Zhitong Financial APP learned thatSome commercial electric vehicle start-ups are now engaged in a "money-burning race"-scrambling to bring freight trucks or trucks to market before the money is completely exhausted, otherwise customers are likely to continue to buy traditional cars or electric cars from traditional carmakers such as F.US or GM.US.

Driven by investors' desire to create the "next Tesla, Inc.", some commercial electric carmakers on both sides of the Atlantic have gone public through reverse mergers with SPAC, raising hundreds of millions of dollars from the capital markets in an attempt to emulate the success path of Tesla, Inc. CEO Elon Musk. These include startups like Arrival Inc, Canoo Inc (GOEV.US), Lordstown Motors Corp (RIDE.US), Electric Last Mile Solutions (ELMS) and REE Automotive Holding Inc (REE.US).

But investors are disappointed with the development of electric car start-ups and their ability to compete with traditional automakers, causing their share prices to fall to a fraction of their peak level. This increases the pressure on these startups to quickly produce functioning vehicles, and in the auto industry, launching a car from research and development to final delivery can cost about $1 billion.

Daniel Barel, chief executive of REE Automotive, an Israeli electric chassis manufacturer, said:"at this stage, it is very important for customers to get the actual vehicle.The company has tested its customers near Detroit and will launch a prototype of a British freight car this week. "only in this way can they make a real decision to buy." The REE chassis uses "corners" or independent in-wheel motors to install brakes and steering on all or part of the wheels of the electric vehicle, eliminating the need for axles or power transmission, thus freeing up more space inside the car.

In order to enter the market faster, REE works with traditional suppliers, such as motors from American axis and brakes from Brembo (BRBI.MI) in Italy. Companies such as EAVX and Morgan Olson, owned by commercial vehicle body maker JB Poindexter & Co, will provide standardised bodies for REE's American trucks.

Peter Dow, vice president of engineering at REE's Nuneaton Engineering Centre in the UK, said: "We want to remain loyal to our goals and let others bring their expertise to other areas."

Time is getting more and more tight.

REE's share price is understood to be nearly 90 per cent lower than it was when it made its debut in July 2021. As of the end of MarchThe company has a cash flow of $239 million and is expected to invest up to $120 million in 2022 to expand production in 2023.

Showing a test car near Detroit, Barel, the company's chief executive, said: "our plan is under way, we are within budget and we have everything we need to bring it to market." He added that REE had enough cash flow to support it by the end of 2023 or beyond.

However, some electric car startups are still struggling. ELMS filed for liquidation in June, citing a lack of funds, while Lordstown had to sell its assets to Foxconn, a Taiwanese contract manufacturer.

In May, Canoo expressed "serious doubts" about its ability to stay in business, but WMT.US recently ordered about 4500 cars, which gave a big boost to Canoo's financial statements and share price.

Financing is becoming more and more difficult, and traditional car companies are pressing step by step

Dakota Semler, CEO of Los Angeles-based Xos (XOS.US), said: "the current market is not an ideal financing market." Xos already has about 200 electric trucks operating on US roads, with customers including delivery contractors such as Amazon.Com Inc. As of the end of March, Xos had $132.7 million in cash and could raise another $125 million through a share acquisition with a subsidiary of Yorkville Advisors, the US investment firm.

In addition, established carmakers are also stepping up mass production.FedEx Corp (FDX.US) has 150 BrightDrop electric trucks transporting goods around Los Angeles.

Mitch Jackson, FedEx Corp's chief sustainability development officer, said the company had ordered 2500 BrightDrop trucks, thanks to a combination of the technology of an 18-month-old company and the manufacturing capabilities of traditional car giant General Motors Co.

New entrants to the industry have clearly noticed this. Bedeo, a British electric car start-up that makes the electric power system for trucks for Stellantis NV (STLA.US), the world's fourth-largest carmaker, said earlier this year that it was in talks with investors to produce its own brand of trucks.

Although vehicles with Bedeo powertrains have a history of more than 50 million kilometers (31 million miles), executives say investors are still cautious about competing with Ford's electric trucks.

Andrew Whitehead, CEO of Protean Electric, a unit of Bedeo, said:"it is very difficult to raise money on a large scale at the moment."

Osman Boyner, chief executive officer of Bedeo, said the company will start retrofitting existing diesel vans with Protean's hub electric motors later this year, so that they can drive in electric mode in cities with low emissions and use diesel on long trips.

Bedeo is also in talks with traditional carmakers to produce about 5000 small, specialized vans for them. "the big carmakers don't want to do this," Boyner said. These figures are too small for them, but they are huge for a company of our size. "

Adequate financial support is very important

Rivian (RIVN.US) said earlier this year that $16 billion in cash by the end of March was enough to finance its second plant in the US, which is scheduled to start production in 2025. But the company announced at the end of July that it would cut costs by 6 per cent.

Amazon.Com Inc has ordered 100000 trucks from Rivian, but the company's share price has fallen more than 80 per cent from its peak shortly after the initial public offering in November 2021.

As of mid-July, Arrival held about $500m in cash, down nearly 45 per cent from about $905 million at the end of 2021. Its share price is nearly 93% lower than it was when it went public in March 2021. John Wozniak, chief financial officer, said in a statement that the restructuring would continue to fund Arrival operations until the end of 2023.

The startup has begun a phased trial with United Parcel Service Inc Services (UPS.US), which has ordered as many as 10, 000 Arrival vans.

Wozniak said: "We believe that we will continue to obtain funding from many different sources. " "however, the terms may not be very favourable, and the amount and timing are still uncertain, which is why the company announced measures to preserve cash."

Startups that avoid going public through SPAC mergers are now waiting for the market to improve. In February, Stockholm-based Volta Trucks raised 230 million euros ($235 million) to increase production of electric trucks.

Duncan Forrester, a spokesman for the company, said Volta has provided customers with prototype trucks and is expected to start mass production in early 2023. The company has orders for more than 6500 trucks worth about 1.4 billion euros. By late 2023, Volta may seek to raise more money for mass production through new financing or initial public offerings (IPO).

Forrester stressed: "from the perspective of investors, this will be a different conversation because we will be able to show the record of bringing cars to market."