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Saturday, Mar 2, 2024

How LA’s EV Hub Is Charging Ahead With Manufacturing, Innovation

Few industries are primed for quicker growth over the next decade than the electric vehicle sector.

According to industry tracker EV Adoption, plug-in electric vehicles accounted for just 3.9% of total new auto sales nationally in the second quarter of 2021. The California New Car Dealers Association reported that EVs accounted for 7.8% of new auto sales statewide over the same period.

Despite these relatively small percentages, most auto industry analysts expect EVs to eventually dominate the car market — particularly in California where state climate targets bar sales of gas-powered passenger vehicles after 2035.

An array of companies in L.A. County, from vehicle manufacturers and battery-makers to charging infrastructure providers, are gearing up to benefit from this seismic shift in the auto market.

A 2020 report from the Los Angeles County Economic Development Corp. identified the growing cluster of businesses operating in Southern California’s electric vehicle industry as a “new automotive ecosystem” that already accounted for nearly 120,000 jobs in 2018.

“It’s amazing how many companies we have,” said Judy Kruger, senior director of strategic initiatives and cluster development for LAEDC. “And in this industry, there is so much room for growth.”

Among the many local players are upstart vehicle developers such as Torrance-based Canoo Technologies Inc., Manhattan Beach-based Fisker Inc., Gardena-based Faraday Future Intelligent Electric Inc., Glassell Park-based Xos Inc. and downtown-based BYD Motors Inc. along with vehicle charging and infrastructure companies such as Sawtelle-based EVgo Inc., and Chargie and Envoy Technologies Inc., both based in Culver City.

EV loves CA

Kruger said the development of such a large cluster of electric vehicle companies is the “cumulation of good policy” in California, from early environmental legislation in the 1960s to the emissions targets announced by Gov. Gavin Newsom in 2020.
Southern California also boasts a large pool of engineering and design talent, Kruger pointed out. And it’s already a major base of operations for traditional automakers including American Honda Motor Co. Inc. and Hyundai Motor America, which are also developing electric vehicles.

“I used to live in Michigan, and California has had such a leg ahead of other regions in terms of EVs,” Kruger said.

Canoo Chief Executive Tony Aquila said Southern California’s unique history of industrial and technological innovation has made it an appealing place for forward-looking industries.

“People either live in the past, the present or the future,” he said. “Every once in a while, you have these marketplaces where all three cohabit productively, and it becomes part of the ethos of that environment.”

Aquila said the Los Angeles area is likely to remain an important center for the industry even as local EV companies expand operations beyond the region in order to ramp up production and serve a global market. Canoo, for example, will center initial production of its vehicles in Oklahoma while contracting with a Dutch company to manufacture vehicles for the European market.

Still, a few companies have bucked the trend of moving production outside of the Los Angeles area. Since 2014, BYD has been manufacturing electric buses at a facility in Lancaster, and last year, Burlingame-based Proterra Inc. opened its own bus manufacturing facility in City of Industry.

Vernon-based EV battery manufacturer Romeo Power Inc. has also centered production locally and recently announced it had leased a new 215,000-square-foot manufacturing facility in Cypress.

Giordano Sordoni, co-founder and chief operating of Xos, said he and co-founder Dakota Semler both grew up in Southern California, so starting the company here was an easy decision.

“I don’t think people realize how much industrial and manufacturing knowledge there is in L.A. With the history of aerospace and the ports, Los Angeles is really part of an industrial hub,” Sordoni said.

Sordoni said the city’s well-known smog also served as an inspiration for Xos, which manufactures electric commercial trucks. Delivery trucks and vehicles designed for goods movement play an outsize role in the production of transportation emissions.
“From air quality and emissions to (greenhouse gases), it’s those medium- and heavy-duty trucks that need replacing if we’re going to hit our air quality goals,” said Sordoni.

‘Arms race’

Xos has already begun manufacturing trucks at a facility in Tennessee (though battery packs are assembled in Los Angeles), and in recent years, the company has announced contracts with major fleet operators such as FedEx Corp., Loomis Express and United Parcel Service Inc.
Canoo, which launched with a focus on passenger vehicles, announced last year that it would develop its own line of commercial vehicles, starting with a multipurpose delivery van. In March, the company revealed plans to build pickup trucks as well.
Aquila said the company aims to “hit all of the use cases” for its technology as it navigates an increasingly competitive market.

