chances are good you’ve never heard of some of these automakers chances are good you’ve never seen one of their cars on the road but an american driver in the early days of motoring might not have seen a davis a cord a ford f  a buick or a coeymitchell either they would have had no way of knowing which of those companies would still be building cars in our time the electrification of the automotive industry has seen a bevy of new startups launch each hoping to become the established automakers of a century from now if history is any guide most of them will fail but a few will hang on “it should not be surprising these companies are burning through cash and piling up losses” he washington post says electric vehicle startups fisker fsr  lucid lcid  and rivian rivn have each watched their market values deflate significantly by midmay automakers must lose money for years to make money the automotive industry is one of the hardest businesses to break into because of the huge capital expenditures required to reach critical mass starting up a new automaker requires outsized outlays of cash and years of losses if it works it can result in outsized profits tesla tsla is today the world’s most profitable automaker and america’s bestselling luxury car brand but the company saw its first profitable quarter selling cars 18 years after its founding the company had sustained itself in the meantime by selling regulatory credits to other automakers but that option isn’t available to newer rivals now that almost every company builds an ev traditional automakers no longer buy credits michelle krebs executive analyst at kelley blue book parent company cox automotive compares it to the early days of the automotive industry “there was a shakeout of just a few players” she says with companies like ford and general motors surviving and others like davis and eldridge disappearing there will be a similar shakeout of ev builders read more a successful ev startup needs cars capacity and cash ev startups have certain advantages the earliest automakers didn’t have today’s evs are often built on socalled skateboard platforms – flat combinations of batteries electric motors steering and suspension components that can be scaled up or down to build many different types of vehicles for instance general motors’ gm new ultium platform underlies everything from compact suvs like the chevy equinox ev to fullsize pickups the silverado ev within a few years gm vehicles with prices ranging from 30000 the equinox again to 300000 the cadillac celestiq will use many common parts that technology means a startup automaker can design and use one platform to power vehicles in many segments startups can also skip the process of building a dealership network and just sell cars directly to consumers teslastyle but the cost of entry remains punishingly high “with capital significantly more expensive today and an interest rate environment moving up we’re seeing more ev players squeezed” says wedbush analyst dan ives successful design isn’t enough the endurance pickup from startup lordstown motors ride was a finalist in the 2023 north american car of the year awards in the truck category the company still warned investors recently that it may close its doors soon lucid’s air sedan has won rave reviews and holds the title of longestrange ev it’s epacertified for up to 520 miles depending on configuration last week the company reported a firstquarter loss of nearly 780 million the company said it ended the quarter with about 41 billion in total liquidity which it expects to provide funding “at least into the second quarter of 2024” see also fisker cuts production guidance posts wider loss than expected rivian is in better shape temporarily ending the quarter with about 112 billion in cash and equivalents but the company reported losses of 13 billion last quarter cox automotive parent company of kelley blue book and autotrader is a minority investor in rivian “new players always underestimate how much it costs to start a car company” krebs says “there surely will be failures because so many have started up and the times have drastically changed”