By on September 14, 2020

Following a scathing report from Hindenburg Research that called Nikola a fraudulent company largely dependent upon the blind excitement surrounding electric vehicles, the accused has finally issued a response. On Monday, Nikola released a bulleted letter suggesting the report was the act of an opportunistic short seller that was attempting to take advantage of the period immediately proceeding the announced partnership with General Motors. While Hindenburg didn’t exactly hide that aspect of itself in its own report, it frames the business as only profiting off companies that weren’t above board to begin with. It also received support from Citron Research, which said it likewise thought Nikola needed to be scoped out by the Securities and Exchange Commission (SEC) and promised to help pay for half of any legal fees incurred as a result of Hindenburg’s reporting.

Meanwhile, Nikola was crafting its rebuttal after founder Trevor Milton explained he had to wait on a comprehensive response because he was already in contact with the SEC. As his constant Twitter updates started to become counterproductive, this was likely a wise decision. The response dropped on Monday, clearing a handful of items up while making a bunch of other aspects seem even more suspect. (Read More…)

By on September 11, 2020

While we’ve suspected that electric vehicle startups and green tech, in general, is probably a little overvalued, we’ve never accused anyone of outright fraud. Burgeoning automakers have a tendency to over promise and under deliver. Throughout history, this has occasionally gotten them into serious trouble. But it’s also how the game is played, especially when you’re new to the scene and need to distinguish yourself from giant entities who would just as soon crush you in lieu of risking the eventual competition. Nikola is a perfect example of this and built a hype train so swift that legacy brands could only hope to buy it out or invest and share in the fruits of its labor before it sped away.

But what if it wasn’t ever growing any industrial fruit?

That’s the claim being made by Hindenburg Research — which specializes in short selling, pointing to firms on the cusp of financial disaster (hence the name), and attempting to bust businesses the Securities and Exchange Commission (SEC) might be interested in. The financial research firm has suggested that Nikola founder Trevor Milton had misrepresented what the company was actually capable of in terms of product, with the intent to mislead investors into thinking the company should be incredibly valuable. It reads like a hit piece and was accused by Milton of being just that. However, there are issues brought up in the report that are still worth examining.

(Read More…)

By on August 7, 2020

One of the strangest anomalies in the automotive industry is the way electric vehicle startups (like technology companies in general) seem to draw limitless support from investors while established automakers don’t receive nearly the same kind of love  even when transitioning toward EVs.

There’s a logic behind this, however. Green tech is overwhelmingly trendy at the moment, even if some of it lacks a comprehensive game plan to actually save the environment, and financial backers are always looking to get in on the next big thing before anybody else  resulting in scattershot investing that sometimes coalesces into a major victory for new firms possessing sufficient moxie.

But it hasn’t helped the auto industry’s largest players, who are seen as dinosaurs using the blood of their forebears to amass their fortunes. They lack the presumed purity of brands like Tesla or Nikola (clever name), even though their financial goals seem largely the same.

A potential solution to this problem is to distance tech-focused entities from the core business. (Read More…)

By on July 9, 2020

On Wednesday, Lucid Motors announced plans to open 20 retail locations and service centers across North America by the end of 2021. They’ll be called “Lucid Studios,” helping the company herald in what it considers “new standards for sustainable transportation” via the sale of luxury vehicles.

You know as well as we do that this type of language is customary among EV startups trying to sell you on the concept of shopping your way into a healthier environment. Yet the strategy appears to be working. Electric vehicle firms seem to enjoy nothing but victory on this continent right now — even if they seem to be dying off in places like China — and are poised to make big moves over the next few years.  (Read More…)

By on July 9, 2020

Fisker Inc. is reportedly in talks to go public after seeing how well other electric vehicle manufacturers (prospective or otherwise) have performed on Wall Street this year. In case you missed it, Tesla became the most valuable automaker on the planet this summer, while startup Nikola saw its shares explode through the ceiling ⁠— despite having never manufactured a single product for purchase.

It seems like complete madness, so it aligns perfectly with just about everything else that’s happened in 2020.  (Read More…)

By on June 30, 2020

Early adopters willing to toss cash at an exciting idea have been the lifeblood of modern-day electric vehicles. Without investors believing in Tesla and cramming its sweet cheeks full of cash, it never would have gotten to a point where it could actually manufacture cars. The same is true for the thousands of people dropping deposits on vehicles that have yet to be produced, let alone tested by the community.

It’s time to do the same for American hybrid truck designer Nikola, true believers. The all-electric startup is now accepting deposits on its prospective pickup truck. Due to arrive in a few years, the unit currently has no prototype. Under normal circumstances, we’d continue ribbing the company via monthly updates until it dissolves like Faraday Future. But its ludicrous market valuation seems to indicate that the hype is very real, even if the same cannot be said about its products.  (Read More…)

By on June 30, 2020

Chinese electric car startup Byton will reportedly idle production next month as it attempts to reorganize itself. While the coronavirus emerged as a villain in this play, the issues confronting Byton actually seem pretty dire. The company isn’t just idling factories to address a health crisis, it’s shutting things down for six months while it engages in more fundraising and tries to pay what’s owed to employees.

That’ll be tough with no normal income. Byton has already furloughed a large portion of its staff in California and plans to cease all production in Nanjing. While we knew the PRC’s approach to electrification would ultimately result in countless EV startups going under, we didn’t expect Byton to be among them. Slick products, good marketing, and interesting designs made it seem like it could go the distance — now it seems wholly preoccupied with survival. (Read More…)

By on June 24, 2020

Following reports that Rivian might decide to move a large portion of its operations out of Michigan, news has reached us that it’s all but abandoning the Mitten State for sunny California.

