Elon dodges liability, Ford falters and Rivian lays off more workers
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Elon Musk has successfully escaped one of his legal troubles. ICYMI: A jury found Musk was not liable in a class-action securities fraud trial that centered on the Tesla CEO’s now infamous “funding secured” tweet. The jury deliberated for less than 90 minutes.
The central question in the lawsuit was whether Musk was liable for losses suffered by shareholders after he posted in August 2018 several messages on Twitter that he had secured funding to take Tesla private.
I’ve received a few messages asking how the jury could end up here? Well, I’m not a lawyer, but I did talk to a few of them. Their answer was “it’s complicated.”
Many noted the following: It was a tough case to prove, the attorneys representing the plaintiffs didn’t do a great job on a shit sandwich of a case and the defense had some key points going for them. Several jurors interviewed after the verdict said the plaintiffs attorneys’ arguments were difficult to follow and sometimes seemed disorganized.
I found the closing arguments of Musk’s attorney Alex Spiro also hard to follow, what with the jumping around between sports analogies, time lines and the recreating of moments he didn’t witness. But there was a moment where I went, welp, that’s it. I’m paraphrasing, but he essentially told the jury, you can be done and home this afternoon if you make the right call.
The jury instructions were also incredibly complicated and included extensive math to determine the liability. The trial had been a mind-numbing three weeks of verbal tug-of-war. All of that combined into the end result.
OK, on to the rest of the news from last week!
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Micromobbin’
Let’s talk about electric bikes. A new report has shown that e-bike subsidies are more effective than electric car subsidies at reducing CO2 emissions. While it takes a $1,000 subsidy to raise electric car demand by 2.6%, it will only take about $100 to do the same for e-bikes. So where are we when it comes to e-bike subsidies?
It’s a grassroots movement, for sure. Denver’s popular e-bike voucher scheme has recently relaunched. Oregon held its first legislative hearing for its $1,200+ e-bike subsidy this week. Hawaii is considering adding an additional $2,000 subsidy to its existing rebate for adults to help high schoolers do the same. Additionally, a newly introduced bill in the state legislature would allocate $2 million a year to fund bike and e-bike purchases for students. Outside the U.S., the island of Jersey in the U.K. plans to double the number of e-bike grants available following a successful pilot.
Meanwhile in New York City, a misguided council member has introduced a bill to ban all e-bikes and scooters after a series of battery fires. Wouldn’t it make more sense to invest in e-bikes so people could afford to buy higher quality ones that won’t burst into flames?
Is there hope that change can happen at the federal level? There are indeed flickers. The U.S.’s recently approved omnibus spending bill includes $26.7 million in funding for trail, bike and pedestrian projects in 29 states. It’s not massive, but we’ll take it.
If you think it’s time to make that micromobility purchase, check out this list of the best deals put together by Ride Review.
In other news…
Cake is reportedly planning its entry into the Indian market.
London has launched a new £110 million Scrappage Scheme ($132 million) that incentivizes residents to trade in their clunkers for e-bikes, e-scooters and public transit. The initiative was launched ahead of the expansion of London’s Ultra Low Emission Zone. Londoners who scrap non-compliant vehicles can get up to £2,000 ($2,400) — or take a smaller cash grant and two free annual bus/tram travel passes. Small businesses can claim grants up to £9,500 ($11,400). Lime, Dott and Tier, London’s three e-scooter operators, are also offering discounted or free rides to successful applicants.
Lyft has launched a new dockable e-scooter, made in partnership with Segway-Ninebot, to address the chaos involved in the free-floating model. The company said it can retrofit existing bike docks that it has all over the country to scale the new scooters.
McKinsey & Co have a new study that projects the global shared micromobility market will generate up to $90 billion in 2030, which would be a 40% increase each year between 2019 and 2030.
SpaceCamper, a company that’s known for its VW bus conversions, has launched its first camper electric bike. The cargo bike can be equipped with a table, tent and other amenities for outdoor exploration.
TechCrunch reviewed the Superstrata, an e-bike that is custom 3D printed to order using a single piece of carbon fiber. One thing Superstrata wants you to know: It’s not an e-bike company. It’s an “advanced manufacturing company.”
