EVDigest Weekly Newsletter

Good morning and welcome to the second issue of the EVDigest's weekly newsletter covering the business and policy of EVs. 

In today's newsletter:- Headlines: House passes historic climate bill | Lawmakers voice concerns over FSD - In Other News: Tesla new-registrations, Nikola takeover rumors and Fisker fights MS- The China Report: Xiaomi's EV plans, NIO smartphone and CATL in Hungary - Last Week Today: EV news you might have missed

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Automakers' Angst Continues Following Passage of The Inflation Reduction Act 

On August 12, the House of Representatives approved the Inflation Reduction Act, which now awaits President Biden's signature. The bill includes new EV tax credit provisions but not all automakers are celebrating. In fact, most are not.

Audi, Porsche and Kia said on Friday that buyers their EVs will lose access to federal tax credits once President Biden signs the bill. Ford, GM, Toyota, Rivian and a host of others had also expressed concerns over the price caps and stringent supply chain requirements introduced by the bill.  

Set to expire in 2032, the new EV credits would be limited to trucks, vans and SUVs under $80,000 and cars under $50,000. The main source of controversy is the bill's escalating sourcing requirements. At least 40% of critical minerals must be extracted or processed in the U.S. or by a U.S. free-trade partner or recycled in North America. That percentage rises every year, reaching 80% by 2027. Similar restrictions are phased in on the percentage of value of components, with a 100% U.S. or free-trade partner requirement by 2029 in order for vehicles to qualify.

Lucid, Fisker and Rivian, meanwhile, have told customers that they will still qualify for the $7,500 credit under the previous regime if they sign binding agreements before President Biden signs the bill into law.

Ralph Nader Piles on Tesla after California DMV Says Company is Falsely Advertising FSD Features

The pressure on Tesla is only heating up following a report from The LA Times which revealed that the California DMV has accused Tesla of false advertising regarding the promotion of the company's autopilot and FSD technologies. The complaint was filed on July 28 with the Office of Administrative Hearings.

In a statement released on August 10, Ralph Nader called on the National Highway Traffic Safety Administration (NHTSA) to immediately issue a safety recall removing FSD technology from every Tesla.

Two U.S. lawmakers - Senator Gary Peters and Representative Jan Schakowsky - have formally requested a briefing by NHTSA on the ongoing probes into crashes of Tesla vehicles involving AutoPilot and FSD systems, saying that "federal investigations and recent reporting have uncovered troubling safety issues." 

Amidst all of this, Steven Cliff, who heads NHTSA, announced on Friday that he plans to leave the agency in September to become Executive Officer of the California Air and Resources Board (CARB). Cliff, who held the top NHTSA job for just three months, will be replaced by Chief Counsel Ann Carlson.

In Other News

Tesla ($TSLA) U.S. new-vehicle registrations up 61% in first half. January-June 2022 registrations exceeded 228k, handily beating BMW's second-place total of just under 158k. Aside from Tesla and Genesis, all major luxury brands posted year-over-year declines in first-half registrations. More broadly, Tesla held a 68% marketshare of the full-EV segment. EVs made up about 5% of U.S. light-vehicle registrations in the first half, up from 2.5% last year.

Nikola ($NKLA) takeover speculation. Vague rumors began circulating that Toyota and Stellantis may be interested in a takeover of Nikola Motors. The speculation comes after a recent CEO transition announcement and the company's acquisition of Romeo Power.  

Fisker ($FSR) Challenges Report by Morgan Stanley's Adam Jonas. On Instagram, Henrik Fisker challenged a report from Adam Jonas, saying that it relied on incorrect modeling assumptions. The research report followed Fisker's Q2 '22 earnings and put pressure on the company's shares.

GM ($GM) RICO case against FCA rejected by appeals court. The three-judge panel of the U.S. 6th Circuit Court of Appeals upheld a 2020 ruling that threw out GM's racketeering suit against rival FCA, now part of Stellantis NV ($STLA). The suit alleged that FCA bribed UAW union officials in the bargaining process, driving up costs for GM. 16 former FCA and UAW employees have pleaded guilty in a federal corruption investigation.

