Good morning! It’s Thursday June 20, 2024, and it’s The morning shift, your daily roundup of the top automotive headlines from around the world, all in one place. Here are the important stories you need to know.
1st gear: Fisker missed every lap
When Fisker filed for bankruptcy earlier this week the now-deceased automaker did everything but admitted his own mistakes. He congratulated himself by saying that he had made “incredible progress” and that he was “keeping” his promises, before attributing its demise to “various markets and macroeconomic headwinds» which has impacted the electric vehicle industry as a whole.
While the electric vehicle slowdown hasn’t helped his case, it’s far from the only reason Fisker has gone the way of the dodo bird. In fact, it’s probably not even among the top 50 reasons Fisker failed, even though he had a better chance than most of succeeding. From Bloomberg:
Henrik Fisker and his wife, Geeta Gupta-Fisker, enjoyed an incredible stroke of luck four years ago, when one of the strangest byproducts of the Covid-19 pandemic was stock market amnesia. More to the point, investors have forgotten how difficult it is to build a car company and keep it alive.
Henrik’s second plug-in car company – the first went bankrupt in 2013 – embodies this phenomenon. Fisker, the company, was so strapped for funds in early 2020 that its husband and wife co-founders stopped taking their salaries and furloughed other employees for months. Their fortunes changed when a host of specialist acquisition companies sprung up and began offering huge sums to aspiring electric vehicle makers.
No income was no problem. What mattered was whether these companies and the SPACs that swallowed them up could create slides sleek enough to pique the interest of overnight day traders cooped up at home.
A month after electric truck startup Nikola made its market debut and briefly surpassed Ford’s valuation, Fisker agreed to partner with a SPAC sponsored by private equity giant Apollo, in the part of a deal that would leave the automaker with about $1 billion in cash. The Fiskers turned that into a partnership with Canadian auto parts maker Magna.
On paper, at least, Fisker had gained a considerable head start over other new entrants into the automotive industry. The company would not have to worry about setting up an automobile factory and staffing it with productive workers. A massive factory in Magna, Austria, filled with experienced workers who assemble hundreds of thousands of Toyota sports cars, BMW sedans and Mercedes-Benz SUVs each year, would handle this work for Fisker.
This is where things started to go wrong. In practice, Fisker’s asset-light business philosophy was actually too asset-light. Of course Magna has Ocean production will begin at the end of 2022, but these first cars were especially half cooked, it’s missing things as simple as cruise control. During months, Fisker worked to provide over-the-air updates that would bring more features.
But wait, it gets worse.
Auto sales revenue didn’t start rolling in until the second quarter of last year, and Fisker apparently wasn’t even ready to take that step. My former colleague Sean O’Kane reported for TechCrunch that the company lost track of millions of dollars in customer payments as it ramped up deliveries. One person he spoke with said checks weren’t cashed on time or were lost altogether, and staff often scrambled to find credit card receipts 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 delivered 4,929 to customers. Efforts to partner with dealers earlier this year proved too little, too late.
In January, February, April and May, the U.S. National Highway Traffic Safety Administration opened investigations into possible defects, after drivers complained of multiple braking problems and the inability to park or to open the doors. In the only month in which the regulator did not launch an investigation, Fisker slashed ocean prices by as much as $24,000, a 39% reduction.
Sure, electric vehicles have been through a bit of a rough patch, but the car manufacturer acted like a spoiled child who blames everyone but himself for his self-inflicted misfortune. This probably won’t be a good look when Henrik tries to do his third automotive company.
2nd gear: Toyota shareholders tired of Akio Toyoda
More than one in four Toyota shareholders opposed to the renewal of the mandate President Akio Toyoda to the blackboard. The move suggests there is growing dissatisfaction with Toyota’s corporate governance, just one year on Toyoda relinquished his role as CEO.
