Going for Gold: The rush to win the EV race

With established and startup automakers backing the BEV movement, consumers can expect many new entries to the US market

Akin to the California Gold Rush of the mid-1800s, established and startup automakers are hitching their wagons to the battery electric vehicle (BEV) movement and it’s touching off an unprecedented number of new entries into the US market. 

Looking back to 2000, buyers in the US ‘only’ had a choice of 235 unique models across 37 brands*. Fast forward to 2021, and that number has increased to just below 330 models from 43 brands – an average increase of 4 models per year. Over the next five years, that number is expected to skyrocket by nearly 17 new entries per year, with the number of models in the market increasing to over 400 – approaching double what was available to consumers in 2000.

Part of this growth can be attributed to established automakers like GM, Hyundai, and VW fragmenting their showroom as they transition from ICE to BEV models. Also helping to propel the model growth over the next five years is an influx of 18 new brands dedicated to BEVs, with that number seemingly growing every day. Fifteen of those BEV brands are startups looking to take advantage of the open gate to entry that the EV movement – and a new administration and regulations – has afforded. Backed by big dollars and even bigger aspirations – and aided by a somewhat less complex vehicle development process – these BEV startups also come with little brand equity and a high degree of cost and risk, factors that historically have closed the gate on those who wanted to enter this market.

From Arrival to Workhorse and Canoo to Rivian, these startup EV automakers are projected to have close to 40 models available for Americans. While most of these upstart brands are not expected to surpass sales of over 50k units annually over the next five years, they do pose a risk to established automakers in terms of market share loss, if only because of the sheer number of choices that fall outside of their brands. 

The influx of startups should be a boon for production in North America, as we see these manufacturers adding over one million units of capacity over the next five years; Rivian will account for over 50% of that. But the high degree of risk also flows into production as we see the utilization of those plants, based on expected demand, at just 30% – a sobering reality check to the big dreams. 

Just as not all the forty-niners of the California Gold Rush came away rich, not all these BEV startups are likely to strike gold. However, this generation’s BEV Gold Rush will benefit the US consumer, as heightened competition and fresh perspectives will likely improve all vehicles and provide customers with more choice.

*Excluding Super-Premium brands