Starting its life as Avera Motors in Florida back in 2009, the EV startup moved to Plymouth, Michigan in 2015 to poach talent from the Big Three and lay down some roots. However, the company doesn’t appear to have wormed its way into the soil all that deeply. It now plans to move a sizable portion of its operations to Irvine, California, with some employees heading to its plant in Normal, Illinois, to prepare for production.

This has got to be a slap in the face for some Michigan residents, since many were instrumental in the development of Rivian’s first models. The business fired a gaggle of people at its engineering and design center near Detroit at the start of June, only to slot in a couple of high-paid executives. Now it’s starting to look like it may pull up stakes and skip town. (Read More…)

By on June 9, 2020

Nikola, the Phoenix-based EV startup that hopped on the Nasdaq last week, finds itself awash in capital despite not having much to show for itself it terms of sellable product.

No matter, as it doesn’t take a sound business model or originality to thrive on Wall Street. Nikola hasn’t even seen fit to come up with a unique moniker for itself and instead uses the scraps left by Tesla Motors’ not using the full name of the inventor that serves as its inspiration. However, Nikola is designing battery/hydrogen-driven semi trailers and pickup trucks — which are the freshest fad in the industry at present. Investors took notice and pushed Nikola’s market cap past $26 billion on Monday. It just kept climbing, too, with only the eventual promise of product and profitability to spur them on.  (Read More…)

By on March 23, 2020

With the way China organized its great leap forward into electrification, we knew it would bury hundreds of automotive startups in the process. By propping up countless businesses, China ensured it could boast more new EV manufacturers than any other nation on the planet. Yet most  industry watchers presumed there would be a low survival rate once these fresh firms attempted to transition into legitimate automakers. Some analysts predicted only 10 percent would still be in operation by 2023, while others said 1 percent was probably more realistic.

While this trial by fire seemed poised to weed out lesser-known companies, we’ve seen major players struggling of late. One of them is NIO — a company broadly viewed as a Tesla rival, but which is probably most famous for building the EP9 electric hypercar that traveled the globe to smash EV records in 2017. NIO had a tough 2019, posting a $479-million loss during the second quarter and announced the elimination of 2,000 employees — that’s after it sold its Formula-E team, closed an office in California, abandoned at least one planned factory, and ditched one new model mid-development.

The company now openly acknowledges that it might not survive through 2020.  (Read More…)

By on March 10, 2020

Colorado has been considering allowing automakers to sell electric vehicles directly to consumers, but pushback from dealerships complicated things. Senate Bill 167 was intended to level the playing field against Tesla, which already engaged in direct sales, by opening up the door for rival electric vehicle manufacturers to similarly bypass the dealership model.

However, dealer groups noticed the language in the bill effectively permitted any automaker producing EVs to engage in direct sales, Naturally, they cried foul. The bill had its final legislative hearing on Monday, and its new language identifies a difference between a legacy automaker with existing storefronts and EV firms without them.  (Read More…)

By on October 15, 2019

Faraday Future FF 91 rear

The founder of Faraday Future, Yueting Jia, has filed for bankruptcy and restructuring under Chapter 11 in the United States, according to a statement released by the company. The decision allows Jia (known within the company as “YT”) to address his debts in China, which can be measured billions, so his ownership of FF can be transferred to creditors.

Due to Faraday’s repeatedly broken promises and clandestine way of doing business, we’ve never had an overabundance of faith in the company. While that view hasn’t changed, the corporate statement frames Jia’s U.S. bankruptcy as a positive.  (Read More…)

By on August 15, 2019

Nio, one of China’s biggest EV startups, is confronting difficult times, though the primary reasons for its plight are less than obvious. Automotive startups have a low survival rate, but Nio was presumed to be the next big thing in vehicular electrification. It looked poised to become one of the few EV companies that would survive in Asia, likely serving as China’s response to Tesla, and even had a successful Formula E racing team to showcase its engineering might.

We sad had because Nio sold that team this year. It also needed to recall 4,800 vehicles after reports of three catching fire, endured a sizable sales drop, witnessed its share price plummet, announced plans to layoff 10 percent of its workforce, and just lost one of its co-founders.  (Read More…)

By on April 16, 2019

Over the past several years, the Chinese government embarked on an aggressive electric vehicle push, hoping to mitigate the nation’s severe air pollution, reduce its reliance on oil imports, and foster a high-tech manufacturing sector that could put the rest of the world to shame. The result of these efforts? Hundreds of new EV companies, propped up by Chinese subsidies and investors, with no real future.

While it was known that most of these startups would never make it to the finish line, estimates of their survivability rate has grown increasingly bleak. For a time, it was assumed that most would die out — leaving anywhere between 5 and 10 percent to reach the assembly phase. However, NIO Capital’s Ian Zhu posited that the number was likely closer to 1 percent last August.

China is now pulling back its support, with many believing the industrial bubble is about to pop. And they have the math to back it up.  (Read More…)

By on November 4, 2018

ff91

Faraday Future’s path to glory has been complicated to say the least. A series of ludicrously ambitious moves have been plighted with failure, followed by renewed hopes that were ultimately dashed. Incredibly, the aspiring automaker still exists and intends to begin production of its first electric vehicle once its money troubles are over.

Unfortunately, the company is currently engaged in a bitter legal battle with its biggest investor, China’s Evergrande Group, after a planned $2 billion investment went south. The reasons as to why are as foggy as the memory of a heavy drinker but Faraday wanted to trudge onward anyway. Initially, that seemed impossible — especially considering Evergrande held the ability to block any additional investments into the company. However, an interim ruling by a Hong Kong arbitration court has granted Faraday relief to seek financing without approval.  (Read More…)

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