If you want to read about Tesla trying to go private, Tesla also suing a Canadian province, and Ford going all-in on SUVs, today’s your day. This is The Morning Shift for Friday, Aug. 17, 2018.
1st Gear: SpaceX Makes the List Of Companies That Could Provide the Funding to Take Tesla Private
Earlier this month Tesla CEO Elon Musk tweeted that he was considering taking the company private, and that he’d secured funding. This tweet—which not only yielded an inquiry and then subpoena from the Securities and Exchange Commission, but also a shareholder lawsuit—left the world wondering where exactly Musk had gotten funding.
On Monday, the tech mogul announced that he was in talks with the government of Saudi Arabia, and with “a number of other investors.” Wired reported that those investors could come from China and Japan.
Now, in a recent story on Musk, the New York Times suggests that perhaps Elon’s rocket company, SpaceX, could provide funding to take Tesla private, with the news site writing:
Another possibility under consideration is that SpaceX, Mr. Musk’s rocket company, would help bankroll the Tesla privatization and would take an ownership stake in the carmaker, according to people familiar with the matter.
This isn’t a particularly farfetched idea, with CNBC quoting Morgan Stanley Analyst Adam Jonas as saying:
“We see scope for SpaceX to play a potentially crucial role in facilitating the required financing as well as the strategic narrative going forward,” analyst Adam Jonas said in a note entitled “How SpaceX Can Potentially Help Tesla Go Private” to clients Monday. “We believe investors should consider the potential role of SpaceX in the near-term financial options confronting Tesla and its shareholders.”
This comes after Musk told employees “the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures.” So whether SpaceX will open its coffers for Tesla, while still remaining separate, nobody really knows at this point. We’ve reached out to Tesla for comment and will update when we know more.
2nd Gear: Ford’s Pumping Its Lineup Full Of Trucks and SUVs
Back in April, we learned that Ford is planning to cut all small car production sans the Ford Mustang and Ford Focus Active in favor of SUVs and trucks. But don’t think the company phasing out sedans means The Blue Oval brand is shrinking its lineup.
Yesterday, at a media even on Woodward Avenue north of Detroit, Ford’s product development chief Hau Thai-Tang said the brand plans to have three more nameplates in 2023 than it does today. It will do this by replacing its small cars with big vehicles, with Automotive News reporting:
Ford Motor Co. product chief Hau Thai Tang said the brand would add nine nameplates — seven of which will be pickups and utilities — through 2023. They will fill holes left by eliminating the Fiesta, Taurus, Fusion, C-Max, Flex and all but a wagon version of the Focus, and expand the brand into several new segments, resulting in a net gain of three nameplates for the brand.
Perhaps more interesting is the Detroit News’ report implying that some of Ford’s current sedan/small car nameplates could become entirely different kinds of cars:
The automaker plans to transition at least one of the nameplates currently on its sedans into larger crossovers. The Focus Active crossover will debut in the U.S. in the second half of 2019. The Fusion, Taurus and Fiesta sedans will be cut, though the automaker stressed that does not mean those nameplates will disappear.
Maybe Ford will just add “Active” on the tail-end of their sedan nameplates and slap those badges onto crossovers?
3rd Gear: Tesla’s Suing Ontario Because It Cut EV Incentives
Tesla’s taking legal action against the government of Ontario, Canada, which in July canceled electric vehicle rebates on cars not yet on dealer lots or not yet ordered by third-party dealers, Bloomberg reports. The lawsuit, filed last week, alleges that Tesla is getting the short end of a $10,640 stick (rebates were apparently worth up to that much) since the company doesn’t use third-party dealers.
Bloomberg quotes the lawsuit:
Ontario “left hundreds of Tesla Canada’s customers in the unfair position of no longer being eligible for the rebate they had expected to receive when they ordered their vehicles, while purchasers of other brands and from other dealers will still receive the rebate during a transition period,” Tesla said in its lawsuit.
The company added “the decision has also already inflicted substantial harm on Tesla Canada.”
Neither the Ontario government nor Tesla provided Bloomberg with additional statements, so we’ll have to watch what this shakes out in the courts. We’ve reached out to Tesla for comment and will update when we know more.
4th Gear: Toyota’s Taking Big Steps In China After Visit From Country’s Premier: Report
There’s been some political tension between Japanese car companies and China in the past, but despite that, Toyota now appears to be making big moves, particularly by cranking up production in the port city of Tianjin by 120,000 additional vehicles, four Toyota insiders told Reuters. According to the news site, this could be just the beginning of a major push by Toyota into the world’s biggest car market:
The Japanese auto maker’s plan to boost annual production capacity by about a quarter in the port city will lay the foundation to increase sales in China to two million vehicles per year, a jump of over 50 percent, the four sources said.
The Tianjin expansion signals Toyota’s willingness to start adding significant manufacturing capacity in China with the possibility of one or two new assembly plants in the world’s biggest auto market, the sources said. Car imports could also increase, they said.
According to Reuters’ sources, Toyota’s going to focus on EVs and on growing its sales network, with Tianjin’s official websites saying Toyota plans to build 10,000 EVs and 110,000 plug-ins each year.
This is a big step for Toyota, as Reuters says the company has been hesitant about taking on major projects in China since protests dealing with the well-known Senkaku Islands territorial dispute erupted in 2012. But apparently Toyota has changed its thinking after a visit from Chinese Premier Li Keqian in May, with Reuters writing:
During the visit, Li toured Toyota’s facilities on the northern island of Hokkaido, and was escorted by Toyota’s family scion and chief executive Akio Toyoda.
Toyoda has since sought to boost his company’s presence in China, a vision that had culminated in an active effort to identify specific ways to do just that, according to the four sources.
Sounds like more Chinese-built Toyotas are on the way.
5th Gear: Subaru Offering More Power and Features in the New Forester For Not Much More Money
Subaru says its all-new 2019 Forester is quieter and larger than its predecessor, plus it gets a 12 horsepower stronger “updated” version of Subaru’s 2.5-liter boxor four and the company’s Eyesight driver-assist features as standard.
After announcing the car this past spring, Subaru just released pricing for the fifth-generation Forester yesterday, saying the base price has only increased by $500 compared to the outgoing model, bringing the cost of getting behind the wheel of a new Forester to $24,295.
Reverse: The Starter Motor Is Born
Neutral: What are your thoughts on SUVs With Sedan Names
The Ford Focus Active is kind of a strange name, and that Detroit News report seems to imply that other small car nameplates could live in the form of crossovers or trucks (like the Mach 1 SUV, for example). Thoughts?