Good morning! It’s Friday, April 26, 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: ViFast Handed Another $1 Billion
Vietnamese automaker VinFast is really trying to get itself taken seriously as a powerhouse automaker. It’s got a lineup of new electric vehicles, has established brick and mortar dealers here in the U.S. and has already irked a few auto journalists in the process. However, it doesn’t seem to be doing the one thing any good automaker should: sell cars.
Now, the company has been handed another billion dollars from its supremely wealthy owner, reports Automotive News. The new round of funding from company founder Vietnamese billionaire Pham Nhat Vuong, is meant to help the firm expand its operation around the world. As Automotive News reports:
The move marks his strongest backing yet for the Vingroup JSC unit touted as a possible challenger to Tesla Inc.
“We will put all our resources into VinFast,” Vuong told a meeting of shareholders in Hanoi, without giving a timing for the cash infusion. He described VinFast as the future of Vingroup, and said there’s no question of letting the company go.
VinFast, which forayed into the U.S. in 2022, has been bleeding cash as it fights with the likes of Tesla for a share of the increasingly competitive EV market. It’s investing $2 billion in a manufacturing plant in North Carolina, besides plans for factories in India and Indonesia.
The rollout of Vinfast’s electric model, called the VF8, has been a rough affair, with several reviewers claiming the car simply wasn’t ready for sale in America. This coupled with a plummeting share price that now sees VinFast valued at around 90 percent less than it was in August, have all called the firm’s future into question.
Despite its struggles, the company is hoping to break even on its investments next year, and says it could even turn a profit by then. In its most recent financial filings, the firm cut its losses to just over $600 million.
2nd Gear: Honda Plows Billions Into Canadian EV Plant
Honda saw VinFast getting an extra billion dollars and said “hold my beer,” it seems. The Japanese automaker has just pledged a massive cash injection into its North American operation that will see it create a new electric vehicle hub north of the border in Canada.
The Japanese automaker has just announced an $11 billion investment in its facilities in Canada, reports CNBC News. The huge cash injection will support the construction of new assembly and battery plants in Ontario, Canada, as well as other facilities integral to the design and assembly of electric cars. As CNBC News reports:
The company said the new North American electric vehicle epicenter will include new assembly and battery plants as well as other facilities to support production of all-electric and fuel cell-powered vehicles.
Honda said vehicle production will begin in 2028, with annual vehicle capacity of 240,000 units once it is fully operational. The investment in Alliston, Ontario, is expected to greatly assist in Honda’s goal of exclusively offering all-electric and fuel cell-powered vehicles by 2040.
Honda’s commitment to EVs comes amid turmoil in the electric car world, with many of the company’s rivals backtracking on their EV plans, delaying them or canceling some altogether. This week alone, Toyota pushed back its plans to construct EVs in the U.S. from 2025 until 2026 as it continues making millions thanks to its commitment to hybrid vehicles over electric models.
Honda, however, is sticking with its pivot to battery power, and says that the new site in Canada could create as many as 1,000 jobs across the EV supply chain.
3rd Gear: Boeing Profits Drop As Deliveries Slow
Prepare for some shocking news, a series of dangerous mechanical issues, a government investigation into production quality and the mysterious death of a whistleblower might have a negative impact on your profits. Shocking, I know.
That’s the kind of shock Boeing has been in for this week, after it announced that first quarter profits for 2024 were down as a result of a slowdown in deliveries, reports Reuters. The Seattle-based aerospace company has been forced to cut its output amid a federal investigation into its quality control practices following a series of failures with its 737 Max aircraft. As Reuters explains:
Quarterly revenue was $16.57 billion, down from $17.92 billion a year earlier but beating expectations of $16.23 billion. Boeing and Spirit Aero shares were down about 3% in early afternoon trade.
Boeing CFO Brian West told analysts second quarter cash burn would be “sizeable” although he expected free cash usage to improve from the $3.93 billion cash burn in the first quarter. That was less than the $4.49 billion analysts expected following the Jan. 5 accident involving a nearly new 737 MAX 9 jet.
“Well it could have been worse. While the loss and the cash outflow are not as bad as feared, the company is still clearly facing some serious challenges,” Vertical Research Partners analyst Robert Stallard said in a note.
A cap on Boeing’s output has been imposed by the Federal Aviation Administration after it gave the company 90 days to clean up its production practices. This deadline expires on May 29, after which the company may be permitted to return to capacity if the feds are happy with the progress it has made.
The troubles for Boeing are projected to continue after that deadline, however. Reuters reports that in 2026 the company has roughly $8 billion in debt coming due, which will further hit its earnings.
4th Gear: The Emily GT May Actually Reach Production
Let’s finish the morning off with some good news, as it turns out that the slightly excellent Emily GT EV cooked up by a bunch of ex-Saab engineers might actually hit production. The car, which has been designed by Swedish startup Nevs looked on rocky ground last year, but now it’s got the backing of Canadian EV company EV Electra, which now claims to have a factory ready to go in Europe.
EV Electra has reportedly purchased a factory in Italy that could begin producing Emily GT cars “within the next few years,” reports British outlet Autocar. As the site reports:
CEO Jihad Mohammad posted on LinkedIn: “Yes, we did make an offer to buy an automotive factory in Italy and finally it was approved yesterday (not the Maserati factory), and in this new venue we will build electric cars that will make everyone shocked.
“We have more than [a] few models now, after multiple acquisitions that happened in [the] last two months, and one more is happening this week that will allow us to be on top of our game.
“I promised my team not to give more details, since our investors need to know before everyone else. Then an official press release will clear all the questions.”
It remains to be revealed if the cars assembled in Italy will be Emily GTs or another model from EV Electra. However, at the end of 2023, the company’s new backers unveiled four iterations of the Emily GT, including an electric sedan, shooting brake and convertible. If just one of those makes it to market I’ll be a happy boy.