Deal of the week
China’s Zhejiang Geely Holding Group has been busy! I recently wrote about its Zeekr brand. And now, there’s news about Lotus Technology, which Geely acquired in 2017 for $65 million.
This week, Lotus Technology agreed to go public via a merger with special purpose acquisition company L Catterton Asia Acquisition in a transaction that values the combined entity at about $5.4 billion. The company intends to be listed on the Nasdaq exchange under the ticker LOT.
Lotus Tech, the technology arm of the sports car brand, is developing all-electric vehicles. It aims to compete with Porsche, Ferrari and Aston Martin for customers. Nearly a year ago, Lotus unveiled a battery-electric “hyper” SUV called the Eletre — the first of a trio of EVs Lotus plans to launch over the next four years.
Other deals that got my attention this week …
ABB E-Mobility, the EV charging division of ABB, sold a 12% stake for 325 million Swiss francs ($355 million) to four investors: Porsche AG holding company Porsche SE as well as BeyondNetZero, the climate solutions fund of General Atlantic, Singapore’s sovereign wealth fund GIC and the UK-based investment firm Just Climate.
Atlas Technologies B.V., the operating company responsible for the production of the Lightyear EV, filed for bankruptcy. Lightyear had a substantial exhibit at CES 2023 and had just opened its waitlist for its mass-market EV, the Lightyear 2.
Britishvolt attracted Greybull Capital as a late bidder for the bankrupt UK-based battery maker.
Cheche Technology, a Beijing-based auto insurance search engine, agreed to go public via a merger with special purpose acquisition company Prime Impact Acquisition I at an implied enterprise valuation of $841 million.
Hesai Group, a Chinese lidar company, set the terms of its IPO to 9 million shares priced between $17 and $19.
Fleetcor Technologies acquired Mina, a cloud-based EV charging software platform.
Navya, the France-based autonomous vehicle company, said it doesn’t have sufficient capital to meet its current liabilities and has requested the opening of receivership proceedings.
Onto raised a £100 million ($120 million) credit facility from global investment group CDPQ and independent asset manager Pollen Street to expand its UK fleet of electric cars for subscription.
Our Next Energy, a buzzy battery startup, closed a $300 million Series B round in an effort to get its $1.6 billion gigafactory up and running. The new round, led by Fifth Wall and Franklin Templeton, values the company at $1.2 billion post-money. Other investors included Temasek, Riverstone Holdings, Coatue, AI Capital Partners, Sente Ventures and insiders Breakthrough Energy Ventures, Assembly Ventures, BMW i Ventures and Volta Energy Technologies. Also joining the round are two unnamed strategic investors, “a manufacturer of EV technology solutions and a renewable energy provider,” the company said.
Phantom AI raised $36.5 million in a Series C funding round led by Intervest, a South Korean venture fund. South Korean investment bank Shinhan GIB and Samsung’s venture arm also participated.
Tau, an Italy-based supplier of winding wire for EVs, raised €9 million ($9.7 million) in a Series B funding round led by Solvay Ventures. Finindus, a Belgium-based joint venture of ArcelorMittal and the Flemish Region, also participated.
Notable reads and other tidbits
ADAS
The U.S. Department of Justice has asked Tesla for documents related to its branded Full Self-Driving and Autopilot advanced driver-assistance systems, the automaker disclosed in a securities filing.
Autonomous vehicles
Cruise received approval from the California Department of Motor Vehicles to test its custom-built Origin vehicle on public roads. Meanwhile, city officials are trying to pressure regulators to slow down the deployment of Cruise and Waymo robotaxis in San Francisco.
A study from the Massachusetts Institute of Technology found that widespread adoption of autonomous vehicles would cause a major increase carbon emissions due to the onboard computing power needed to run them.
TuSimple is facing even greater federal scrutiny. The WSJ reported (based on unnamed sources) that representatives of the U.S. national-security panel have urged the Justice Department to consider economic-espionage charges against leaders of TuSimple.
Earnings
GM and Ford earnings dropped this week and they couldn’t have been more different. GM printed money, and importantly, seems to have kept costs in check and shored up its supply chain. GM has taken its supply chain efforts all the way to mining. The company said in its Q4 earnings that it invested $650 million into Lithium Americas as part of an agreement to develop a mine in Nevada.