Not only must fledgling companies in the EV industry compete with one another, they must also keep up with traditional automakers, which are now investing heavily in electric vehicles — not to mention industry giant Tesla Inc.

“It’s an arms race,” Aquila said. “We’ve been really focused on getting ourselves ready for bigger production.”

Fisker is also preparing for production to start on its vehicles (both Canoo and Fisker aim to start production by the final quarter of 2022), but the company has so far remained focused on consumer-oriented vehicles like its Ocean SUV model.

Founded by luxury car designer Henrik Fisker, the company is committed to high-caliber design, said Senior Vice President of Communications Simon Sproule.

Sproule said one area in which newer EV companies have an advantage over traditional automakers is in the ability to adapt quickly to changing consumer behaviors, tailoring both vehicle design and pricing options to customer demands.

Like many other EV companies, Fisker will sell its vehicles using a direct-to-consumer model that includes subscription pricing options and vehicle delivery.

Sproule said selling products in this way reinforces the concept of electric vehicles as an entirely new type of vehicle and driving experience — one that may eventually prove irresistible.

“We certainly see EV adoption as going only one way, which is up,” Sproule said. “EVs are not the exception anymore.”

All Systems Go

Los Angeles is a growing electric vehicle hub with dozens of companies contributing to advancing technology and sales in the industry. The EV market is projected to be worth $2.5 trillion by 2027 with a compound annual growth rate of 34%, according to a Meticulous Research report published in July.

Auto industry analysts expect EVs to dominate the car market sooner rather than later, and California is contributing to the industry’s momentum by setting aggressive climate targets and policies. With the state’s 2035 deadline to eliminate sales of gas-powered passenger vehicles in mind, local manufacturers, suppliers and service providers are gearing up to meet industry and consumer needs.  

The Business Journal takes a bird’s-eye view of the players in this dynamic hub.

1. Faraday Future Intelligent Electric Inc. 

BUSINESS: EV manufacturer
CEO: Carsten Breitfeld
FUNDING TO DATE: $2 billion
MARKET CAP: $4 billion
UNDER THE HOOD: Faraday Future had a rocky first five years and abandoned plans for a $1 billion factory in Nevada. But the beleaguered company is bouncing back after going public in July through a reverse merger with Property Solutions Acquisitions Corp. The deal gave Faraday a $3.4 billion valuation and netted the business roughly $1 billion. The company expects to release its first electric vehicle within the next 12 months. 

2. Fisker Inc.

HEADQUARTERS: Manhattan Beach
BUSINESS: EV manufacturer
CEO: Henrik Fisker
MARKET CAP: $4.3 billion    
NET LOSS: $176.8 million (Q1 2021)
UNDER THE HOOD: Fisker develops and sells luxury electric vehicles. In October, Fisker merged with Spartan Energy Acquisition Corp. and went public through a blank check company merger, giving it a valuation of $2.9 billion and making $1 billion from the deal. Ocean, the company’s first vehicle, is set to roll off the assembly line in late 2022. The company is also planning to release a climate-neutral vehicle by 2027. The company is aiming to promote a circular economy by sourcing recycled materials and remanufactured components and working to utilize public charging points running on 100% renewable energy, according to a statement by Chief Executive Fisker.

3. Xos Inc.

BUSINESS: Commercial EV truck manufacturer
CEO: Dakota Semler
FUNDING TO DATE: $240 million
MARKET CAP: $718 million
UNDER THE HOOD: Xos provides Class 5 to Class 8 battery-powered commercial vehicles with environmentally conscious designs. In August, the company went public through a reverse merger with NextGen Acquisition Corp., gaining a valuation of $2 billion from the deal. The company also recently inked a deal with FedEx Corp. to deliver 120 zero-emission electric trucks to 35 FedEx Ground operators. The company’s trucks are tailored for commercial fleets focusing on last-mile delivery. 

