The Shifting Tides of Autonomous and Electric Vehicle Startups

Once the shining stars in the eyes of venture capitalists and corporate giants, autonomous vehicle (AV) technology and electrification startups promised a revolution in revenue streams for automakers. Companies like Waymo and Wayve stood as exceptions in an otherwise cooling market. As 2024 kicked off, the electric vehicle (EV) buzz lingered but began to soften significantly by year’s end.

Market Realities: Adjustments and Pivots

Throughout 2023, EV demand began to wane despite an overall increase in sales volume. The anticipated growth was far from reality, leading automakers to rethink their strategies. Ford, for example, shifted its focus from an all-electric three-row SUV to hybrid powertrains. General Motors (GM) followed suit by selling its stake in the Ultium Cells battery plant to LG Energy Solution. Meanwhile, Stellantis and Mercedes put a pause on their EV battery factory plans.

“Toyota’s cautious approach towards EVs seems prudent now.”

{Industry Analysts}

AV Industry: A Reality Check

The autonomous vehicle sector had its moment of glory before reality set in. Driverless cars proved complex with unproven business models, leading to impatience from investors. Many startups pivoted their focus to industries like warehouses and agriculture but faced stiff competition.

• Some AV companies merged with special purpose acquisition companies (SPACs).
• Others maintained partnerships with established automakers.

A Year of Farewells and New Beginnings

2024 marked the departure of weaker startups as corporate entities reassessed their investments. Apple’s long-speculated car project was officially canceled, marking the end of an era of speculation.

Electric Vehicle Startups: Trials and Tribulations

EV startup Arrival faced significant challenges despite a $300 million lifeline. It entered administration in the UK, with Canoo acquiring some assets post-bankruptcy. Cake, a Swedish e-bike company, filed for bankruptcy but found a second chance with Brages Holding AS.

Cruise Control: Uncertain Future for GM’s Self-Driving Arm

GM decided to halt funding for Cruise’s robotaxi program, leaving its future shape uncertain. The decision took Cruise’s employees by surprise, signaling possible changes ahead in automated driving strategies.

The Downfall of Fisker and Other Startups

Fisker struggled throughout 2024 with sales issues and federal investigations, ultimately leading to bankruptcy by June. Ghost Autonomy shut down after raising $220 million, while Lilium ceased operations despite significant investments.

Aviation Ventures: Ongoing Interest Despite Challenges

Despite Lilium’s closure, interest in electric aircraft persists. Vaeridion secured €14 million for short-haul electric planes, while Archer and Toyota invested heavily in defense aircraft ventures.

Turbulence for Battery Manufacturers

Swedish battery maker Northvolt filed for bankruptcy in the U.S., marking a significant blow after raising over $14 billion. Meanwhile, a California startup providing teleoperation platforms also shut down after raising $95 million.