You can be on Entrepreneur’s cover!

'Next Tesla' Electric Car Startups Hit Speed Bump: 'Investors Want To See Demand' Electric vehicle companies large and small, from Ford to Tesla to Rivian, are dealing with cooler-than-expected demand for EVs.

By Sherin Shibu

Key Takeaways

  • The reality of the EV market isn’t meeting industry expectations this year.
  • Startups such as Rivian and Lucid haven’t been able to pivot as quickly as Tesla or Ford.
  • Employees at EV startups are dealing with the consequences of smaller profit margins and lower-than-expected demand.
entrepreneur daily

Even though a record 1.2 million electric vehicles were sold in the U.S. last year, the reality of the EV market isn't meeting industry expectations. EV growth has slowed this year in the U.S. — and, as evidenced by recent moves by several companies, automotive giants and startups alike are adjusting to the road ahead.

For example, EV industry leader Tesla warned investors about "notably lower" growth on Saturday after slashing prices on its EVs in an attempt to boost demand last year. Ford is delaying a planned $12 billion in EV investments, pushing back some planned EV launches, and shifting its strategy to new, more affordable EVs.

Meanwhile, startups such as Rivian and Lucid haven't been able to pivot as quickly as Tesla or Ford, even though both of these startups have wealthy backers (Amazon has a 17% stake in Rivian, and Saudi Arabia's Public Investment Fund owns 60% of Lucid, according to Bloomberg). On Wednesday, these relatively new companies forecasted that they would produce EVs at numbers below analyst estimates.

Rivian expects to produce 57,000 vehicles in 2024, according to Reuters, which is far below analyst estimates of 81,700 EVs and less than the 57,232 EVs it produced last year.

An R1T model electric truck on the pilot production line at Rivian's headquarters in Irvine, California, US, on Wednesday, July 5, 2023. Photographer: Alisha Jucevic/Bloomberg via Getty Images

Lucid expects to make 9,000 units this year, though Wall Street estimates anticipated 22,594 EVs. Lucid predicted it would make ten times that amount (90,000 units) by 2024 when it went public three years ago.

Employees at EV startups are dealing with the consequences of smaller profit margins and lower-than-expected demand. Rivian cut its workforce by 10%; the company lost about $2 billion last year. Polestar, another EV startup, cut 450 jobs globally last month.

"For these car manufacturers, investors want to see demand," said David Wagner, portfolio manager at Aptus Capital Advisors, told Fortune.

Though the all-electric market may be slowing down, sales could continue to go up. Cox Automotive predicts that EVs will make up 10% of the U.S. vehicle market by the end of 2024 — an increase from 7.6% last year.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.


I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.


6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.


You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.