Autonomous vehicle technology and electrification startups were once the darlings of the VC and corporate world. The two technologies promised billions of dollars in revenue — and a new pathway for automakers to make money beyond building and selling cars.
Those VC-money-printing days have been over for AVs for a while now, with a few exceptions like Waymo and Wayve. But as 2024 kicked off, there was still a lingering EV buzz in the air, albeit quieter than before.
Now, as 2024 draws to a close, it’s safe to say that buzz is more of a whisper, with several EV startups faltering and automakers readjusting their investment plans.
EV demand started softening in 2023, and even though sales volume has overall increased, the pace of growth has been far below what was expected. In 2024, automakers responded. Ford pivoted its plans, which included abandoning a plan to make an all-electric three-row SUV and opting instead to power those future vehicles with hybrid powertrains. GM, which had already pulled back EV spending in 2023, made more moves in 2024, most recently offloading 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 paused plans on EV battery factories.
Toyota’s often-criticized approach to go slow on EVs and continue to prioritize gas and hybrid vehicles now looks like the smart move.
The results weren’t great for EV startups either.
Meanwhile, AVs had their hypey moment in the VC sun a few years ago before reality hit: It turns out driverless cars are hard, the business model isn’t proven, and those backers might not have the patience for a long-term pre-revenue bet.
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 necessary to commercialize their tech. Others stuck with big-name automaker backers. There were setbacks for both strategies in 2022 and 2023, prompting a last scramble for survival: the pivot.
AV startups that were once focused on opportunities in driverless cars tried applying their tech to warehouses, mining, and agriculture. But it turns out those areas were already hopping with competition. Others stuck to their original mission, but turned into dual-use companies because defense tech i …