How Faraday Future’s former ‘savior’ plans to take on the EV market

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As Faraday Future moved toward what looked like a secure conviction late last year, the man who was hired to fix the company's financial problems resigned. He was tired, according to former employees, of facing the resistance of the company's founder (and now CEO) to his suggestions on how to stop financial bleeding. In the following weeks, that man, Stefan Krause, a former BMW executive and Deutsche Bank, was in negotiations to return to Faraday Future if certain demands were met. But when the two sides could not come to an agreement, Faraday Future issued a public excoriating (and unbearable) attack on Krause and CTO (and his former BMW executive) Ulrich Kranz, who claimed that the two were fired for "embezzlement and neglect." of duty ""
From the ashes of that relationship, Krause and Kranz founded, what else? – a new EV startup based in California called Evelozcity, Inc. Krause, which many previous Faraday Future employees told me that last year was often referred to as the company's "savior" during their time there due to the ruthless financial efficiency that kept Faraday in the air. I tried to keep Evelozcity a secret in the months since he gathered talent and formed a business plan. But a number of former employees of Faraday Future were separated to occupy the first positions of Evelozcity, and a lawsuit quickly put the startup in the spotlight. Faraday Future accused Krause, Kranz and other former employees of Waymo v. Uber of stealing trade secrets in the lawsuit, and alleged that the two executives founded Evelozcity essentially with stolen employees, claims that the new company called it "recklessly inaccurate".
With the bandida running away, Evelozcity is now trying to make its own story, and the startup made Krause, who now runs the show, available for interviews last week to a handful of outlets around the world, including The Verge. .
During the conversation, which covered the specific and broad strokes of the Evelozcity plan, Krause made it clear that he wants to make an affordable electric car with Evelozcity. But he also wants to do much more than that.
Three different electric vehicles, all built on the same platform
The main objective of the company is to design a "skateboard" that contains all the battery and electric transmission / propulsion technology, which will then be shared by three different types of "cabins" of vehicles. That includes a commuter car, a car intended for autonomous driving -sharing, and a small pickup truck for deliveries.
The first vehicle designed by Evelozcity -Krause will not say which one yet- will come to the market in 2021, and the others will be left behind. The company will begin in the USA. UU., Attempting to sell the consumer vehicle directly, while launching the vehicle with van and shared vehicle to other companies. Evelozcity will then expand to the markets of China and Europe.
All three of these vehicles will have a range of at least 250 miles, says Krause, and will also be built each with a high level of autonomy in mind. The company is developing its own battery design, as well as the software to manage it, but is already working with external engineers and vendors to develop the stand-alone technology, says Krause.
"We have the philosophy of really trying to buy as much as we can from the suppliers, and the source, because that's where we think the industry will go more and more," Krause told The Verge. "Suppliers are moving in this space and offer complete solutions."
So far, Evelozcity has only had one big "design session", says Krause, but he already expects the company's vehicles to look very different from the electric vehicles that are on the market or that make fun of them.
"We want to stop building an electric vehicle that looks like a car with a combustion engine."
"We want to get away from building an electric vehicle that looks like a car with a combustion engine," he says. "If you look at most of today's electric vehicles, they still look like the architecture of a car with a combustion engine, and many of them still have a place for an engine, even though there is no longer an engine."
This has led to EVs carrying the same traditional "three-box" design that has existed since horse and crate times, said Krause, where the engine goes forward, the passenger cabin is in the middle and a cargo compartment. storage in the back.
Taking advantage of the extra space that is usually given to an engine, while also moving most of the technology from the car to the skateboard, the Evelozcity designs will have an outstanding appearance and more space inside, says Krause. "If you do not have an engine in the front, and the front of the vehicle really only deals with the requirements of the collision test, you can think about the appearance of the cars differently. And you can use the space [cabin] in the top of the skateboard much better. "
Another way Evelozcity will be different, says Krause, is that unlike other EV startups such as Tesla or Faraday Future, the company will not build its own cars. "We believe that the future is based on contract manufacturing and working with partners in terms of vehicle production," he tells The Verge. "The focus [company’s] focuses primarily on design and engineering and sales and marketing, not so much on production."
The CEO of Evelozcity did not disclose how much funds the company has raised so far, but said it is enough for the company to go into production. "The number that is needed [to get to the start of production] is roughly around $ 1 billion," he says. "Those are the numbers that are floating around how much you need to go that way, and it's not different for us, it's around the same stadium."
As the company does not intend to produce its own vehicles, Krause says it only expects to need a maximum of 350 employees next year. Currently, the company has around 100 employees, a group that includes the former head of design of Faraday Future, head of vehicle line, director of vehicle engineering and head of interior and exterior design.
The accusations launched by Faraday Future speak of a greater truth when it comes to acquiring talent in the electric vehicle industry: although it is still young, it is a hypercompetitive market for qualified employees.
"We are not looking for luxury cars, high-end sports cars … we believe that the optimum point in the market is around $ 35,000."
Krause says Evelozcity has attracted its first employees because the company already has a good strategy, and has secured the funds to support it. "I think people are liking our story," he says. "We do not look for luxury cars, high-end sports cars: we look for a car that reaches the optimum point of the market with a price that will be competitive below $ 50,000.We believe that the optimum point in the market is around $ 35,000 "
Nor is it wrong that it has established its headquarters in California (Los Angeles, to be exact), which has become a hotbed for new electric vehicle companies. "In recent years, there has been some cluster development in the electric vehicle industry between Los Angeles and San Francisco," says Krause. "He finds many of the suppliers and companies that are dedicated to this space in this area, so he has access to partners, he has many technology companies working in [the same things] and he has many new companies."
Of course, the other side of being in these physical and figurative spaces is that companies like Tesla or Apple have almost the same probability of robbing their staff. Krause says that Evelozcity is expected to lose some talent along the way. "We will have a fluctuation, sure, we will focus, and some of our employees can get good offers, I think it's just a problem that we have to face as an industry," he says. "I think we'll be protected for a while as we develop this and that people build their resumes, but I'm sure it will still be competitive later on, and I'm telling you that the compensation levels in the EV industry at this time are certainly increasing, and that will continue, especially once the big manufacturers start to persecute these people as well. "

