Biden Could Delay EV Switch As Auto Industry Pressure Mounts
Good morning! It’s Monday, February 19, 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.
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1st Gear: Biden Braced For Battery Backtrack
After states such as California and New York announced legislation that would cut the sale of new gas-powered cars, it felt like the entirety of the U.S. would follow. In fact, we got as close as new legislation from the Biden administration that would dramatically reduce the number of new gas-powered cars that could be sold in America by 2030. But now, it sounds like those measures may be about to get dramatically diluted.
According to a new report from the New York Times, the Biden administration is considering amending its emissions regulations, which would currently require 67 percent of new cars and light-duty trucks sold in America to be all-electric by 2032. As the Times explains:
That remains the goal. But as they finalize the regulations, administration officials are tweaking the plan to slow the pace at which auto manufacturers would need to comply, so that electric vehicle sales would increase more gradually through 2030 but then would have to sharply rise.
The change in pacing is in response to automakers who say that more time is needed to build a national network of charging stations and to bring down the cost of electric vehicles, and to labor unions that want more time to try to unionize new electric car plants that are opening around the country, particularly in the South.
The possible softening of legislation comes as Biden faces increasing pressure from auto unions and car makers across the U.S., who have increasingly warned that a quick switch to EVs could cost jobs.
There’s also the issue that the current uptick in EV sales hasn’t been quite what many expected. In fact, automakers like Ford have now cut production of some all-electric models and others are turning their attention to hybrid cars.
2nd Gear: Even China’s EV Sales Are Slowing
If waning support for EVs in the U.S. wasn’t bad enough, it looks like enthusiasm for electric cars could also be dipping in the world’s largest car market: China. After years of booming growth for EVs across China, a new report from the Wall Street Journal suggests that the sector may be on the brink of a slowdown.
According to the report, reduced subsidies for EVs in China as well as a drop in spending across the country means that growth in electric car sales has started to slow across China. As the WSJ reports:
The slowdown has fueled a fierce price war in China embroiling dozens of EV startups and foreign players such as Tesla. Many Chinese EV makers burned through cash to chase a share of the growing market. Many are yet to turn a profit despite rising sales, leaving some at risk of going bust or needing injections of capital.
Slower growth also leaves an industry geared up to make millions more cars than it can sell domestically in the next few years. China’s government has acknowledged overcapacity and underused factories, and is pushing automakers to expand overseas. Analysts say that trend could lead to oversupply at home and abroad.
This push to expand overseas has seen companies such as BYD investigate the possibility of new plants in Mexico and other Chinese automakers have ramped up their attention on markets such as Europe. In fact, the commerce ministry in China is now actively encouraging automakers based in the country to expand their global reach, which is only bolstering the country’s position as the world’s largest automotive exporter.
3rd Gear: UAW Sets Strike Deadline For Kentucky
You might have thought the United Auto Workers union got all its striking out its system when the union walked out at plants operated by Ford, Stellantis and General Motors last year, but you’d be wrong. Now, the UAW is threatening further industrial action at Ford’s Kentucky Truck Plant.
According to a report from the Detroit Free Press, the union is calling for health and safety improvements at the Louisville facility, and says its workers could walk out as soon as next week if demands aren’t met. The Free Press reports:
“After Ford Motor Company has failed to reach a local agreement with UAW Local 862 at Kentucky Truck Plant more than five months past the contract deadline, UAW vice president Chuck Browning has requested authorization from UAW President (Shawn) Fain to set a strike deadline at Kentucky Truck Plant for 12:01 a.m., Friday, February 23rd,” the news release said. “The core issues in Kentucky Truck Plant’s local negotiations are health and safety in the plant, including minimum in-plant nurse staffing levels and ergonomic issues, as well as Ford’s continued attempts to erode the skilled trades at Kentucky Truck Plant.”
Last Week, the union gave Ford a deadline of February 23rd, giving the automaker a week to come back to the table to negotiate its demands. If workers walk out, the industrial action would affect the Louisville truck plant, which is where Ford assembles its Super Duty truck models.
4th Gear: Fisker Warned It Could Be Dropped From NYSE
It’s been a rough week for Fisker, after the build quality of its Ocean SUV was called into question and the NHTSA opened an investigation into “unintended vehicle movement.” Now, the automaker is facing financial concerns as the New York Stock Exchange issued a non-compliance notice for Fisker.
According to a report from Automotive News, Fisker was issued the non-compliance notice after its shares ended below $1 on average per unit for more than 30 consecutive days. Now, the company risks being delisted from the NYSE unless it can get its shares back in compliance with trading rules. As Automotive News reports:
Failure to comply with the NYSE’s rules can lead to a delisting and companies typically use reverse stock splits to regain compliance with the minimum price requirement.
Fisker, which makes the Ocean electric crossover, said the notice would not lead to an immediate delisting from the stock exchange, adding it has six months to regain compliance.
Fisker, which currently markets the Ocean SUV in regions such as the U.S. and Europe, first launched on the New York Stock Exchange back in October 2020. When it first listed, shares were priced from $10.66 by the end of its first day of trading.
However, shares in Fisker are currently valued at $0.73 at the time of writing and have been trading below $1 since the start of 2024.
