Good morning! It’s Monday, June 24, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Fisker Starts Selling Off Its Assets
Electric automaker Fisker is preparing to wrap things up after filing for bankruptcy last week. This also comes after seemingly everything went wrong for the cursed automaker. Now, after holding out hope for a fresh injection of funding, the company is preparing to sell everything off as liquidation approaches.
Fisker has a stock of more than 4,000 Ocean electric SUVs that it will now try and offload as part of a liquidation sale, reports Automotive News. The stockpile of EVs and the automaker’s other remaining assets will be sold off in an attempt to recoup the almost $850 million that Fisker owes various bondholders. As Automotive News reports:
Fisker filed for bankruptcy protection in Delaware on June 17 after burning through cash in an attempt to ramp up production of its troubled Ocean crossovers. The company initially said it would seek additional financing and continue “reduced operations,” but Fisker’s attorney Brian Resnick said at the hearing in Wilmington, Del., the company does “not currently anticipate being able to obtain financing.”
Resnick told U.S. Bankruptcy Judge Thomas Horan that the company planned to liquidate its assets, and it has reached a tentative deal with a single buyer for all of its 4,300 vehicles.
The California-based company, founded by automotive designer Henrik Fisker, was never profitable, with about $273 million in revenue in 2023 and a net loss of $940 million. This is the second automaker controlled by Henrik Fisker to go into bankruptcy.
The sale of the remaining stock of Fisker vehicles is projected to fetch a “fraction” of the amount that the company owes various creditors. In fact, if the cars were to sell for their latest retail price of around $25,000 then the sale would only amount to around an eighth of the $850 million that Fisker owes.
There were whisperings that Fisker had managed to find an automaker to partner with in order to save itself and its customers. However, Automotive News adds that a deal with Nissan fell through in March, which ultimately led to last week’s bankruptcy.
2nd Gear: Prosecutors Recommend Criminal Charges For Boeing
If there’s one company having a worse 2024 than Fisker, it’s probably Boeing. The American plane maker has been hit with scandal after scandal as its 737 Max aircraft have been falling apart in the skies, quality control issues have been uncovered at its factories and the feds launched other investigations into its other aircraft. Now, the Justice Department has been encouraged to hit the company with criminal charges.
According to a report from Reuters, U.S. prosecutors are recommending that senior officials in the Justice Department file charges after investigators found that the company violated a settlement related to two fatal crashes involving its 737 Max planes. As Reuters reports:
In May, officials determined the company breached a 2021 agreement that had shielded Boeing from a criminal charge of conspiracy to commit fraud arising from two fatal crashes in 2018 and 2019 involving the 737 MAX jet.
Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation.
Boeing declined to comment. It has previously said it has “honored the terms” of the 2021 settlement, which had a three-year term and is known as a deferred prosecution agreement. Boeing has told the Justice Department it disagrees with its determination that the company violated the settlement, Reuters reported this month.
Neither party has so far commented on the recommendation, however, Reuters adds that it understands both Boeing and the Justice Department are working towards a resolution. This means we’re now all waiting with bated breath for the outcome of this hearing, the findings of an investigation into the 787 Dreamliner and another investigation into quality control at the plane maker.
3rd Gear: U.S Dealers Finally Get Their Computers Back
There was a rare moment last week when we had to feel a dash of concern for America’s car dealerships after they were hit by a computer outage that meant they couldn’t sell cars or offer repairs. The outage was caused by a cyberattack at services provider CDK Global and it left many dealers without IT facilities for several days.
Now, more than five days after the initial attack bricked computers across America’s dealerships, it sounds as if things are finally getting back to normal. However, Automotive News reports that disruption could continue for a few more days. As the site explains:
CDK Global, in a note to customers, for the first time referred to the crippling cyberattacks that began June 19 as a ransom event and told dealers the restoration process for its systems was underway.
“We anticipate the restoration process to take several days and not weeks for the major applications and ask for your continued support as we bring systems back online,” the company’s June 22 update said.
A subsequent CDK note to customers midday on June 23 reiterated the timeline and said restoration was continuing.
A hacking group has claimed responsibility for the attack, with Bloomberg reporting that they demanded tens of millions of dollars to undo their work. CDK was planning to pay the ransom, the site reported.
4th Gear: EV Sales Are Finally Eating Into Oil Demand
Let’s finish The Morning Shift with a dash of good news, as it appears as though the rising sales of electric vehicles is finally having an impact on global oil demand. According to a new report, as electric vehicle sales have continued to rise, demand for oil around the world has begun leveling off. It’s not a decline in demand overall, but it is a welcomed slowing in the use of oil around the world.
According to a report from Canary Media, the leveling off means that by the end of this decade, demand for oil will have reached its peak and should start to come down. This, the site says, is a result of the rise of electric vehicles and clean energy technologies. Per Canary Media:
In advanced economies, demand for oil has been decreasing for decades, but it’s still rising in China and India. As a result, IEA forecasts that demand for the planet-warming fossil fuel will grow, albeit slowly, until 2030.
The plateau is expected to happen for two reasons, per the IEA: increasing global adoption of electric vehicles and the implementation of higher efficiency standards for gas cars.
Spurred by rapid uptake in China, EV sales could reach around 17 million this year — accounting for one in five cars sold globally, according to the IEA’s “Global Electric Vehicle Outlook 2024.” But by 2030 that picture is set to change dramatically; EVs could make up half of all car sales worldwide. While EV market growth in the U.S. has been shaky, hybrid sales are booming — and the report predicts that net-zero emissions targets, policy incentives, and falling EV prices will help sales pick up in the coming years.
In the coming years, strict emissions rules are set to come into force around the world, which will further the uptake of electric cars and other clean transport options. In turn, this will further reduce the demand for oil around the world.
However, Canary points out that oil usage will be unlikely to drop enough to hit emissions targets set out in the Paris climate deal. For that to happen, global oil usage needs to drop by 75 percent by 2050.