The Electric Car Pre-Order Problem

[Music] so tesla rolled the new roadster 2.0 off the back of a truck and unveiled all of its ridiculous specs in november of 2017 world record acceleration world record quarter mile time world record electric range this looked like the new king of performance sports cars so if you liked it you could order a founder's edition on the spot that day to be in the first thousand you just have to wire transfer the full price of the car to tesla within 10 days 250 000 but now it's 2022 and that car is still not out yet and so you just gave tesla a five-year interest-free loan of a quarter million dollars now if you just put that exact same quarter million into an investment that actually earns you money like let's say i don't know buying tesla stock with that exact dollar amount on that same day then that would be worth more than four million dollars today electric cars have a problem right now so first let me just say i firmly believe electric cars are the future i think a lot of people would agree with that but they're just that they're the future not the present so 99 of the cars on the road today are still gas cars but the problem comes from how entirely unpredictable electric car launches have been for the past like half a decade to the point where if you put your money down for one of these things you really don't know exactly what you're going to be getting or when you're going to be getting it now a big part of this is the fact that there are so many new companies trying this like the car industry is mostly huge old companies but tesla's success has convinced a lot of people they can spin up a new electric car company too with their own little twist but the thing is making new electric cars is really difficult and really expensive and starting a new electric car company is even more difficult and even more expensive so i present to you the five-step guide for creating a new electric car company today and see if you can spot which one of these steps a lot of these new startups are getting stuck at so step one make a clever name with a great idea for an electric vehicle preferably something tesla hasn't already done yet and make a snazzy website to show off this cool idea you have step two become a company you know you're going to need an enthusiastic ceo a fun company culture maybe even poach some people from other successful car companies and start making this idea look very promising step three build one prototype so this is the key so you can you can build more for bonus points but all you really got to do is make one working version of this new vehicle you know if not all the high-tech features are working that's fine you just got to demonstrate the ability to build an electric vehicle then step four you gotta take this vehicle and use it to generate as much money as possible parade it around to generate attention show it off bring it to car shows let the press try it and you gotta put a pre-order button on your website so people who like the idea can give you a little interest-free loan but more importantly you can use the number of pre-orders to get big investors interested in getting on board so you look how much promise and interest the idea has you wouldn't want to miss out on an opportunity to invest in a next big electric car company right then step five ship it use the money you raised build a factory build the technology become a car company and ship it now spoiler alert pretty much all these companies get to step four but the gap between step four and step five is massive it's like that how to draw an owl tutorial like step one draw two circles step two draw the rest of the owl but it's really hard you have all these new companies coming up and making all this interesting stuff but then not getting to the last step and that gap has created so much distrust and confusion about what to expect when you put your money down for something you know it kind of reminds me of like smartphone launches i've talked about sony before you know when apple or samsung announces a new phone it's on stage and then two weeks later it's in the stores you can buy it and then sony's problem would be you know they'd announce a new phone and it would be kind of cool but then it wouldn't come out for six months and so by the time it actually did get released all the hype was gone the interest was gone people who were thinking about spending that money on that would spend it on other things and it would it would just fall apart now people are willing to wait a little bit longer in the car industry but it's just getting kind of ridiculous so i think my earliest experience with this was with faraday future some of you might have heard of them cool name very interesting company they nailed steps one and two and they showed me a functional prototype five years ago in 2017. it was super cool they showed it to me on the ces show floor and they drove people like me around in it and even did a 0-60 in 2.39 seconds [Music] that is legit not bad right so they kind of nailed step three so then they moved on to try to generate as much money as possible you know for the factory and the engineers and everything required to ship the thing and they've been stuck in this step ever since you know they did allow pre-orders which are still open by the way you can still give faraday future one thousand five hundred dollars to pre-order the ff-91 and they even went public which helped with capital so they've raised enough money and they've put together enough to be worth about two billion dollars now and that's still not nearly enough money to have actually made the factory and shipped anything will they ever get to step five will they ever actually ship an ff91 i remember another company called biten they had a pretty cool prototype i also saw them at ces this was about four years ago and this again made a pretty big splash i remember all the headlines from the show awesome presentation their site too is full of great ideas for a pair of vehicles that are presented as very realistic and very achievable they managed to raise 1.2 billion dollars from investors but they've gone silent they haven't tweeted in two years their website hasn't changed since 2020 and they certainly haven't shipped any cars and then canoe is another one of these companies they might ship something so they were they were founded in 2017 by some ex faraday future employees they eventually got hyundai and kia to announce they'd work with them on a new electric vehicle platform they got listed on the stock exchange and valued at 2.4 billion dollars now hyundai and kia look like they've pulled out but you can still go to canoe.com and pre-order one right now if you really want to but they haven't shipped anything yet either then like a week and a half ago i got an instagram ad for a company called atlas motors that i'd never heard of and out of morbid curiosity i clicked it and it