- Elon Musk thinks new electric vehicle startups are doing it all wrong, he told the Financial Times.
- EV companies are taking too big a swing early on, he said, calling their approach “crazy.”
- “To start a car company is mega pain. It is not easy money,” he said.
Tesla CEO Elon Musk has a word of advice for the field of electric car startups trying to replicate his company’s success: It’s extremely difficult.
During an interview at the Financial Times’s Future of the Car conference on Tuesday, Musk said he sees many fledgling electric-vehicle companies taking the wrong approach. And if they view Tesla’s gangbusters success as a sign that EVs are a surefire way to get rich, they should think again.
“Tesla almost went bankrupt so many times I lost count,” Musk said. “To start a car company is mega pain. It is not easy money. It is the furthest thing from easy money you could possibly imagine.”
According to Musk, the widening crop of EV startups today is taking too big of swings too early on.
“What I see with some of these new car companies is that they’re jumping in at the deep end and trying to create a high-volume vehicle when they have never made a vehicle before,” Musk said. “This is like not practicing your athletic sport and then going to the Olympics. You’re not going to win. This is crazy.”
Musk says startups should start small and make their mistakes early before progressing to higher production volumes.
“You really need to start out small, makes your mistakes at a small scale, make sure you’ve got a lot of reserved capital, and then gradually build up from the dumb things you do in the beginning and be less dumb over time,” the Tesla CEO said. It’s “extremely difficult,” he added, to go up against established automakers who have the advantage of existing expertise, dealer networks, and customers.
Rivian and Lucid Motors, two of the most promising EV startups, began shipping their first vehicles late last year. For Rivian, that’s an outdoorsy pickup truck. For Lucid, it’s a $170,000 luxury sedan called the Air. Both startups have had a rougher time scaling up manufacturing than they expected, forcing them to raise prices and cut production targets.
As it races to deliver cars, Lucid has had to buy parts off of Amazon and send corporate workers to help assemble vehicles, Insider reported previously.
And a huge array of upstarts promises to unleash electric pickups, SUVs, sedans, and commercial vehicles in the near future.
The new EV player that impresses Musk most of all, he said Monday, isn’t a startup at all but rather one of the largest automakers on the planet: Volkswagen.
“I think the company making the most progress besides Tesla is actually VW, which is not a startup but could be viewed in some ways as a startup from an electric-vehicle standpoint. So VW is doing the most on the electric vehicle front.”