Good morning! It’s Thursday, June 20, 2024, and that’s it Morning shift, your daily roundup of top automotive headlines from around the world, in one place. Here are the important stories you need to know.
First take: Fisker messes up at every turn
When Fisker filed for bankruptcy earlier this week the now dead motorist did everything but acquiesce own mistakes. It patted itself on the back by claiming it had made “tremendous progress” and was “making good” on promises before blaming its demise on “various markets and macroeconomic headwinds” that impacted the electric vehicle industry as a whole.
While the EV slowdown didn’t help its case, it’s far from the only reason Fisker went the way of the dodo bird. In fact, it’s probably not even in the top 50 reasons why Fisker failed even though it had a better chance than most to succeed. from Bloomberg:
Henrik Fisker and his wife, Geeta Gupta-Fisker, benefited from incredible strokes of luck four years ago, when one of the strangest byproducts of the Covid-19 pandemic was stock market amnesia. Specifically, investors forgot how difficult it is to start a car company and keep it alive.
Henrik’s second plug-in car venture – the first went bankrupt in 2013 – epitomized this phenomenon. Fisker, the company, was so low on funding in early 2020 that its husband-and-wife co-founders stopped paying salaries and laid off other employees for months. Their fortunes changed when a group of special-purpose buyout companies sprang up and began offering large sums to aspiring electric vehicle manufacturers.
No income was not a problem. What mattered was whether these companies and the SPACs that swallowed them could create the slide deck attractive enough to pique the interest of the night traders huddled in their homes.
A month after electric truck startup Nikola made its market debut and briefly surpassed Ford’s valuation, Fisker agreed to combine with a SPAC sponsored by private equity giant Apollo, in a deal that will leaving the car company with about $1 billion in cash. Fiskers matched this in a partnership with Canadian auto parts maker Magna.
On paper, at least, Fisker had secured a big leg up on other new automotive entries. The company won’t have to worry about setting up a car factory and staffing it with productive workers. A massive Magna facility in Austria filled with experienced factory hands who assemble hundreds of thousands of Toyota sports cars, BMW sedans and Mercedes-Benz SUVs each year would handle the job for Fisker.
This is where things started to go wrong. In practice, Fisker’s asset-light business philosophy was actually very light on assets. Of course, Magna got it Oceania production will go into late 2022, but those early cars were especially half baked, things as simple as cruise control are missing. For months, Fisker worked to deliver over-the-air updates that would bring more features.
But wait, it gets worse.
Auto sales revenue didn’t begin to decline until the second quarter of last year, and Fisker apparently wasn’t even ready to meet this milestone. My former colleague Sean O’Kane reported for TechCrunch that the company lost track of millions of dollars in customer payments while ramping up shipments. One person he spoke with said checks were not cashed on time or were lost entirely, and that staff often struggled to find credit card bills or wired funds.
Fisker also failed in its attempt to replicate Tesla’s direct sales model. Last year, 10,193 Oceans were produced, but the company only shipped 4,929 to customers. Efforts to partner with vendors earlier in the year proved to be too little, too late.
In January, February, April and May, the US National Highway Traffic Safety Administration opened investigations into possible defects after drivers complained of numerous braking problems and the inability to shift into park or open the doors. In the only month during this period that the regulator didn’t launch a probe, Fisker slashed Ocean prices to $24,000 — a 39% discount.
Sure, EVs have hit a bit of a rough patch, but The automaker has acted like a spoiled child who blames everyone but himself for his self-inflicted disaster. This probably won’t be a good look when Henrik tries to do his third car company.
Second take: Toyota shareholders tired of Akio Toyoda
More than one in four Toyota shareholders opposed the reappointment Chairman Akio Toyoda to the board. The move suggests there is growing dissatisfaction with Toyota’s corporate governance just one year on Toyoda stepped down from his role as CEO.
