Electric Last Mile, An EV Startup, Will Liquidate
Photo: Electric Last Mile
Troubled electric van maker Electric Last Mile (ELM) announced plans to liquidate, trucker strikes in Korea are hitting the automotive industry and Jeep says it’s ready to electrify Europe. All that and more in The Morning Shift for June 13, 2022.
1st Gear: ELM Runs its Last Mile
Launching a new company to make electric vehicles is hard. We’ve had enough firms come and go over the years to know this. And now, there looks to be a new casualty in the electric arms race as truck maker Electric Last Mile has announced plans to liquidate, according to Bloomberg.
ELM planned to import electric Wuling EV50 vans from China and assemble them in Michigan with some fancy new badges stuck on. The firm went public in June 2021 following a SPAC merger that saw it raise $379 million. But that hasn’t provided sufficient capital to keep the company afloat, and in May it warned that it would run out of cash very soon.
According to Bloomberg:
“The Troy, Michigan-based company said in a statement late Sunday that its board and interim CEO, Shauna McIntyre, decided to liquidate after a review of Electric Last Mile’s products and plans turned up no better option for stockholders, creditors and other interested parties.
“The filing will make Electric Last Mile the first of the EV startups that merged with special purpose acquisition companies to go out of business amid the recent market slump. On May 27, the company had warned it might run out of cash this month. Its shares have fallen 93% this year, closing last week at 51 cents.”
In a statement on the company’s website, interim CEO Shauna McIntyre said she was “very disappointed” by the outcome, but said that it was as a result of “too many obstacles” for the company to overcome in a “short amount of time.”
2nd Gear: Trucker Strikes Hit Korea’s Auto Industry
Truckers in South Korea are on strike as rising fuel costs and other fees are threatening their livelihoods. Drivers began blocking ports and industrial hubs this weekend, and have threatened to block coal plants across the country. Striking workers are calling for minimum pay guarantees as rising costs cut further into their wages.
Truckers have blocked ports and cargo terminals in South Korea, including those supplying auto makers and electronics firms with components such as semiconductors and batteries. This is further pushing industries that are still recovering from the Covid-19 pandemic and other supply chain issues across the sector.
As a result of the ongoing strike, Reuters reports that South Korean industries including the automotive sector, as well as steel, petrochemical and cement, face losses worth up to $1.24 billion (1.6 trillion won). The industry ministry in South Korea said in a statement that “the estimated 1.6 trillion won was based on losses in production, shipment and exports.”
Despite these pressures facing the sector, Korean automaker Hyundai this week announced it was adding weekend production shifts to try and keep up with demand for its vehicles.
3rd Gear: Two Million Vehicles Lost to Chip Shortage
A shortage of semiconductors around the world has hit production of almost everything. From phones to smart fridges, the scarcity of these vital components is beginning to take its toll. And while some automakers are finding a way around the shortage by cutting certain features from new cars, there’s no denying the reduced output from car makers as a result of dwindling supply.
Now, Automotive News projects that as many as 2 million vehicles have been lost due to the semiconductor shortage, this includes vehicles canceled from automaker production schedules in factories around the world. Per Automotive News:
“The number of vehicles canceled from automaker production schedules worldwide due to the microchip shortage has surged past 2 million, according to the latest estimate by AutoForecast Solutions. Despite hopeful predictions around the industry, automakers continue prioritizing their available chips for high-end, high-margin models instead of entry-level vehicles.
“About 234,200 vehicles were added to AFS’ year-to-date tally last week, bringing the total to 2.23 million units lost due to the microchip crisis.”
According to the report, the majority of vehicles canceled were at production facilities in Europe and the U.S., accounting for 794,100 and 780,800 cancellations respectively. By the end of 2022, AutoForecast Solutions predicts that as many as 3,040,861 vehicles will be canned from production due to the shortage of semiconductors.
4th Gear: Jeep Ready to Help Electrify Europe
Jeep, the maker of big, heavy off-roaders and SUVs claims that it is ready to electrify its lineup in Europe, but warned that the process could take a little longer here in the U.S.
The firm has dipped its toe into the world of electrification with its Wrangler 4XE and the recently launched Grand Cherokee 4XE, both of with are plug-in hybrids that can manage about 20 miles on battery power alone. But now, the firm has much loftier aims for its electric future. Automotive News reports:
“Its eyes are set on delivering purely electric jaunts along the 22-mile Rubicon Trail without using an ounce of gasoline while still having considerable range left at the end of the journey.
‘“Our perspective is you’re going to be able to do the Rubicon Trail and have another 100 miles at the end of the Rubicon to go to a charging station,’ said Jeep CEO Christian Meunier. ‘That’s what we need to be able to do, and I think we can do it with a BEV’.”
As it chases this all-electric future, Jeep says it will stop selling internal combustion vehicles in most major European markets at the end of the year, instead offering hybrid options only. This will be part of parent company Stellantis’ plans to offer only battery-powered vehicles in Europe by 2030.
But uptake of battery-powered cars in America could be slower for the firm. Here in the Land of the Free, Stellantis wants just half of its sales to be EVs by 2030 and new electric cars from Jeep due next year could help support this ambition.
5th Gear: The AMG 1 was Almost Canned
Remember the AMG 1? The incredible new hypercar from Mercedes-Benz that packs in a Formula 1-derived power unit, active aero and more race car tech than you can shake a stick at. Well, it was almost canceled midway through its development.
The car was first announced in 2016 and has had its fair share of development issues along the way. But, a new report from Bloomberg warns that Mercedes-Benz almost canned the car while it was still under development.
In a conversation with Bloomberg, Jochen Hermann, who led the AMG 1 development team said that “two or three times” the firm considered canning the project to “give people the money back or make a race car or whatever.”
Thankfully, the team didn’t can the car and it has now made it into production. Except, none of those made will make it over to the U.S.
It’s a fascinating interview that touches on some of the technical challenges the team faced, including meeting strict EU emissions rules and the software challenges that came with building such an advanced car. Go read it!
Reverse: A Long Way From Home
Neutral: Did you Have a Nice Weekend?
I went to see the new Jurassic World so that you don’t have to. Please don’t, it’s a waste of your time.