The Chinese government's attempts to curb the pollution of fossil fuels have led to aggressive incentives and policies that encourage the development of EV. Photo by VCG / VCG through Getty Images

Those major automakers have made various commitments to add electric cars to their fleets in the coming years, most of them in billions of dollars. And there is an express emphasis on these new investments in the sale of these new electric vehicles (and hybrids) in Europe and China, where governments are trying to more actively remove cars from combustion engines. Many of these top-tier automakers already sell cars in China, but are also looking for joint manufacturing companies with Chinese automakers to produce electric vehicles in the country, a requirement if they want to take advantage of the largest electric car market without suffering major ups and downs. import tariffs.
Meanwhile, EV startups appear to emerge daily within China as the country's auto industry matures. Some, like NIO or SF Motors, have already arrived in the United States.
China will probably be the main EV market for a while
Krause also wants to sell Evelozcity cars in China, but he does not think all this competition is limiting. "The market will be big enough to see hundreds of companies go to the starting line, and then we will all enter the race," he says. "If it is a fair competition, the best can win, and over time we will see consolidation, we will see some companies disappear, for us and our investors, if it is consolidation, that means M & A [mergers and acquisitions] opportunity, which means exit opportunities for investors, it really means good news. " He also says that he would be willing to find partners to work in China in order to crack the market there by producing within the borders of the country.
Finding success in China may be the real key to Evelozcity. EV sales are on the rise here, but they only accounted for 1.2 percent of the overall car market in 2017. EV's market share in China was three times higher. It is also expected to grow: 40 percent of the global investment in electric cars is happening in China, and the country is expected to account for 50 percent of EV global sales until 2030. Meanwhile, the federal EV tax credit in the USA UU It survived to be excluded from the recent tax bill, and renewable energy (and subsidies for it) has a new opposition at the highest levels of government after the 2016 elections.
Krause does not worry if the tax credit will be available when Evelozcity hits the market. And some volatility is expected in the market, he explains. What really worries him is whether or not there is a "change in attitude towards electric vehicles" when it comes to potential customers in markets like the United States. "I think that over time, if consumers want it and people in the country want it, the political reality will adjust to it," he says.
This is also where the small delivery van and autonomous ideas come in to share the trip. Krause has designed Evelozcity to be flexible in ways designed to help the startup survive what is a long list of unknowns. But that does not mean I'm not sure if you bet on the right ideas. "I'm seeing: will consumers want these products in the future? Will there be a strong demand for these types of products in the future? And the answer to these questions is definitely yes, and definitely a global yes too."
The name, an acronym of "EV", speed and city, could leave behind one day
Asked if Faraday Future is finally behind him, Krause reiterates that he can not comment on specific details considering the latest lawsuit. "We continue to hire, and we continue to work on our project, and that should tell you that we are not worried about this," he says. "I support my statement that these are false and desperate accusations that are coming in. For us, in addition to having to deal with some lawyers, it has not been a great distraction."
And finally, the name of the company? It's an acronym for "EV", speed and city, which Krause says he likes because "it somehow describes, with just the name of the company, what we're doing." But even he understands that it is not exactly about the language. Over time, the company's products, and maybe even its brand, could be different, he says.


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