Toyoda ended up being re-elected to the board with just 72 percent of the vote. Sure, that’s a strong number, but it’s down from nearly 85 percent in 2023 and over 95 percent in 2022. Yes. from Wall Street Journal:
Advisers representing Institutional Shareholder Services and Glass Lewis had urged investors to reject Toyoda. They cited recent cases in which Toyota and group companies admitted they had not followed proper procedures in obtaining Japanese government certification for some vehicle models.
Glass Lewis said Toyoda was responsible “for failing to ensure the group maintained adequate internal controls”. He also blamed the chairman for not putting enough independent directors on Toyota’s board. ISS said the company should “establish appropriate compliance mechanisms under the leadership of the board”.
Although the certification issue has weighed on Toyota’s stock, the stock price remains up more than 50% since the start of last year on strong sales of Toyota’s gas-electric hybrid vehicles and record profit . Toyoda, the grandson of the automaker’s founder, correctly predicted that hybrids would capture market share among consumers who felt they weren’t ready to buy a fully electric vehicle.
Some shareholders have expressed concern that Toyoda, 68, maintains too tight a grip on the company even after handing over the CEO job last year to Koji Sato, 54. Sato won 95% support from shareholders.
Asked about corporate governance at the automaker’s annual shareholder meeting on Tuesday, Toyoda dismissed suggestions that he was still in charge of day-to-day decision-making, but both he and Sato asserted that the buck ultimately stops with Toyoda.
“I believe the person responsible for Toyota and the Toyota group is still me,” Toyoda said. Sato said: “The chairman is taking the lead to reform the deep-rooted culture” of the company and fix regulatory problems.
Here’s what a Toyota spokesperson said Relatively low Toyota support:
“We perceive the approval rate at this year’s shareholder meeting as genuine feedback from institutional investors.”
That’s a short and simple statement if ever I saw one.
Third takeaway: EU seeks thousands of Chinese EV data
Ministry of Commerce of China is saying European Commission requested an “unprecedented” amount of detailed information on automakers’ supply chains. The request came during an investigation into subsidized imports of electric vehicles from China. from Reuters:
The commission, which oversees trade policy for the 27-nation European Union, last week imposed additional tariffs on imported Chinese vehicles after the investigation, prompting a rebuke from Beijing and accusations of espionage by Chinese state media. China has also launched a dumping investigation into EU pork imports.
“The type, scope and amount of information collected by the European side was unprecedented and far beyond what is required for an anti-duty investigation,” He Yadong, a commerce ministry spokesman, told a news conference. He was responding to a question from Chinese state radio about whether Brussels had sought to spy on China’s EV industry.
The commission “compulsorily requested” Chinese automakers to submit information about the source of raw materials for batteries, production components and prices and the development of sales channels, the spokesman said.
Governments usually impose anti-subsidy duties on imported goods to protect domestic firms when they suspect that the item in question may have only been produced for less than the market rate because it benefited from unfair incentives or gifts.
Right now, European automakers are being challenged a lot by one influx of lower-cost electric vehicles from rivals in China. Typically, those vehicles cost 20 percent less than EU-made vehicles, according to the Commission.
4th take: Toyota stops production on six lines
Toyota announced was stopping production on six lines at five different plants in Japan starting June 20 due to parts shortages, according to Reuters. At the moment, not much information is known about this move.
The automaker will likely decide whether or not to resume production on the lines on Friday, June 21, according to a spokesman for the Japanese automaker. It was not immediately clear which part Toyota is facing a shortage or which vehicles are affected by the shutdown.
It’s been a bit rough for Toyota and its production lines. Here’s more from Yahoo Finance:
In January, the automaker shut down two of its production lines in Japan over Daihatsu’s emissions testing scandal.
Last year it was also hit by a system failure caused by an update to its parts ordering system that forced the closure of 14 of its factories in Japan.
I know you are all deeply concerned about this problem for Toyota, so we will be sure to bring you an update once the issue is resolved.