Once a startup begins production, a new and perhaps even more difficult maze lies ahead: distribution, marketing and the timely provision of parts and service.

Reporter covering technology, engineering and Jaguar Land Rover for Automotive News

Lucid NY showroom


A Lucid Air Grand Touring at the EV maker’s showroom in New York on Aug. 8, 2022.

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The toughest hurdles for today’s EV startups to overcome, I once thought, were designing, engineering, testing, validating and manufacturing to world-class standards an all-new vehicle.

I might have been wrong.

Turns out that once companies such as Rivian, Lucid and Lordstown cleared those obstacles, a new and perhaps even more difficult maze lay ahead: distribution, marketing and the provision of timely parts and service. For small companies, those key operations add a lot of expense and head count at a time when revenue doesn’t cover costs.

Tesla CEO Elon Musk bloviated on social media in December that rival Lucid is headed for extinction. He has made similar self-serving remarks about Rivian. While it is in poor taste to publicly disparage rivals, Musk knows how difficult it is to start a car company that can clear design, manufacturing and marketing roadblocks and become profitable. In 2021, after 18 years of losses, Tesla reported its first full-year profit. Musk may throw major shade at the competition, but don’t entirely discount what he says.

Lucid manufactures the high-performance Air sedan. It has won numerous accolades for performance, style and driving range. Business Insider reported that Lucid officials are extremely worried about order cancellations that have occurred. In the third quarter, Lucid lost $530 million on revenue of $195 million. Soaring prices for raw materials in batteries and electric motors have affected every electric vehicle maker, and the chip shortage has disrupted output.

Rivian, funded by Amazon, Ford and others, is also struggling. Financially strapped Lordstown Motors might not make any more pickups beyond the 500 it plans to build by spring.

And while Rivian and Lucid are not in immediate danger of running out of money, they should reevaluate one part of the business: distribution.

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In Lucid’s case, there are numerous luxury brands with distribution networks that could offer a lot to the California startup.

Lincoln’s first EV is still years away. Imagine the benefits Lincoln dealers could derive from selling the Lucid Air. They’d have an immediate EV competitor to Mercedes and Cadillac. Lincoln dealership technicians would gain experience working on an EV now, not in 2025. And Lucid customers all of a sudden would have a nationwide network of dealers, making the ownership experience far less stressful. Ford has shown interest in working with other automakers. At one time, there was to be a Rivian-based Lincoln. Could Toyota’s Lexus division use an EV right now? How about Chrysler?

If I’m Rivian CEO RJ Scaringe, I’d look at Land Rover and Volkswagen dealers for a distribution deal for the R1T pickup. Because of the Chicken Tax on imported trucks, neither brand is likely to ever offer a pickup in the U.S. You give either of those dealer networks some version of the R1T to sell, and Rivian would be able to scale up production and lower its breakeven point far faster than going it alone.

Even though Lucid and Rivian have sufficient funds for the near-term, they are probably not going to survive 18 years without making money. Credit to Musk for pulling that off.

You may email Richard Truett at [email protected]

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