Good morning! It’s Monday, October 14, 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: Tesla Shares And Elon Musk’s Wealth Plummet
Tesla should be riding high right now, the electric car maker just unveiled the autonomous car that it has been promising for years, reinvented the bus and pledged to bring humanoid robots to market for the low, low price of $30,000. It isn’t, however, and has instead seen its share price plummet and the enormous wealth of its CEO drop by an eye-watering $15 billion.
Tesla revealed the Cybercab and Robovan concepts last week, with big boss Elon Musk saying that the Cybercab could go on sale before 2027 for around $30,000. All that wasn’t enough to keep Tesla shareholders happy, however, with many wishing Musk had shared more concrete details about what it would take to build the cars, when they could launch and how Tesla will make its self-driving car tech actually work.
As such, stock in the electric car maker began falling quickly after the event. In pre-trading on Friday, analysts said Tesla stock was down five percent and by the end of the day it had dropped nine percent, reports Business Insider. This sharp drop in Tesla’s share price did nothing for Musk’s net worth:
Musk’s net worth — which is partly tied up in Tesla, as he holds about 13% of the company’s stock — goes up and down along with the company’s value. And on Friday, Tesla’s stock sank more than 9% from $238.77 to $217.80 per share.
According to the Bloomberg Billionaires Index, updated after the close of trading in New York, Musk’s net worth fell by $15 billion. With a total net worth of $240 billion, Musk remains the richest man on earth.
Forbes reported in July that Musk faced a similar financial hit after the “We, Robot” event was delayed from its original August date, and Tesla stock tumbled about 7%. The company’s stock value had continued its downward trend through early August then rebounded in September — bringing Musk’s net worth to more than that of McDonald’s and Pepsi. However, Tesla shares had not yet returned to the year-to-date high they’d hit in July before the stock slumped again this week.
Tesla’s share price now sits at around $217 per share, compared with the $240 that it was valued at before Musk began unveiling his autonomous creations. Despite the sharp drop in Tesla’s valuation, Musk remains the richest person in the world right now. At the time of writing, his fortune is estimated at more than $245 billion, reports Forbes.
Now, hope of Tesla’s share price rising will rest with the creations Musk unveiled and how quickly he can bring them to market. The Tesla CEO has a history of over-promising and under-delivering when it comes to new products, so the real test of his management will come if the automaker can really bring a self-driving car to market by 2027, but we won’t hold our breath for that one.
2nd Gear: Boeing Cuts 17,000 Jobs As Strikes Hit
Boeing has had a pretty awful year so far. The company had a raft of high-profile mechanical failures with its aircraft, was the subject of a federal probe that uncovered all kinds of shortcuts being taken and has seen plane deliveries almost grind to a halt. Now, the American aerospace giant is in the midst of an enormous strike among its workers.
More than 30,000 Boeing workers walked off the job on September 13, bringing production at some Boeing facilities to a grinding halt. Now, the American company is moving to slash jobs, will delay new products and has reported a multi-billion-dollar loss as the strike hits, reports Reuters:
CEO Kelly Ortberg said in a message to employees that the significant downsizing is necessary “to align with our financial reality” after an ongoing strike by 33,000 U.S. West Coast workers halted production of its 737 MAX, 767 and 777 jets.
“We reset our workforce levels to align with our financial reality and to a more focused set of priorities. Over the coming months, we are planning to reduce the size of our total workforce by roughly 10%. These reductions will include executives, managers and employees,” Ortberg’s message said.
The job cut will impact 17,000 workers at Boeing plants around the world and is one of the first major changes that CEO Kelly Ortberg has carried out since stepping into the role back in August. As well as the job cuts, Boeing has also announced that next-generation aircraft the 777X jet has been delayed by a year.
Job cuts and delays are part of wider problems at the troubled plane maker, which is expected to report losses of $5 billion in the third quarter of 2024, adds Reuters. The company said it expects revenue for the period to hit $17.8 billion, equating to a loss per share of $9.97.
3rd Gear: Polestar Thinks Dealer Sales Can Save Falling Deliveries
Boeing isn’t the only company having a tough time of things right now, with Swedish EV maker Polestar also struggling in recent months. Following the departure of CEO Thomas Ingenlath earlier this year, the automaker has now revealed that sales fell 15 percent in the third quarter of 2024.
Thankfully, the EV maker has a clever plan up its sleeve to try and turn things around: it’s going to start selling cars in dealerships, reports Bloomberg. The automaker historically has only sold cars via its online retail platform, with a limited number of showrooms around the world offering customers a chance to see its cars in person before heading online to order:
Until recently, although customers could kick the tires and go for test drives at the Swedish manufacturer’s showrooms, they’ve had to turn to the company’s website to buy the cars.
CEO Michael Lohscheller said he’s launched a review of operations and strategy under which Polestar is going “from showing to actively selling cars,” according to a statement Friday.
His comments came as Polestar reported a 15% drop in third-quarter deliveries, to 11,900, joining a range of European manufacturers to report big sales declines in the latest period.
The company said it expects revenue for this year to be similar to 2023. It reaffirmed a goal of achieving break-even cash flow by the end of next year but with lower volumes than it was previously targeting.
The drop in sales for the Swedish automaker has been attributed to delays in the rollout of new models, with the Polestar 3 SUV being pushed back and the Polestar 4 yet to hit owners’ driveways here in the U.S.
As a result of the worrying drop in deliveries and revenue for the automaker, shares in Polestar were reportedly down by as much as 12.5 percent, having already dropped in value by more than a third so far this year.
4th Gear: Fisker Agrees To Bankruptcy Deal
Closing out our roundup of bad news for struggling companies is Fisker, which has finally agreed to a bankruptcy plan months after going out of business. The failed EV maker reportedly reached the deal after agreeing tech support terms over the sale of its remaining stock of Ocean electric SUVs, reports Automotive News.
EV maker Fisker was granted approval for its bankruptcy liquidation plan on Friday after last-minute alterations were made in order to try and preserve the sale of 3,000 Ocean SUVs worth around $46 million, reports Automotive News. The deal was nearly derailed after American Lease, which will purchase the remaining stock, realized in needed intellectual property from Fisker in order to maintain and keep the Oceans up and running:
Fisker ultimately chose to liquidate its operations in bankruptcy, selling off its remaining vehicle fleet to buyer American Lease and transferring its intellectual property to creditors.
The vehicle fleet sale hit a last-minute snag this week, after American Lease realized that Fisker would not be able to transfer essential data and support services to new servers operated by the buyer.
Without the data transfer, the vehicle fleet would be cut off from essential services such as updating vehicle software, reviewing diagnostic data, and allowing drivers to remotely access their vehicles.
American Lease resolved the dispute by agreeing to pay an additional $2.5 million over five years for future tech support services. The deal also will benefit other Fisker Ocean owners, who had similarly expressed concern about what would happen to their vehicles after Fisker’s servers shut down, attorneys said in court on Friday.
The deal was approved by U.S. bankruptcy judge Thomas Horan following a court hearing in Wilmington, Delaware last week. The move paves the way for Fisker to begin repaying creditors with its remaining assets.
Fisker filed for bankruptcy in June, after failing to sell its cars around the world following negative reception from buyers and reviewers. The company attempted to reach a partnership with Nissan for production of its EVs, however a deal was never agreed and Fisker instead laud off staff and halted production.