Elon Musk’s Tesla led the way nearly two decades ago. Today, the global transition to fully electric vehicles is dotted with startups.
Elon Musk’s Tesla led the way nearly two decades ago. Today, the global transition to fully electric vehicles is dotted with startups, inspired by a new era of mobility and lured by the lower cost of building electric vehicles compared to their fossil fuel-guzzling ancestors.
Gone are the billion-dollar investments that made legacy automaking such a cash cow. Suppliers offer off-the-shelf, generic power platforms and manufacturers can accept assembly contracts – approaches that result in job and infrastructure savings.
According to Milan-based startup AEHRA, what was missing from the new EV formula was a new design concept.
“Electric vehicles are considered boring by the general public,” said AEHRA CEO Hazim Nada. “It’s very easy to build an extremely powerful electric vehicle. It’s not that easy to build an electric vehicle that has character. And I think that’s one of the elements that Italianness has to express. “
Nada has hired a former Lamborghini designer to help infuse its vehicles with Italian emotion and emphasizes aerodynamics over performance.
But the company wants to tap into an increasingly crowded market of electric vehicle startups and traditional automakers that are being pressured to tackle emissions from cars that contribute to climate change. Some startups have had little success.
AEHRA does not expect to launch its first vehicles – an SUV and a sedan – until mid-2025, with annual production starting at 20,000 to 25,000 vehicles. Ultra-premium cars also plan to have a corresponding price – 160,000 USD to 180,000 USD.
They are expected to roll out in the US and major European markets first before expanding to China. This would follow an initial production investment of 700 million euros (dollars).
“We don’t spend a lot,” Nada said. “This is due to the fact that we are evolving the materials in such a way that the production chain is very light compared to existing production methods.”
Nada earned most of the start-up money trading crude oil in London and honed his passion for aerodynamics by building the world’s largest vertical wind tunnel, AeroGravity, an attraction north of Milan that lets anyone to experience free fall.
While AEHRA cars are aimed at the affluent as inflation bites the middle class and low-income people, battery-powered vehicles generally gain consumer acceptance and governments drive automakers away from engines internal combustion.
US asset management and research firm Bernstein predicts that a quarter of all cars sold by 2025 will be electric or plug-in hybrid cars, doubling by 2030. It cites ambitious rollout timelines and support regulatory.
The European Union bans sales of new fossil-fuel cars by 2035, giving rise to new players with lower start-up costs while potentially penalizing traditional carmakers who have invested billions in hybrids as technologies of transition.
Battery electric vehicles saw the strongest growth of any fuel type in the third quarter, up 22% to more than 259,000 units, according to the European Automobile Manufacturers Association. This represents a market share of 12 percent.
The U.S. market share is lower, at around 6%, but Bernstein expects that to accelerate significantly with U.S. policies such as tougher energy efficiency standards.
As interest grows, dozens of new startups are entering a crowded market alongside pioneer Tesla and traditional automakers, some with century-old track records. According to Bernstein’s research, the United States alone has 417 electric vehicle startups, some of which provide cautionary tales.
California-based Faraday Future has invested billions in an electric car it has yet to build. Others, like Lucid or Rivian, which went into production struggled to get components due to global supply chain shortages, said Sam Abuelsamid, principal e-mobility analyst at Guidehouse Insights.
At the same time, Chinese manufacturers are making inroads in Europe, with an eye on the American market. In the Italian luxury market, Ferrari and Lamborghini have announced plans for their own electric vehicles.
“It’s going to be a lot tougher now than it was a decade ago for Tesla, when they were basically the only brand with a high-performance, premium electric vehicle. And now there are dozens of brands doing that, competing for that same dollar,” Abuelsamid said.
Another risk is service and support, especially when launching in large geographies without integrated sales and service networks, Abuelsamid said.
AEHRA’s plans primarily include online sales and regional service centers, Nada said.
The design is where AEHRA hopes to grab market attention, moving away from the architecture of an internal combustion engine that Nada says has been conditioned by thermal management.
The body of the AEHRA vehicle moves away from the edges that defined the…