4. Battle Motors Inc.

BUSINESS: Electric garbage and delivery trucks
CEO: Michael Patterson
REVENUE: $140 million to $180 million (est.)
UNDER THE HOOD: Battle Motors was formed in March and then acquired Crane Carrier Co.’s production line for EV trucks in Ohio.   

5. BYD

U.S. HEADQUARTERS: Downtown; factory
located in Lancaster
BUSINESS: Electric bus manufacturer
CEO: Wang Chuanfu
ANNUAL REVENUE: $23 billion (2020)  
UNDER THE HOOD: The company is working with Levo Mobility to deploy up to 5,000 EVs.

6. Greenlots

BUSINESS: EV charging stations
CEO: Brett Hauser
FUNDING TO DATE: $13.8 million
UNDER THE HOOD: Greenlots has projects in 13 countries. The company was acquired by Royal Dutch Shell in 2019 for an undisclosed sum.

7. EVgo Inc.

BUSINESS: EV charging stations
CEO: Cathy Zoi
MARKET CAP: $2.1 billion
ANNUAL REVENUE: $4.8 million (Q2 2021)
UNDER THE HOOD: EVgo has more than 800 charging stations across 34 states. 

8. Tesla Inc.

HEADQUARTERS: Palo Alto; design center
located in Hawthorne
BUSINESS: EV manufacturer
CEO: Elon Musk
ANNUAL REVENUE: $31.5 billion
UNDER THE HOOD: Tesla is moving its headquarters to Austin, Texas.  

9. Webasto Charging Systems Inc.

BUSINESS: EV charging products
CEO of Webasto Group: John Thomas
ANNUAL REVENUE: $26.4 million
UNDER THE HOOD: Webasto Charging Systems is one of Webasto SE’s 109 subsidiaries.

10. Canoo Inc.

BUSINESS: EV cars, trucks and sport vehicles
CEO: Tony Aquila
EMPLOYEES: Nearly 500
MARKET CAP: $2.4 billion
NET LOSS: $15.2 million (Q1 2021)
UNDER THE HOOD: Canoo announced plans this summer to open manufacturing facilities in Oklahoma and Texas. It went public in a reverse merger, raking in $600 million from the deal.

11. Romeo Power Inc.

BUSINESS: Makes lithium-ion batteries for EVs
CEO: Lionel Selwood
ANNUAL REVENUE: $11 million
UNDER THE HOOD: Romeo was one of several electric vehicle-related companies that closed SPAC deals in 2021.


BUSINESS: Electric bike delivery service
CEO: Charles Jolley
FUNDING TO DATE: $5 million
UNDER THE HOOD: The company’s electric-powered, collapsible moving containers on bikes can carry up to 800 pounds of cargo for last-mile delivery services.

13. Bird Rides Inc.

BUSINESS: Electric scooter and e-bike rentals
FOUNDER: Travis VanderZanden
FUNDING TO DATE: $776 million
UNDER THE HOOD: Bird is deploying its more durable Bird Two Scooter models in L.A. and other cities. The company plans to go public.

Car Manufacturers

14.  American Honda Motor Co. Inc.,      
15.  ElectraMeccanica, inspection
      facility in Studio City, dealership in      
      Sherman Oaks
16.  Eli Electric Vehicles Inc., Long Beach
17.  Karrior Transelectric, Gardena

Charging Systems Providers

18.  AC Propulsion, San Dimas
19.  EV Connect, El Segundo
20.  EV Safe Charge Inc., Downtown

Electric Micromobility Companies

21.  Electric Car Sales and Service,
      Long Beach
22.  Razor USA, Cerritos
23.  Wheel Labs Inc., West Hollywood

EV Rideshare Companies

24.  Envoy Technologies Inc., Culver City
25.  Waive Car, Santa Monica

EV Parts Suppliers and Battery Makers

26.  Icon 4×4, Chatsworth
27.  NewHydrogen Inc., Santa Clarita

Electric Aviation Companies

28.  Surf Air Mobility Corp., Hawthorne
29.  Wright Electric Inc., Toluca Lake

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