is kind of wild their home page the home page immediately promises an electric vehicle platform that will help any company electrify their lineup and then a quad motor pickup truck with up to 500 miles of range that can charge up in 15 minutes but the biggest brightest button up at the top of their website is the invest button so if you like the idea that they've shown you enough you can get in at the ground level of this crowdfunding for what might be the next big thing apparently they're already worth nearly a billion dollars so they say they're going to be using the funds for equipment and machinery and research and development and administrative expenses and you know basically making a company but when will atlas motors actually ship anything i i don't know that's a great question and if you really want to see what a failed blueprint of trying to get through these five steps looks like look at everything lordstown motors has ever done so lordstown was founded in 2018 with this nice plan to make electric pickup trucks so they'd have in-hub motors in the wheels and they'd started around 52 thousand dollars seemed like a really cool truck nice idea they'd made some nice pre-production models to parade around and gather interest from fans and potential investors you could find a lordstown endurance truck at almost every conceivable auto show which is great for people pointing cameras at it so they got to step three take people's money and so they went over to gm and bought an old plant from them which got them interested enough that gm decided to invest 75 million dollars in this promising new company they went on to open pre-orders and got over a hundred thousand pre-orders and then with all this momentum they went public as a company and their evaluation soared to over five billion dollars but then unfortunately an investigation found that most of these pre-orders were fabricated not real plus they allegedly paid a company to place around a thousand pre-orders sick this company's pretty much been falling apart ever since lordstown today is somehow still worth hundreds of millions of dollars but i don't think they're gonna be shipping anything anytime soon but then the latest startup that you might have seen in the news was rivien now rivien looked like they had all the promise in the world because not only did they have a really good idea the r1t and r1s vehicles and not only did they have a great presentation and a hungry target demographic and a cool ceo but they actually seem to be getting real money together so they had a contract from amazon they got investment from ford they were getting billions and billions of dollars together and that seemed like they might be getting enough to scrape together to jump over to step five they might finally leap to be able to ship these new vehicles you know they got one of those pre-production trucks out to our studio here and i lived with it for two days and i was very impressed i love the thing enough to put in my own pre-order it had all kinds of cool features working software and honestly it's one of my favorite evs i've driven to this point but as you know it's easy to make just one it's easy to make just one but rivian's got enough money so they had they could do the r d they could build the factory and they could finally start actually shipping some of these slowly but they're shipping some real units to real users as we speak but even rivien has had a bumpy road you know with all the capital needed to start things up plus the wrench of the pandemic and the supply chain shortages being thrown into things even they a bit underestimated how much money they would need to make these trucks for people so a few days ago rivien decided to raise the price of all their vehicles by around twelve to fifteen thousand dollars and that included all of the trucks that all those people had already preserved so they wouldn't honor the price of those old pre-orders cue massive amounts of backlash which totally understandable the truck just went from 70 something thousand to nearly 100 grand but it must have been more blowback than they were actually expecting because rivien walked that back like 24 hours later so there is still a higher price for new orders if you were to order today but they let all the people who had those old pre-orders in stay in at the low price and they offered that low price back to people who'd canceled if they could just get back in line please so even rivien isn't immune to all this chaos but they have gotten the furthest in the five-step process to the point where they're now delivering cars and they've promised i think they've projected 25 000 cars to be delivered this year for context tesla delivered about a million cars last year ford delivered about four million cars last year so i think all this highlights how hard it is to get to step five on the master plan but some of you might be thinking wait okay what if you're not a startup maybe you don't need to go through the same five-step process but still even a lot of these more established companies are treating their new electric cars like kickstarters they might not just have to do the first two steps so these days i do see some volkswagen id4s i see some mustang mock ease i see some ionics out there on the road love to see it but then there's the ford f-150 lightnings of the world which they've definitely shown off they've brought one to the studio here you can pre-order one right now and they should hopefully be starting to ship in a few months and then of course tesla an existing car company pretty much followed the exact same blueprint with the cyber truck i remember the one famous working prototype doing some fun laps around new york city you know the pre-orders climbing into the millions which again is a few hundred million dollars of interest-free loans straight to tesla still not sure when this thing's gonna ship though and then of course i did the thing that i was talking about in the beginning of the video with the roadster that was back in 2017 it's been five years since they showed that car off and who knows when it's ever gonna ship so the moral of the story beware of these companies parading around working prototypes of electric cars while also taking pre-orders with far away delivery dates or unknown ship dates just that the combination of these things you should pay attention to it i'm still going to check out new electric cars when they get announced i want to see what kind of new stuff is out there but anytime i see a new eevee announcement i'm automatically going to add a couple years and several thousand dollars no matter who it's from okay that's it for my rant let me know what you guys think of all these all these new electric car announcements we've seen over the past couple years in the comments section below we'll hang out there either way that's been it thanks for watching catch you guys later peace [Music]