The China Report

Xiaomi enters the EV game. The company officially registered the Xiaomi EV, Inc. subsidiary with registered capital of $1.55 billion. It now has 300 employees, led by founder and CEO Lei Jun. Xiaomi announced that it plans to spend $10 billion and launch its first EV in 2024.

NIO’s ($NIO) phone team exceeds 300. While Xiaomi is getting into the car business, NIO is wading into smartphones. NIO nabbed Yi Wei, SVP at Chinese beauty app Meitu, to lead its smartphone software division. The phone team has reportedly grown to 300 plus, with many joining from OPPO, Meitu and Huawei. Reports suggest that NIO's smartphone will be powered by Qualcomm's flagship Snapdragon processor. 

Xpeng ($XPEV) hits highs and lows. Xpeng unveiled its Flagship G9, receiving 22,819 orders in just 24 hours. But it is also responding to video of a deadly accident in which an Xpeng P7 rear-ended a stationary vehicle on a highway. In a Weibo post, the driver of the P7 claims that the autopilot feature was on. The company said that it will fully cooperate with the investigation.

Tesla ($TSLA) China deliveries drop 64% MoM. After a record month in June, Tesla delivered 28,217 vehicles in July. The drop was due to intentional shutdowns at GigaShanghai aimed at upgrading production lines to increase output to 750,000 EVs per year. In a Twitter post on August 14th, Musk celebrated the millionth Tesla produced at the Shanghai factory. The company has made more than 3 million vehicles globally.

CATL plans €7.34 billion battery production facility in Hungary. It's second European battery plant (the first in Germany), the facility is expected to have an annual capacity of 100 GHw. According to a post on the company's WeChat account, Mercedes-Benz will be the first and largest customer. The plant will also sit just ~220km from NIO's battery swap plant. 

Last Week Today

• Rivian ($RIVN) sticks to production guidance. Rivian maintained its full-year of 25k vehicles and reported revenue of $336M, beating estimates. But it posted a wider than expected per share loss of $1.89. It also showed progress on a 650k sq. ft. addition to its factory in Normal, IL, which will bring the plant to over 4 million sq. ft. The new area will be used for a manufacturing line of Rivian's next generation drive units.

• Canoo ($GOEV) Gamma builds continue, new financing announced. In its earnings, Canoo shared that its total Gamma builds now number 89, and that more than 256 crash tests have been completed. It also announced that in addition to the Walmart order of up to 10k vehicles, non-binding orders were up 56% to 26k. However, cash and cash equivalents totaled just $34M at the end of the quarter. In light of this, Canoo announced a new $200M ATM facility.

• XOS ($XOS) increases deliveries and adds new dealer. Revenue was up 40% QoQ to $9.8M, just $.024M shy of analyst estimates. The company also announced that 17 dealership locations were added through its partnership with Gabrielli. XOS expects 150-200 unit deliveries for second half of ’22.

• Arrival ($ARVL) falls on production cuts. Shares fell 25% on an EBITDA loss of $89.6M and a lower production forecast for ’22 (from 4,400 to 20 vehicles). Arrival also announced a $300m ATM facility and elaborated on major cost cutting plans which include laying off up to 30% of its workforce and pausing its bus and car programs.

• Workhorse ($WKHS) stumbles. Shares dropped 24% the day after earnings before somewhat recovering during the week. The company cut delivery guidance from "at least 250" to "between 150-250" units and expects revenues for FY 2022 of $15-25M. It reported a Q2 net loss of $21.2M.

• Nikola ($NKLA) CEO transition. CEO Mark Russell to retire by end of '22 and be replaced by President Michael Lohscheller, ex-Opel CEO, who joined in Feb. News comes on heels of earnings, which announced Tre BEV deliveries and the acquisition of Romeo Power.

• Ford ($F) reopens F-150 Lightning orders but raises prices. Standard models receive a range boost to 240 miles. But Ford is raising MSRPs for the first time since May '21, citing “significant material cost increases and other factors”. The base model, the F-150 Lightning Pro, now starts at $46,974. The Platinum Extended Range now goes for $96,874.