Auto sales are bad in Europe, Rivian wants to raise billions more, and the Chevy Bolt fire thing sure seems bad. All that and more in The Morning Shift for September 16, 2021.
1st Gear: There Was Another Chevy Bolt Fire And Now GM Says Some Owners Should Park Their Bolts 50 Feet Away From Other Cars
The Chevy Bolt has been the subject of recall after recall, because of potential fire issues, which is not, one can surmise, a good thing. GM has also said in recent days that it might buy back the Bolt from some owners, if they made enough noise, more or less.
The new advice is likely to rankle owners who are already limiting their use of the Bolt to avoid overheating the battery and risking a fire. The parking guidance — recommending a distance of 50 feet from other parked cars — is especially difficult for owners in urban areas. GM has confirmed 10 fires. The National Highway Traffic Safety Administration said the agency has found 13 fires in Bolts, but the company hasn’t confirmed the additional three are part of the current recall issue.
The Bolt normally can go 259 miles on a charge, but that has been limited by GM’s guidance to avoid a fire. The automaker told Bolt owners to limit the charge to 90%, plug in more frequently and avoid depleting the battery to below about 70 miles of remaining range. They’re also advised to park their vehicles outside immediately after charging and not leave them charging indoors overnight.
The company will be telling Bolt owners who are concerned about parking in public places that it recommends keeping 50 feet from other cars in garages and lots, spokesman Dan Flores said.
This has been nothing short of a disaster for GM, even though the Bolt fires are in the low double digits and also LG deserves some of the blame. It is a shame because, in an age where we’re trying to encourage EV adoption, things like this don’t help. Still, this feels like a growing pain more than anything, much in the same way that internal combustion engine cars were unreliable for a long time early days. Decades, even.
Rivian, the Amazon.com Inc (AMZN.O)-backed electric vehicle maker that registered last month for a stock market debut, is aiming to raise between $5 billion and $8 billion with the listing, making it one largest U.S. initial public offerings of recent years, according to people familiar with the matter.
Rivian, which counts Ford Motor Co (F.N) and T. Rowe Price (TROW.O) among its investors, registered the IPO confidentially with U.S. regulators last month. It is seeking a valuation of about $80 billion in the listing, which is expected to land in late October or November, the sources said.
Rivian declined to comment.
If Rivian raises $8 billion in the IPO, that would rank as the fourth biggest of the past decade in the United States. Only three other companies have raised more than $8 billion in IPOs since 2011, according to Dealogic: Alibaba, which raised a world-record $25 billion in 2014; Facebook, which raised $16 billion in 2012; and Uber, which raised $8.1 billion in 2019.
This is in large part because of the chip shortage, of course, which doesn’t seem like will end any time soon. Interestingly, it’s also because demand for EVs and PHEVs there is high; the automakers just can’t make enough of them.
New-car registrations fell 18% in August and 24% in July from year-ago levels, the European Automobile Manufacturers’ Association said Thursday. Sales are now up just 13% for the year, less than half the percentage increase posted at the year’s halfway point.
Auto production is being suppressed by the global semiconductor shortage that the chief executives of Volkswagen AG, Daimler AG and BMW AG have warned will linger well into next year. And if scarce inventory weren’t enough to drive up prices, carmakers also are prioritizing their most lucrative models as the number of vehicles they can produce is constrained.
“The chip shortage is causing production losses, and demand that’s actually high can’t be met,” EY said in a note. “Traditional combustion vehicles have been hit the most, while the boom for plug-in hybrids and electric cars continues.”
The July and August figures are the worst for the two months since the tail end of the Eurozone economic crisis in 2013. The declines were broad-based, with Europe’s biggest car markets — Germany, France, the U.K., Italy and Spain — all seeing double-digit drops each month.
That is where hundreds of gallons of gas leaked into the sewer system, and production being halted at Ford’s Flat Rock Assembly Plant until next week. The Detroit News says that Ford will be giving $500 to 1,200 households impacted by the leak.
Ford Motor Co. will send $500 to every household affected by a gasoline leak from the automaker’s plant into the city’s sewer system, representatives said.
With 1,200 families evacuated, that would mean Ford would pay out at least $600,000 in addition to others affected by the gas leak.
The leak from the Ford assembly plant was first detected on Aug. 30 and appears to have started “no earlier than” Aug. 26, according to Bob Holycross, Ford’s vice president of sustainability, environment and safety engineering, who said Tuesday afternoon at a press conference that the company believes the 1,400 gallons of gasoline seeped out slowly over in the days following.
“It was not a matter of ... a complete separation of a pipe or something like that,” said Holycross at the conference, which was held inside the mostly vacant plant in Flat Rock. Reporters were told that the plant itself had been deemed safe and clear of toxic chemicals.
It’s unclear to me what this is intended to accomplish other than being a goodwill gesture, though possibly Ford is trying to head off litigation.
The $500 will be mailed in the form of certified check, said T.R. Reid, Ford’s director of corporate and public policy communications. Some checks may arrive before residents of the families evacuated are cleared to return to their homes.
“As they return home, they’ll have access to it,” said Reid. “So I can’t tell you that it’ll be there Friday, Monday, Wednesday, but the process has begun. And they’ll be sent directly to them in a secure way.”
A long-postponed criminal trial tied to Dieselgate is now underway in Germany, Bloomberg reports, involving four executives. I can’t believe that this is still a thing, but, then again, just when I thought I was out, they pull me back in, etc.
The trial — starting six years after the scandal broke — is the first criminal case to target executives at VW’s German headquarters who allegedly backed the idea of dodging emissions tests with a software trick.
The German legal system typically doesn’t allow public identification of those on trial.
The unnamed managers were charged in 2019 with having authorized that vehicles be equipped with a so-called “defeat device” that masked the actual emissions of the cars during testing. The case covers 9 million cars sold in Europe and the U.S.
“As executives, they were decisively responsible for the fact that emissions rules were transgressed in Europe and the U.S.,” prosecutors said at the start of the trial in Brunswick (Braunschweig in German) on Thursday. “The rules were in place to protect the environment and the health of people.”
It’s in the interest of the staff, the shareholders and the company as a whole that the facts that lead to the diesel crisis will be brought to light completely, Volkswagen said in an emailed statement.
The court will determine what responsibility individuals may have had, the automaker added.
In the first years of the 20th century, however, that industry was a mess. There were about 45 different car companies in the United States, most of which sold only a handful of cars each year (and many of which had an unpleasant tendency to take customers’ down payments and then go out of business before delivering a completed automobile).
Sound familiar at all?
I am in Michigan, land of the cars. I saw a Chevy Cruze with tinted windows yesterday; anything is possible.