The Information reported that in January this year, electric truck startup Harbinger Motors raised $100 million in Series B financing. The company said it would use the funds to complete the automation of its factory in Garden Grove, California, and fulfill binding orders for 4,690 trucks, worth approximately $500 million.
The Information stated that Harbinger Motors’ success was not easy.Since 2022, at least six U.S. electric van/truck companies have gone bankrupt and liquidated, and the seventh is still struggling to survive.
Harbinger CEO John Harris gave a sharp perspective on why electric car companies are struggling after the boom. In the rush of 2020-21, dozens of such companies went public in the United States and Europe. "It was too easy to raise money at the time," he said, and many companies simply didn't use their capital prudently.
"What you can see now is that everyone is divided into those who got the money and successfully executed the plan and those who got the money and burned it," Harris told me.
In part, Harris is describing the existence of electric vehicle startups in the "Valley of Death," the time when money is tight between developing a car and selling it. Too many electric vehicle companies have failed at this stage, including Electric Last Mile, Lordstown Motors, Proterra, Arrival, Canoo and Nikola. Last September, truck and van maker Mullen Automotive said it had just $10 million in cash on hand; Mullen's market value was just $1.1 million as of Wednesday's close.
Harris and a co-founder founded Harbinger in 2022.The company's products aren't fancy: Harbinger builds the chassis portion of the truck in Garden Grove, including batteries, chassis, motors and drivetrains. The customer then goes to a bodybuilder who installs the shell, completing the build of a delivery van, motorhome or medium-duty truck.
Harris said Harbinger has focused on controlling its manufacturing supply chain, producing almost everything in-house except for battery cells and tires to reduce costs. With the Inflation Reduction Act tax credit, Harbinger says its vehicles cost as much as equivalent diesel-powered trucks. The Inflation Reduction Act provides tax credits for the purchase of commercial electric vehicles.
Currently, Harris is using Series B financing co-led by Capricorn Investment Group and Volkswagen-backed fund Leitmotif to complete the automation transformation of the factory. This will reduce manufacturing costs, he said. Previously, the factory's production process was carried out sequentially on different machines; once a process was completed, workers would use trolleys to push unfinished parts to the next machine.
"If you go to our factory now, you'll see a battery module production line that's entirely conveyor belted. There are no trolleys anymore," he said.