Faraday Future gets some cash, Fiat Chrysler’s feeling confident, solar panels and more await you in The Morning Shift of Tuesday, April 30, 2019.
1st Gear: And Again, With Emphasis
Remember Faraday Future? It’s been a hot second since we’ve heard anything from the Chinese backed, would-be world beater electric car startup beset with problems and scandal since almost day one.
Happily, for Faraday Future at least, it’s appeared to have scored even more cash.
The company has obtained $225 million in bridge financing from private equity firm Birch Lake Associates, LLC. $150 million of that money will go toward providing “greater confidence to FF’s key suppliers and obtain their commitments to support the scheduled production launch of FF 91,” according to a company press release. Also, the money will be used to reimburse about 60 percent of the supplies that Faraday Future owes money to.
So it seems like Faraday is still adamant to launch the FF 91 EV. After that, it says that it will keep developing a vehicle called the FF 81 for the mass market, with a launch date set in 2021.
In addition to the money from Birch Lake, Faraday also launches a $1.25 billion equity capital-raising program with Stifel Nicolaus & Co., which is expected to close this year.
All in all, these are very aggressive means of raising money, something that Faraday Future has been trying to do for a while.
But why anyone would give Faraday Future money is baffling, as the company has faced multiple lawsuits, furloughed employees, halted factory construction because of money reasons and nearly went bankrupt.
I don’t know. Maybe someone at Birch Lake sees something the rest of us don’t.
2nd Gear: “House of Brands”
Yes, this is a real thing that a real human said about his company. And he cited it as a reason why his company will survive the rise of EVs and self-driving cars.
I can never understand why electric cars and self-driving tech are said to be “disrupting” the auto industry, as they both just seem like new technologies to create, design and implement, but I digress. Fiat Chrysler CEO Mike Manley doesn’t think that the industry’s new fields are a threat to his company.
“‘I’m 100 percent sure’ that Fiat Chrysler will be able to survive because ‘we are fundamentally a house of brands,’” he told Reuters in an interview last month, according to Automotive News Europe. “I don’t think that we have any brand that will fit into a bland character. Our brands have shown they will be able to survive.”
Translation: Jeep and Ferrari will be fine.
From the story:
Manley’s vision, like that of his iconic predecessor Sergio Marchionne, is based on the view that distinctive brands such as Jeep, Alfa Romeo and Maserati give the Italian-American company an advantage over mass-market producers.
Manley, 55, who succeeded Marchionne in July a few days before he died, is under pressure to deliver a turnaround of the automaker’s unprofitable Asia business and revamp its European operations amid massive investments needed to guide Fiat Chrysler into the era of self-driving electric cars and new mobility services.
It’s true that Maserati has talked about electrification plans, but what about the rest of the FCA portfolio? In the U.S. at least, all FCA sells are Jeeps and trucks and Hellcats. So unless those suddenly go all-electric overnight, FCA’s presence here is mostly a big gas-burning one. And there’s certainly not much in the way of self-driving anything from FCA.
Take a shot every time a CEO says the word “brand.” I’m already wasted.
3rd Gear: When in Doubt, Lower Prices
Tesla, wouldn’t you know, doesn’t only make and sell cars. It also sells a bunch of other energy solution products, like home batteries, utility power storage and solar panels. But solar panel sales have lagged and Tesla needs to boost them up. How? By cutting prices.
Tesla will reportedly announce today that it’s selling “solar panels and related equipment for up to 38 percent less than the national average price” by system standardization and online orders, writes the New York Times. Yet, the outlet points how that it’s unclear how Tesla will pull this off:
But it is not clear whether the strategy will work or is even feasible. Tesla and its chief executive, Elon Musk, have struggled to deliver products on time that they announced with great fanfare, including a $35,000 version of its Model 3 electric sedan. The company has also struggled with quality problems.
The solar industry is known for intense competition and low profit margins. In the first three months of the year, Tesla fell to third place behind Sunrun and Vivint Solar in installations, according to Wood Mackenzie, a research and consulting firm.
Apparently, in order to help reduce costs, buyers will have to “do many of the tasks Tesla employees used to do,” like take pictures of equipment like electric meters and circuit breaker boxes to cut down on on-site trips from the company.
So if you want to save money on a Tesla solar panel, it sounds like you’re going to have to really work for it.
4th Gear: Oh Canada
I forgot the Lexus NX is a thing and I am sorry for it. But folks in Canada should be happy with it, because Toyota will start building the compact crossover there soon.
The investment will amount to “hundreds of millions of dollars” and might up employment in the Canadian auto industry, according to Bloomberg. Both gas and hybrid versions of the NX will be built at the Cambridge, Ontario plant starting in 2022.
From the story:
This marks the first time the vehicle will be produced outside Japan.
Toyota Canada said last year it would invest C$1.4 billion to build a new flexible production platform. That will be used to build the NX and “there will be some further investment required,” Fred Volf, president of Toyota Motor Manufacturing Canada Inc., said in an interview at the plant, which is located about 100 kilometers (62 miles) west of Toronto. It’s unclear yet whether new jobs will be added.
“There may be some increase in employment, but that really determines what that next generation of NX has in content and complexity,” Volf said.
The decision to build the Lexus NX in Canada comes after the automaker had said previously it plans to move production of the Corolla from Ontario to a new plant under construction in Alabama, which it will run jointly with Mazda Motor Corp. The two companies plan to start output at that new factory in 2021.
The Lexus RX, Toyota Corolla and RAV4 are all built in Ontario-based plants. Toyota, according to the Canadian government, is the biggest car manufacturer in the country.
5th Gear: Samsung + Google
There is no standard or uniform method when it comes to the infotainment systems in cars. Either automakers attempt to build their own software or they outsource. Fiat Chrysler is choosing the latter.
FCA says that all of its cars will be connected by Google and Samsung by 2022. The tech companies will provide music, video, self-driving capabilities and future car-sharing abilities, according to Reuters.
From the story:
Fiat Chrysler Automobiles NV (FCA) will use Google’s Android operating system globally instead of a mixture of software that varies by region, a spokesman said. The automaker will also use a cloud-based digital platform from Samsung Electronics Co Ltd’s Harman unit.
FCA said it will launch the new capabilities in the second half of 2019. The company said the system will aid owners “by predicting maintenance needs, locating fuel and charging stations, receiving traffic prompts and restaurant offers and providing live customer-care assistance at the push of the button.”
Reuters also points out that FCA hasn’t spent much on developing self-driving tech (though it has the Power of Brands). So while that saves it a lot of money, it also makes it dependent on outside companies to keep it competitive. That means it’s only as good as a third party provider.
Will it be beneficial in the long run to put such an important part of future product in the hands of an outside company? Guess we’ll find out!
Reverse: Land Rover!
Neutral: Would You Invest in Faraday Future?
Let’s say you had a billion dollars and you had to invest it somewhere. Would Faraday be the first on your list?