Channel: Marques Brownlee

Views: 2,035,775

Keywords: Rivian, Rivian R1T, Lordstown, electric car scam, MKBHD, Cybertruck

Id: a6zvvlrd-jw

Length: 13min 20sec (800 seconds)

Published: Wed Mar 30 2022

Reddit Comments

[u/AutoModerator]

Is something wrong with your vehicle or need help? Click here, use our stickied support thread, see r/TeslaLounge, Discord, hit up Tesla Support, or use the Service section in the Tesla app. Help the Mods by being respectful, and by reporting posts + comments which break the Rules. Thanks for being awesome!

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/nyrol]

The guy who started Atlis motors used to be my program manager/director at a previous company. He was an arrogant asshole who left to go start his own EV company, and the day he left he was like "I'm going to make a pickup truck EV that has 500 miles of range, and charges from 0-100% in 15 minutes" without ever consulting an engineer. He was like "I'm sure we'll figure it out". This was 5 years ago.

[u/fooknprawn]

I’m still waiting for my Roadsters from the referral program. First world problems

[u/mr-saxobeat]

Prototypes are easy, production is hard

[u/TakameCC]

This is true but $100 on the cybertruck maybe worth it (which I did) seems I have spent way more on rocket league if it was 1000 then absolutely not.

[u/Brutaka1]

This is why I don't pre-order anymore. I'll just wait for when the vehicle is out and purchase it then.

[u/finedrive]

How to be a millionaire:

1. Create Vaporware of cool EV
2. Accept preorders for non existent product
3. ???
4. Profit

[u/LoudSighhh]

The pre orders are problem but at least with Tesla I know they will release their product when they know it’s ready. If It takes the cyber truck another 3-4 years then fine. But if they do it right and show the world how it has to be done then that will change the world for decades fox come, we’ll worth the wait

[u/rebootyourbrainstem]

Is he still salty about his Tesla Roadster