Brimming with epic successes and spectacular failures, the early history of the motor car industry offers clues about its future, too. As so often during technological revolutions, initial bursts of fast and furious experimentation by wild-eyed pioneers are followed by waves of industry consolidation by more sober corporate types.

So it was in the US from the 1890s, when scores of obsessive entrepreneurs launched the modern auto industry. Over the next few decades they founded hundreds of companies manufacturing thousands of different models. In the words of one historian, these dedicated enthusiasts competed in a “drastically Darwinian” world and seemed to prefer “to go broke making automobiles than get rich doing anything else”, a tune which resonates again today.

But the development of capital-intensive mass manufacturing methods, the Great Depression and the second world war thinned out the competition. By 1950, the industry was dominated by just three giant corporations: General Motors, Ford and Chrysler, which between them accounted for about three-quarters of global production.

Today, the car industry is opening up once again to new entrants amid another technological convulsion as electric and connected vehicles — and maybe eventually autonomous cars — replace combustion engine motors driven by humans. As this revolution unfolds, we are seeing another burst of creative competition as entrepreneurial start-ups and tech companies flood into the market.

According to the market research company CB Insights, more than 70 start-ups have recently launched in the EV sector, ranging from auto manufacturers and battery companies to charging infrastructure providers. Investments in the EV start-up market are on course to hit $16.3bn this year, a 28 per cent increase on the year before, the company forecasts.

By far the most successful of the newer entrants has been Tesla, founded by the mercurial Elon Musk. Tesla has redefined the entire EV sector and boasts a market value of about $632bn, bigger than GM, Ford, Toyota and Volkswagen combined. But if the past is indeed prologue, then some of the more recent start-ups are bound to flame out amid overheated technological claims and production disasters. “There is a wicked waste of dumb money,” says Peter Rawlinson, chief executive of the EV car company Lucid, predicting that 80 per cent of EV start-ups and 20 per cent of traditional carmakers are likely to go bust.

Nevertheless, the former Tesla engineer remains convinced that the transition to an EV world will happen faster than anyone expects, driven by the environmental imperative. Lucid is releasing its own luxury EV saloon later this year with a range of more than 500 miles, enough to drive from San Francisco to Los Angeles on one charge. “We are on the cusp of a transportational revolution. The environment is in crisis. The world needs millions of electric cars tomorrow,” Rawlinson told me at the Founders Forum tech event last week.

For the moment, the EV sector is a small, albeit rapidly expanding market, cheered on — and often heavily subsidised — by environmentally conscious governments. According to the data provider EV-volumes.com, global EV sales rose to 3.24m in 2020, up from 2.3m the year before, with Europe outpacing China as the world’s fastest-growing market.

It is an open and fascinating question, who will eventually consolidate the EV market. Many bet on Chinese companies dominating mass-market EVs. US tech giants, such as Google and Apple, see cars as “computers on wheels” and are revving up their own ambitions in the sector. Although many were late to the game, traditional carmakers are also now investing heavily in EVs.

GM’s vision is to create a “zero crashes, zero emissions, zero congestion” car market. Mary Barra, GM’s chair and CEO, announced this month that the company would spend $35bn on EV investments by 2025, in a process driven by customer demand. “Across the board we are seeing exceptionally strong reactions and a positive response to all of our electric vehicles,” she told CNBC.

The industry’s dream is to create an attractive and reliable $25,000 electric car that overcomes range anxiety. As Alain Kornhauser, a professor at Princeton University, says, the winners will be those who can build cars that appeal to everyday drivers as well as the “greasers and truckers”. “It’s all about the sociology, not the technology,” he adds.

In other words, it will be, as it has always been throughout history, the customer who decides.