. Nikola declined to comment to Insider.
Still, any near term delays for startups “could actually be more painful as you’re trying to preserve your capital until you can actually start bringing in some major cash flow,” Abuelsamid said. “The startups may actually be feeling more pain from this than we’re publicly aware of.”