Auto File: Fisker Goes Bust, Again
By Nick Carey
European Autos Correspondent
Greetings from London!
There’s lots to cover today – shock, horror – but before we delve into other items of auto industry news it’s worth pausing to focus on the biggest stories of the last week: European Union’s tariffs on Chinese EVs and Elon Musk’s renewed pay package.
The EU’s decision to slap tariffs of up to 38.1% on electric vehicles made by Chinese automakers comes despite opposition from Europe’s carmakers (above all the Germans) who fear retribution and whose own Chinese-made cars will also take a hit.
Chinese automakers are also expected to find workarounds, either through absorbing the extra cost or building their own car factories in Europe.
Beyond a tit-for-tat probe in China on imported EU pork products launched this week and the possibility of a broader trade war, it remains to be seen whether tariffs will have any impact and who will blink first as the disputes mount.
In what seemed a foregone conclusion, Tesla’s Musk won his battle to have his 2018 pay package approved, aided by his army of small shareholders – not to be confused with Scotland’s Tartan Army – and a last-minute change of heart by Vanguard.
Tesla has already kicked off the fight to restore the pay package that was voided by a judge in Delaware earlier this year.
Investors hope the vote to approve the $56 billion pay package will refocus Musk’s mind on Tesla.
As well they might.
Musk has been promising big things like robotaxis. But Tesla has more immediate bread-and-butter issues to tackle.
The automaker has a small lineup of aging EVs that needs renewal even as fast-moving Chinese brands develop and deploy electric cars fast.
Above all, Tesla needs to move more of its EVs as global demand has slowed.
Which brings us to today’s Auto File…
Fisker’s fight for survival fails
Biden goes easy on polluting hybrids
Ford walks back EV dealer limits
Fisker goes down a second time
U.S. EV maker Fisker filed for bankruptcy protection on Monday, after months spent burning cash trying to deliver its Ocean SUV to U.S. and European customers.
Henrik Fisker’s second EV maker bankruptcy comes after efforts to secure investments, including from Nissan, came to nothing. His first EV venture, Fisker Automotive, went bankrupt in 2013.
Fisker now joins a growing list of failed EV startups including Proterra, Lordstown, Electric Last Mile Solutions and Arrival.
Just a few years ago, these companies all rode high on a wave of billions in cash as investors sought quick ways to emulate Tesla’s success, all the while forgetting that Tesla first burned billions in cash and had several brushes with bankruptcy as it struggled to master production at scale.
Based on promises of future revenue before most startups even had a viable product, the SPAC fever broke when interest rates started going up.
It then became a race against time to get to scale, made infinitely harder for the likes of Fisker once Tesla started a price war last year.
As times get harder for smaller EV makers, especially in China, it is hard to imagine Fisker will be the last to fall.
Recommended reading:
Tesla shareholders only have themselves to blame
Tesla vote resurrects Old Elon Musk
What China EV overcapacity?
Ford rolls back EV dealer restrictions
Ford is rolling back restrictions on which of its U.S. dealers can sell EVs, a fresh sign of the growing challenges U.S. automakers face in trying to get Americans to buy them.
Detroit-based Ford unveiled its EV selling rules in late 2022, which required dealers to spend between $500,000 to about $1 million on expensive charging equipment and other programs. About half of Ford's 2,800 dealers have enrolled in the program.
Ford CEO Jim Farley had previously warned dealers they would be held to "brutal" standards to stay competitive and serve customers during the EV transition.
But EV sales have been slower than expected, pushing automakers like Ford to prioritize hybrid vehicles as their sales growth has outpaced pure EVs.
The change to allow all Ford dealers to sell EVs starting July 1 has left dealers who invested in the machinery and programs Ford required feeling burned.
Some dealers told Reuters they were having trouble getting consumers to buy the EVs on their lot and were refusing shipments of electric models because they were forced to sell them at a loss.
Toyoda gets Toyota shareholder nod
Toyota’s Chairman Akio Toyoda was re-elected to his post at the Japanese’ automaker's annual general meeting on Tuesday, with shareholders shrugging off concerns about governance and certification test scandals.
This year's AGM followed scandals involving violations of certification tests at Toyota and its group companies including compact car maker Daihatsu and truck unit Hino Motors.
Proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis had taken issue with the way the automaker has dealt with problems and recommended against re-electing Toyoda.
Despite those recommendations and the ongoing slow drip of news in the certification test scandals, Toyoda was widely expected to survive the vote given that much of the automaker is owned by other Toyota group firms and considering his popularity among Japanese retail investors. Record business results have helped too.
Most opposition to Toyoda was expected from overseas investors, which account for a quarter of Toyota's shareholders.
Toyota CEO Koji Sato, who succeeded Toyoda as chief executive last year, reiterated apologies for the certification problems, but neither he nor Toyoda addressed the proxy advisers’ recommendations directly.
Fast Laps
Hyundai Motor's India unit is seeking regulatory approval for a stock market listing in Mumbai that could be thenation's biggest and will see the South Korean automaker sell a stake of up to 17.5% in the company – which could encourage other multinationals to list their local operations in India.
A broad swath of pro-trade American business groupshas askedthe Biden administration for another month to comment on plans to impose steeper tariffs on Chinese imports of EVs, batteries, solar products and other goods, effectively delaying the Aug. 1 start date for many of the duties.
Tesla has sued its former supplier Matthews International in a California federal court for allegedly stealing trade secrets related to Tesla's battery-making processes and sharing them with the EV giant's competitors. Separately, A Canadian resident of China pleaded guilty in New York federal court to stealing Tesla EV battery trade secrets and conspiring to sell them to undercover government agents.
Chinese demand for new energy vehicles (NEVs) is likely to maintain its fast growth, which will increase the need for EV charging infrastructure, the country's top economic planner said.
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Editing by Tomasz Janowski
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