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EV startup AEHRA takes on Tesla, others with exciting design; ex-Lamborghini man at work

Elon Musk’s Tesla paved the way nearly two decades ago. Now the global transition to all-electric vehicles is littered with startups.

Elon Musk’s Tesla paved the way nearly two decades ago. Now, the global transition to all-electric vehicles is littered with startups inspired by a new era in mobility and drawn by the lower cost of building EVs compared to their fossil fuel-guzzling ancestors.

Gone are the multi-billion dollar investments that have made legacy auto-making such a cash cow. Suppliers provide off-the-shelf generic electric platforms and manufacturers can take on contracts for assembly – approaches that translate into job and infrastructure savings.

What was missing from the new EV formula, according to a Milan-based startup, AEHRA, is a fresh design concept.

“Electric vehicles are considered boring by the general public,” said Hazim Nada, CEO of AEHRA. “It’s very easy to build an extremely powerful electric vehicle. It’s not that easy to build an electric vehicle with character. And I think that’s one of the elements that should express the Italian character.”

Nada has hired a former Lamborghini designer to give his vehicles Italian emotion, emphasizing aerodynamics over performance.

But the company wants to enter an increasingly crowded market of EV startups and traditional automakers being pushed to tackle car emissions that contribute to climate change. Some startups have had little success.

AEHRA does not plan to launch its first vehicles — an SUV and a sedan — until mid-2025, with annual production of 20,000 to 25,000 vehicles. The ultra-premium cars also plan to have a price tag to match: $160,000 to $180,000.

They are expected to be rolled out first in the United States and key European markets before expanding to China. That would follow an initial production investment of 700 million euros (dollars).

“We don’t spend much,” said Nada. “This is due to the fact that we develop the materials in such a way that the production chain is very light compared to existing production methods.”

Nada made most of the seed money trading crude oil in London and deepened his passion for aerodynamics by building the world’s largest vertical wind tunnel, AeroGravity, an attraction north of Milan where anyone can experience a free fall.

While AEHRA’s cars are for rich demographics as inflation bites the middle class and low-income earners, battery-powered vehicles have generally gained wider consumer acceptance and governments are pushing automakers away from combustion engines.

US wealth management and research firm Bernstein predicts that a quarter of all cars sold will be battery-electric or plug-in hybrids by 2025, doubling by 2030. It cites ambitious rollout schedules and regulatory support.

The European Union will ban the sale of new cars that run on fossil fuels by 2035, creating new entrants with lower start-up costs, while potentially punishing older automakers who have invested billions in hybrids as bridging technologies.

According to the European Automotive Manufacturers Association, battery electric vehicles recorded the strongest growth of all fuel types in the third quarter, up 22 percent to more than 259,000 units. That is good for a market share of 12 percent.

The US market share is smaller, around 6 percent, but Bernstein expects this to accelerate significantly with US policies such as stricter fuel efficiency standards.

As interest grows, dozens of new startups are entering a crowded market alongside pioneer Tesla and traditional automakers, some with centuries-old track records. There are 417 EV startups in the US alone, according to research by Bernstein, some of which have cautionary tales.

California-based Faraday Future has invested billions in an electric car it has yet to build. Others, like Lucid or Rivian, which have gone into production, are struggling to get components due to global supply chain shortages, said Sam Abuelsamid, principal e-mobility analyst at Guidehouse Insights.

At the same time, Chinese manufacturers are penetrating Europe, with a view to the American market. In the Italian luxury market, Ferrari and Lamborghini have announced plans for their own EVs.

“It will be much harder now than it was ten years ago for Tesla, when they were basically the only brand to make a premium high-performance EV. And now there are dozens of brands doing this and competing for that same dollar,” Abuelsamid said.

Another risk is service and support, especially when launching in large geographies without built-in sales and service networks, Abuelsamid said.

AEHRA’s plans mainly call for online sales and regional service centers, Nada said.

Design is where AEHRA hopes to grab the market’s attention — moving away from the architecture of an internal combustion engine that Nada said has been conditioned by thermal management.

The AEHRA’s bodywork moves away from the edges that have defined supercars’ muscularity in recent years and returns to a softer line reminiscent of pre-war car design.

This aesthetic change improves the car’s aerodynamics, which will help increase range, said AEHRA chief design officer Filippo Perini. Reconstructing the classic internal architecture will create more cabin space for passenger comfort, he added.

Nada is convinced that young consumers are not so attached to the nameplates of their previous generations and will be willing to buy a car from a new player that offers an emotional change.

“We are not in the Ferrari market, we are not in the Lambo market,” he said. “Our vehicles are not the same segment of Tesla. We think we can coexist.”

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