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Tesla Co-Founder Has Warning For Legacy Automakers Investing In Electric Vehicle Production

After years of there only being Tesla Inc (NASDAQ: TSLA) and a handful of others in the electric vehicle space, many legacy automakers are ramping up efforts to expand their businesses into this area. A Tesla co-founder has a warning for the legacy automakers.

What Happened: Tesla co-founder JB Straubel knows a thing or two about creating EVs. Straubel was at Tesla from 2004 to 2019. As the chief technology officer at Tesla, Straubel also knows how important it is to focus on the supply chain for batteries and minerals to support the production of EVs.

“So many different OEMs, countries, factories, customers are leaping into EVs. I don’t think they’ve done the math fully (on) what that entails on the supply chain and tracing it all the way back, literally all the way back to the mines,” Straubel said on “This Week in Startups” with Jason Calacanis.

Straubel compares the move by legacy automakers to an overbooked flight with only so much capacity and everyone fighting for the seats.

“Everybody’s saying that we all wanna go there at the same time. Meanwhile, we have to sort of build the planes to get there; we have to figure out how to sequence everyone.”

Related Link: Forma Tesla Executive On Course To Make Electric Cars Cheaper 

Why It’s Important: Straubel, who left Tesla in 2019, is the founder of Redwood Materials. Straubel’s new company is working on recycling batteries, a move that could help the supply chain for automotive companies in a push for electrification.

Straubel said he was surprised that legacy automakers didn’t follow Tesla into the EV space in 2012.

“Customers loved it. It was a runaway hit with reviewers and magazine and customers, but the copying and market didn’t change,” Straubel said of the Tesla Model S.

Straubel didn’t name any specific companies when criticizing legacy automakers. Many high-profile companies including General Motors Company (NYSE: GM) and Ford Motor Company (NYSE: F) have been investing billions of dollars in a shift to EVs.

Redwood Materials raised $700 million in July. Investors in the company include T. Rowe Price, Goldman Sachs Group Inc (NYSE: GS), Fidelity, Bailie Gifford, Canada Pension Plan and, Inc. (NASDAQ: AMZN) Climate Pledge Fund.

Photo: Courtesy Tesla Inc.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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