New EV OEMs are also digital-first
Last week I spoke with Aaron Gordon of Vice. He was asking why the market is rewarding the newest batch of electric vehicle OEMs, like Rivian. It is a good article with varying viewpoints. I also commented on a trend that I believe gets overlooked: the convergence of the electric drivetrain and the digital-first nature of these new OEMs. My comments are below:
Some investors also see EV-first companies like Rivian and Lucid as much more than car companies, which can be seen as an advantage. “New mobility firms like Rivian and Lucid are not only EV leaders but also digital leaders,” argued John Tough of Energize Ventures, a venture firm. “They were born in the digital age and have no legacy technical systems to weigh down their platforms. The EV driving experience is superior and cheaper [at least when it comes to mileage and maintenance costs]. And now the in-car entertainment and engagement is also superior to any incumbent automobile company. That combination should enable the new firms to win market share and create more value”” than original equipment manufacturers.
Tough thinks a few legacy firms will “retain share,” specifically name-checking Ford, but expects most of them “are running an uphill race with a parachute behind them while EV-first firms are sledding downhill.”