Meanwhile, Ford CEO Jim Farley said the company left about $2 billion in profits on the table in 2022. The company earned $10.4 billion in net income (on adjusted basis) last year, falling well below its own guidance and missing Wall Street’s expectations.
The causes? Well, there were a few costly expenses that also put a dent in Ford’s bottom line, including a $7.3 billion writedown on its Rivian investment and another $2.8 billion for its investment in Argo AI. But the real culprits were (and are), that the company is spending way too much on materials, shipping costs and production, inferior quality that has led to too many recalls and inefficiencies throughout its operations.
While Ford is optimistic that it now has the right plan in place to fix this mess, it did warn of headwinds including pressure to lower prices. And guess what? Yup, Ford is already lowering prices. The company announced last week it had increased production and cut the price of its all-electric Mustang Mach-E crossover, the latest automaker to join an EV price war started by Tesla.
Tesla reported earnings last week, but its 10K dropped a few days later and contained some interesting bits. We noted the DOJ investigation above. The 10K also disclosed that Tesla recorded a $204 million impairment loss in 2022 on its bitcoin holdings. The loss was offset by $64 million in profits from bitcoin trading, leaving the automaker with a net loss of $140 million.
Electric vehicles, charging & batteries
Bollinger Motors filed a lawsuit against Munro Vehicles, and its head designer, over alleged breach of contract, patent infringement and trade dress infringement.
BMW said it will invest 800 million euros ($866 million) to expand its operations at its factory in central Mexico to produce high-voltage batteries and its next-generation of electric vehicles known as Neue Klasse.
Nissan finally showed a physical version of the Nissan Max-Out EV convertible concept. Will it be an electrified GT-R successor?
Rivian is cutting 6% of its workforce for the second time in less than a year. When I interviewed founder and CEO RJ Scaringe on the Disrupt stage last October he said that of Rivian’s nearly 15,000 employees, about half were focused on future products, including people working on updated drive units and battery packs. Now, future products are important. But that figure seemed shocking to me (anyone else?) because the company had yet to master production of its three existing products.
The U.S. Treasury Department updated the vehicle classification standard, revising a definition that determines which EVs are eligible for clean vehicle tax credits. Vehicle models like the Cadillac Lyric, certain trims of the Ford Mustang Mach-E and the five-seater Tesla Model Y now qualify for the $7,500 EV tax credit.
People
AEye, the lidar company, hired Matt Fisch as CEO and as a member of its board.
Aurora Innovation hired Ossa Fisher as president as the autonomous vehicle company prepares to commercially launch its self-driving trucks business next year.
General Motors hired Zach Kirkman, the former head of Tesla’s corporate development, to a similar position. Kirkman’s title at GM is vice president of corporate development and global mergers and acquisitions.
Volvo Cars appointed Jeremy Offer as head of global design. Offer succeeds Robin Page, who will remain with Volvo Cars as senior advisor.
Ride-hailing
A proposed Colorado bill would require ride-hail companies like Uber and Lyft, as well as delivery services, show customers and drivers how much of the payment for a ride goes to the driver and how much to the company before the customer can give a tip.
Security
Hotai Motor, the Taiwanese automotive conglomerate, exposed reams of personal customer data from its car rental and carshare unit, iRent, until a security researcher found the data online last week. Even then, it took the company a week — and the intervention of the Taiwanese government — to act.
SPACs
Remember when all the SPAC news was about some big deal or an eye-popping stock-price jump? Well, now it seems that much of the news surrounding SPACs — when a company goes public by merging with a blank-check company — falls into the official “ruh-roh” category. So, I’m creating a new category for the occasion.
Arrival going through another restructuring — this time led by a newly appointed CEO — that will slash its workforce by about 50%. This is the commercial EV company’s third restructuring since July 2022.
Getaround, a peer-to-peer car-sharing company, had two bits of bad news. The company received a delisting warning from the New York Stock Exchange because its stock price has traded below $1 for the past 30 days. A day later, Getaround laid off about 10% of its staff.
