One of the biggest questions about the electric-vehicle market in the United States is how many startups will survive. This is partly because of the Trump administration’s antagonistic attitude toward EVs, but over the last year the field of contenders was already contracting.
Canoo ceased operations in January (Miller, 2025). Fisker closed down in October (Pickavet and O’Kane, 2024). And earlier last year Lordstown Motors Corp. emerged from Chapter 11 bankruptcy as Nu Ride Inc. (O’Kane, 2024).
A Wharton School analysis found that vertically integrated automakers such as Tesla and the Chinese automaker BYD had the greatest potential to survive, but other startups with strong financial backing could as well (Parameshwaran, 2024). Who has the best prospects?
Will Rivian join Tesla in crossing EV ‘Valley of Death’?
At least at this point Rivian may have the best chances, both because it plans to launch a lower-cost R2 model next year and recently agreed to a $5.8 billion joint venture with Volkswagen (Norton, 2025). Lucid’s future looks more tenuous even though it is launching a new luxury sport-utility vehicle as well as a lower-priced model (Ebiefung, (2024).
Tesla may have successfully navigated what has been called the EV “Valley of Death,” which has been defined as the “gap in revenue and income between the cost of developing a new product and large-scale sales” (Gaton, 2024). However, Tesla’s image has recently taken a hit due to the hotly controversial role its head, Elon Musk, has taken in the Trump administration.
Also see ‘Jay Leno gives Tesla a helping hand in its time of need’
Automotive News reported that a recent poll found a “polarization of attitudes toward the billionaire entrepreneur reflects the political divide in the country, with 76 percent of Democratic voters in November expressing an unfavorable opinion of the Tesla CEO and 74 percent of Republican voters rating him favorably.” This could be problematic for Tesla because Democrats are still more likely to consider an EV than Republicans. Tesla’s US registrations fell 4.8 percent in 2024 while other EV brands grew 31 percent (Iliff, 2025).
So will the future belong to legacy automakers who have already achieved decent economies of scale and have the flexibility to adjust their mix of gas-powered, hybrid and electric vehicles as market conditions and government policies shift?
Rivian head talks up forthcoming R2 as key to success
In a recent interview, Rivian head R. J. Scaringe put on a brave face, arguing that the launching of the R2 sometime in the first half of 2026 could allow the automaker to significantly ramp up its production (Safian, 2025).
Perhaps the most interesting part of the interview was how Scaringe steered clear of criticizing Musk’s role in the Trump administration, instead suggesting that he could be a helpful influence.
“It’s good to have an important leader in the electric vehicle space with very close access to the administration,” Scaringe stated (Safian, 2025).
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RE:SOURCES
- Ebiefung, Will; 2024. “Where Will Lucid Stock Be in 5 Years?” The Motley Fool. Posted Dec. 7.
- Gaton, Bryce; 2024. “How Volvo crossed the Valley of Death in transition to all electric cars.” The Driven. Posted July 8.
- Iliff, Laurence; 2025. “Elon Musk’s role in Trump’s administration splits Tesla’s image along partisan lines, study says.” Automotive News. Posted Feb. 18.
- Miller, Caleb; 2025. “Canoo Files for Bankruptcy, Ending Its Dream of Funky EV Vans.” Car and Driver. Posted Jan. 21.
- Norton, Kit; 2025. “Is Rivian Stock A Buy Or A Sell Going Into Q4 Earnings?” Investors.com. Posted Feb. 19.
- O’Kane, Sean; 2024. “Lordstown Motors comes out of bankruptcy with a new name to fight Foxconn.” TechCrunch. Posted March 15.
- Parameshwaran, Shankar; 2024. “Who Will Survive a Shakeout in the Electric Vehicle Market?” Knowledge at Wharton. Posted May 28.
- Pickavet, Henry and Sean O’Kane; 2024. “The fall of EV startup Fisker: A comprehensive timeline.” TechCrunch. Posted Dec. 26.
- Safian Bob; 2025. “The future of Rivian & the EV market.” Rapid Response. Posted Feb. 18.
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