To Toyoda ended up being re-elected to the board with only 72 percent of the vote. Sure, that’s a high number, but it’s down from almost 85% in 2023 and over 95% in 2022. Ouch. Of Wall Street Journal:
Proxy advisers Institutional Shareholder Services and Glass Lewis had called on investors to reject Toyoda. They cited recent cases in which Toyota and group companies admitted they did not follow correct procedures to obtain Japanese government certification for certain vehicle models.
Glass Lewis said Toyoda was responsible “for failing to ensure the group maintained appropriate internal controls.” He also criticized the chairman for not appointing enough independent directors to Toyota’s board. ISS said the company should “establish appropriate compliance mechanisms under the direction of the board of directors.”
Although the certification issue has weighed on Toyota shares, the stock price remains up more than 50% since the beginning of last year thanks to strong sales of Toyota’s gasoline-electric hybrid vehicles and record profits. Toyoda, the grandson of the automaker’s founder, correctly predicted that hybrids would capture market share among consumers who did not feel ready to purchase a fully electric vehicle.
Some shareholders have expressed concern that Toyoda, 68, maintains too tight a grip on the company, even after handing Koji Sato, 54, as CEO last year. Sato won the support of 95% of shareholders.
Asked about corporate governance at the automaker’s annual shareholder meeting on Tuesday, Toyoda rejected suggestions that he was still in charge of day-to-day decision-making, but he and Sato said the responsibility lay in ultimately to Toyoda.
“I believe that the person responsible for Toyota and the Toyota Group is still myself,” Toyoda said. Sato said, “The president is taking the lead in reforming the company’s deep-rooted culture” and resolving regulatory issues.
Here’s what a Toyota spokesperson said about Toyoda’s relatively weak support:
“We perceive the approval rate at this year’s general meeting of shareholders as a frank return from institutional investors.”
That’s a short and simple statement if I’ve ever seen one.
3rd gear: EU wants tons of data on Chinese electric vehicles
Chinese Ministry of Commerce Is saying the European Commission was seeking an “unprecedented” amount of detailed information about its automakers’ supply chains. This request was made during an investigation into subsidized imports of electric vehicles into China. From Reuters:
The Commission, which oversees trade policy in the 27-nation strong European Union, last week imposed additional tariffs on imported Chinese electric vehicles following the investigation, drawing reprimands from Beijing and allegations spying on Chinese state media. China has also opened an anti-dumping investigation into EU pork imports.
“The type, scope and quantity of information collected by the European side was unprecedented and far more than what is required for a countervailing duty investigation,” said He Yadong, a spokesperson for the Ministry of Commerce, during a press conference. He was responding to a question from Chinese state radio about whether Brussels had sought to spy on China’s electric vehicle industry.
The Commission “mandatorily required” that Chinese automakers provide information regarding the supply of raw materials for batteries, component manufacturing, prices and the development of sales channels, the spokesperson said.
Governments typically impose anti-subsidy duties on imported products to protect domestic companies when they suspect that the product in question could only have been produced at below market price because it benefited from incentives or unfair gifts.
Currently, European car manufacturers are strongly challenged by a influx of cheaper electric vehicles from competitors in China. Typically, these vehicles cost 20 percent less than comparable vehicles manufactured in the EU, according to the Commission.
4th gear: Toyota stops production on six lines
Toyota announcement it stopped production on six lines at five different factories in Japan starting June 20 due to a parts shortage, according to Reuters. At this time, little information is known about this move.
The car manufacturer will apparently decide whether or not to resume production on the lines on Friday, June 21, according to a spokesperson for the Japanese automaker. It is not immediately clear which part Toyota is facing a shortage or which vehicles are affected by the shutdown.
This has been a bit difficult for Toyota and its production lines. Here are more Yahoo finance:
In January, the automaker closed two of its production lines in Japan due to the Daihatsu emissions testing scandal.
Last year, the company was also hit by a system outage caused by an update to the parts ordering system that forced the closure of 14 of its factories in Japan.
I know you are all deeply concerned about this issue for Toyota, so we will be sure to update you once the issue is resolved.