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Electrification and autonomous vehicle technology startups were once darlings of the corporate and venture capital world. The two technologies promised billions of dollars in revenue and a new avenue for automakers to make money beyond building and selling cars.
Those days of VC capital raising have been over for AVs for a while now, with a few exceptions like Waymo and Wayve. But as 2024 began, there was still a persistent hum of EVs in the air, albeit quieter than before.
Now, as 2024 draws to a close, it's safe to say the rumors are more of a whisper, with several EV startups faltering and automakers readjusting their investment plans.
Demand for electric vehicles began to slow in 2023, and while overall sales volume rose, the pace of growth was well below expectations. In 2024, automakers responded. Ford changed its plans, which included abandoning a plan to make an all-electric three-row SUV and opting to power those future vehicles with hybrid powertrains. GM, which had already cut spending on electric vehicles in 2023, took further action in 2024, recently transferring its stake in the nearly completed Ultium Cells battery cell plant in Lansing, Michigan, to its joint venture partner LG Energy Solution. Stellantis and Mercedes have their plans on hold in electric vehicle battery factories.
Toyota's often criticized approach to Go slow with electric vehicles and continuing to prioritize hybrid and gasoline vehicles now seems like a smart move.
The results were not very good for electric vehicle startups either.
Meanwhile, autonomous vehicles had their moment of hype in the venture capital sun a few years ago before reality hit: It turns out that self-driving cars are difficult, the business model is unproven, and their backers may not have the patience for a long-term future.
A first wave of consolidation swept through the sector in 2019 and 2020. Some AV (and EV) startups merged with special purpose acquisition companies in search of the public market capital needed to commercialize their technology. Others stuck with backers from big-name automakers. Both strategies suffered setbacks in 2022 and 2023, prompting one last fight for survival: the pivot.
Startups once focused on opportunities in self-driving cars tried to apply their technology to warehouses, mining and agriculture. But it turns out those areas were already rife with competition. Others stuck to their original mission but became dual-use companies because defense technology is all the rage these days.
In short, 2024 was the year that weaker startups said goodbye and corporate entities took a hard look at what they were spending and said “it’s time to move on.”
Apple car project
Apple's not-so-secret car project, which we never even got to know about. And yet, we all feel the loss. Perhaps because we've been hearing about the promise and vague plans for an electric and autonomous (maybe) car from Apple for so long: a decade since the first plans were leaked. Apple made it official in 2024: the car project was cancelled.
Arrival
This electric vehicle startup, which wanted to use microfactories to make its commercial electric vans and buses, was once valued at more than $13 billion and backed by Hyundai and UPS. The company went public in 2021 via a SPAC and by 2023 was already struggling, even with a $300 million lifeline meant to turn the business around. Less than a year later, Arrival announced its U.K. division was entering administration, the country’s version of bankruptcy.
Latest news: Troubled electric vehicle startup Canoo has bought some of Arrival's assets after it filed for bankruptcy.
Cake
Electric bikes and electric motorcycles had their moment during the Covid pandemic, but that didn’t guarantee survival. In February, Swedish company Cake filed for bankruptcy. The company, best known for making high-design bicycles, was apparently in the middle of a funding round. The withdrawal of an investor tipped its fortunes in the wrong direction. In the weeks that followed, a Florida man who owns a retail store bought up most of its inventory in the United States.
However, Cake had a second life. The company emerged from bankruptcy and was Acquired by a Norwegian car dealer Brages Holding AS.
Cruise robotaxi
Cruise isn’t technically dead. The self-driving car company will live on, parent company GM says, but it’s unclear exactly what form that will take. But GM is no longer funding the commercial robotaxi program, which Cruise was focused on. The decision “caught Cruise employees by surprise,” including top executives.
This decision is only just beginning to reverberate through the organization. More news on Cruise and GM's plans for automated driving is expected in 2025.
Fisker
Where do we start? The year didn’t start well for Fisker, as the EV startup struggled to meet its internal sales targets and its Ocean SUV came under investigation by federal safety regulators over complaints about brake leakage. From there, things got worse with more federal investigations, layoffs, a suspension from the New York Stock Exchange, and finally bankruptcy in June. Here’s the timeline of major events.
Ghost Autonomy
Ghost Autonomy, a self-driving software startup, shut down in February. The startup, founded in 2017 as Ghost Locomotion, had gone through some changes. It had ultimately raised $220 million before closing for good.
Lilium
Lilium, the electric vertical takeoff and landing startup, shut down in October after running out of money. Here’s a staggering figure to consider. The company had raised over $2021 billion from investors before going public in XNUMX on the Nasdaq Exchange via a reverse merger with a blank-check company, SPAC Qell.
There is still interest in electric aircraft startups. In recent months, a German startup called Vaeridion that is developing short-haul electric aircraft closed a €14 million Series A round, Archer raised $430 million to build defense aircraft, and Toyota made a $500 million investment in Joby Aviation.
Northvolt
Swedish battery maker Northvolt announced in November that it would file for bankruptcy in the United States and that its co-founder and CEO, Peter Carlson, had resigned. The company was a favorite of investors, having raised $14.260 billion, according to PitchBook, including a $1.200 billion round in 2023 to expand its North American operations.
Phantom Aut
The California startup, which had developed a teleoperation platform that allowed a remote driver, sometimes located thousands of miles away, to operate a vehicle if needed, shut down in March. The company had raised a total of $95 million from a mix of backers, including angel investors and early-stage venture capitalists such as Bessemer Venture Partners and Maniv Mobility, private equity firm InfraBridge, and strategic investors such as ArcBest and ConGlobal.
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