Written by By Nate Joffe, CNN London, United Kingdom, Written by Alastair Jamieson, CNN
“Tesla is a giant company. We’re a huge company.”
And so Lyndon Rive, one of the founding members of Tesla and now its third and most senior executive, speaks with an unusual frankness when talking about his new company, a start-up called Lucid Motors.
Born and raised in Vancouver, Canada, Rive cut his teeth as a successful entrepreneur in the information technology industry. His first two companies were focused on powering the home with power: One, called AC4All, set out to make efficient electric refrigerator compressors; the other, DreamCuisine, was all about the power of drinkable water.
But Rive didn’t like the pace of business.
So, in 2013, he teamed up with his brother, Peter, who had left Tesla to take on the CEO role at SolarCity, founded in 2006 by Elon Musk. The company had major ambitions to be not just a renewable energy giant, but a disruptive force in the residential solar energy market.
Zooms into new zone
The Rive brothers never intended to launch a car company. But SolarCity had been taken over by Musk’s other company, Tesla, and, as the boss of both Tesla and SolarCity, the Silicon Valley billionaire was keen to strike up a new partnership with the Rive brothers.
It took a couple of years and a bit of pushing on Musk’s part, but eventually Tesla acquired SolarCity. But soon after the transaction, its newly formed subsidiary SolarCity decided to sell its sister company, SolarCity’s manufacturing plant in Buffalo, New York. The decision was controversial — Musk had his fingers in both pies. His proposed tariffs on imports would have caused upheaval at SolarCity, but the tax benefits also meant the purchase of the manufacturing plant was cheap. Tesla then auctioned the factory off to a Saudi businessman, who promptly shut it down.
Lucid Motors then found itself at a crossroads. Could it make a dash for the future with a car company to rival Tesla?
“Basically, we came to this conclusion as if we are a single company: to know what the path is for the next five years, seven years, or 10 years. Tesla has been like that; Tesla moves to the future, Tesla knows what’s going to happen five years from now, seven years from now. For us, we say we are not a long-term plan, we are not a legacy; we are a learning organization,” says Lyndon Rive.
Latterly established in the Los Angeles suburbs, Lucid’s ambition is big. It wants to make 100,000 cars by 2023. That’s twice the number of electric vehicles that automakers made in all of 2017 — a new record.
Revolutionizing an industry
The new CEO is led by former Tesla operations and customer service boss Scott Rive, who thinks the existing auto industry is facing the largest opportunity in the past century. What is standing in the way?
“Under the current business model, I think almost everybody agrees that there is no money to be made in these cars today,” says Scott Rive.
“The cost of producing a new car is around 40% of the total cost of the car, and if you look at all of the resources that are being pumped into developing battery technology, the technology that is required to build the vehicle — both the way it’s constructed and all of the areas — there’s just no way that these automakers have the money to be investing in these areas.
“Everyone has a strategy but very few things are out there that are substantially different — or substantially better,” he adds.
“When you look at how one of the most cost-efficient batteries in the world is going to the automotive industry as a cost substitute, when you consider all of the different areas — in production, in maintenance — that need to be invested in, the idea that they have the cash, it just doesn’t make sense for them.”