Investment Grew 10x for EV Start-ups in US during 2021

Electric Vehicles and New Start-ups Have Received Record Investment in 2021

Traditional car manufacturers and start-ups in the electric vehicle space, have gained record investment including private investment during 2021.

The data revealed that venture investment into start-ups totalled more than $20 billion in 2021, which is more than double the investment when compared to 2020.

Furthermore, traditional manufacturers such as Ford and GM, have announced strategic commitments in the order of billions into EVs, which subsequently will turn into acquisitions, partnerships and other business related investment consolidations.

One of the main reasons, for this uptake in recent investment is the feeling the traditional players not being left out of the growing market and thus affecting their businesses. It has been acknowledged that it is a multi-trillion market opportunity for the near future.

Only recently Ford announced that is dividing its manufacturing operations into EV and combustion engines. Furthermore, Honda and Sony have formed a partnership where a new company will develop and sell Electric Vehicles. This is an interesting business development pattern that could possibly become more appealing to others.

Around 50 new EV models to debut in North America by 2024

It is predicted that many of these new models will face tough consumer reservations, which in turn will face an uptake viable consumer target penetration, so that on analysis questions will be put on whether they can achieve a sustainable or sufficient business case so that they can continue to exist.

It is somehow accepted by many investors, that for new start-ups as expected they don't have the resources, consumer base or business scale capability when compared to the traditional manufacturers. Furthermore, in cases where EV companies went public via SPACs, such as Nikola Motor Co., their share price has underperformed in the US.

Acquisitions are always appealing to any traditional car manufacturer as it can drive their EV outputs faster and more efficient

One area that appeals to private investors, is the charging infrastructure and grid management for EVs. Furthermore, another area for startup investment are services around attracting consumers in the new era of EV and ensuring their needs are met at an acceptable level of satisfaction.

In a context, where current charging infrastructure is one of the main concerns for consumers. New innovative ways will be needed to address this area, so that confidence in EVs keeps growing and continues to be an alternative to combustion engines for at least the medium term, or until other technology becomes widely available that is less dependant on electricity generation.