Low volumes make it tough going for new entrants

Although it has built a strong and seemingly defendable market position, Tesla faces many challenges. For other new entrants in vehicle manufacturing, the future is far less rosy. Arrival, the UK-based, Hyundai-backed, SPAC-financed electric commercial vehicle start-up has placed its key UK operations into administration. It has not yet built a single vehicle despite having claimed it would revolutionise not just the EV market but the production process too. It had intended to make vehicles in a series of micro factories, none of which have been built or operationalised.

Other new entrants have managed to build vehicles, but at much lower volumes than the companies themselves had suggested, and investors had expected. These low volumes have been reflected in poor financial results.