Good morning! It’s Tuesday, March 5, 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: German Tesla Gigafactroy Halts Production After Nearby Fire
Tesla’s German Gigafactory near Berlin was forced to halt production and was left without power after a suspected arson attack that set an electricity pylon on fire in the early morning hours of March 5. A far-left militant group called the “Volcano Group” has claimed responsibility for the fire. From Reuters:
“We sabotaged Tesla,” read the letter, posted on website kontrapolis.info, describing the attack as a gift marking March 8 – International Women’s Day. “Tesla consumes earth, resources, people, workers and in return spits out 6,000 SUVs, killer cars and monster trucks each week.”
Police said they were aware of the letter, which was signed “Agua De Pau”, the name of a volcanic mountain in the Azores, and said they were checking its authenticity.
The fire didn’t spread to the actual Tesla site, and it was extinguished by firefighters soon after it started. A spokesperson for Tesla confirmed that production was halted and the site was evacuated.
Tesla CEO Elon Musk and other officials were, as you may have guessed, not a fan of what happened and who has claimed responsibility. From Reuters:
“These are either the dumbest eco-terrorists on Earth or they’re puppets of those who don’t have good environmental goals,” Musk said on X.
“Stopping production of electric vehicles, rather than fossil fuel vehicles, ist extrem dumm,” he said, using the German for “extremely dumb”.
[…]
“If the initial findings are confirmed, this will be a perfidious attack on our electricity infrastructure,” said local Brandenburg state Interior Minister Michael Stuebgen.
“That will have consequences. Here, thousands of people were cut off from basic services and put in danger,” he said, adding that the state would react with the “utmost severity”. He cautioned however against jumping to conclusions about possible perpetrators.
Workers for energy company E.ON are currently repairing the damage to the high-voltage pylon which knocked out power to the area. At this point, electricity has been restored to surrounding communities, other than a large industrial site and logistics center.
2nd Gear: Lawsuits Say Porsche EV Battery Caused Ship Fire
Volkswagen is facing a pair of lawsuits in Germany because of claims a Porsche EV battery caused the 2022 fire onboard the Felicity Ace that eventually caused the massive cargo ship to sink with thousands of cars on board. From Bloomberg:
One of the suits was filed in a court in Stuttgart where VW’s Porsche unit is based. The case was brought by half a dozen plaintiffs, including Mitsui OSK Lines Ltd., the ship’s operator, and Allianz SE, one of the insurers of the vessel, according to a spokesman for the tribunal.
The case was filed a year ago but was recently paused because of mediation talks planned for a second lawsuit over the ship’s that’s currently before a court in Braunschweig. Both cases will resume if no settlement can be reached. A Braunschweig judge plans to hold the talks later this month, according to a tribunal spokesman.
Here’s a little refresher on the events surrounding the very much doomed Felicity Ace:
The Panama-flagged Felicity Ace caught fire near the Azores archipelago in the Atlantic Ocean two years ago and was left adrift after the crew was rescued. An internal email from VW’s U.S. operations at the time revealed there were 3,965 vehicles aboard the ship. The cargo ship’s loss could have cost the automaker at least $155 million, according to a risk-modeling company’s estimate.
The plaintiffs claim that the fire originated from the lithium-ion battery of a Porsche model and allege VW failed to inform them of the danger and necessary precautions needed to transport such vehicles, according to the Stuttgart court. Although the case was filed a year ago, the judges haven’t yet looked into the merits of the suit as the parties have been quarreling about the amount of collateral that must be posted before it can proceed.
I just hope the creatures at the bottom of the sea are enjoying their luxury cars. Being a bottom-dwelling fish is hard, and they deserve this win.
3rd Gear: JetBlue, Spirit Give Up On Merger
JetBlue Airways and Spirit Airlines are doing the brave thing and calling it quits on their attempted merger agreement. The move comes just a few weeks after a judge ruled that the $3.8 billion deal would hurt competition and harm cost-conscious travelers. From the Wall Street Journal:
Joanna Geraghty, JetBlue’s chief executive, told employees Monday in a memo that acquiring Spirit had been a “bold and courageous plan” but “with the ruling from the federal court and the Justice Department’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low.”
Spirit Chief Executive Ted Christie said that the airlines concluded that regulatory obstacles would likely be insurmountable.
JetBlue has agreed to pay Spirit $69 million (nice) in cash for this whole situation. I wonder if the airline can send some my way.
Here’s more info on this merger-than-never-was saga, from CNBC:
A federal judge in January sided with the Justice Department and blocked JetBlue’s attempted takeover of budget carrier Spirit. In his ruling, Judge William Young said JetBlue’s takeover of Spirit would “harm cost-conscious travelers who rely on Spirit’s low fares.” The airlines had argued that they needed to combine to better compete with the larger airlines that control most of the U.S. market.
JetBlue and Spirit had appealed the judge’s decision, but JetBlue noted the appeal was required under the terms of the merger agreement. Analysts had expected little chance of a successful appeal.
The Justice Department cheered the news on Monday, a year after it filed its suit to block the deal. “Today’s decision by JetBlue is yet another victory for the Justice Department’s work on behalf of American consumers,” Attorney General Merrick Garland said in a statement.
[…]
Almost two years ago, JetBlue swooped in with an unsolicited bid for Spirit Airlines, which had weeks earlier struck a merger agreement with fellow budget airline Frontier. JetBlue ultimately won Spirit shareholder approval to take over the discount carrier.
RIP to the JetBlue-Spirit mega airline. We hardly knew ye.
4th Gear: Tesla’s Chinese Shipments Hit Rough Patch
Tesla shipments from its Shanghai factory slid to their lowest point in more than a year. Renewed price competition and a Lunar New Year holiday sales lul are being blamed for the shift. From Bloomberg:
The US automaker shipped 60,365 vehicles from its China factory in February, according to preliminary data released Monday by China’s Passenger Car Association, the lowest since December 2022 and down almost 16% month-on-month. Year-on-year, it was a wider 19% decrease.
Auto sales in China are generally slower over the Lunar New Year period, when millions of people across the country take time off work and travel home to visit family and friends.
And as is the case in many places around the world, growth in China’s EV market is slowing. Shipments of new-energy vehicles to dealers are projected to increase 25% to 11 million units this year, the PCA has said. While still expanding, that’s a slowdown from 36% in 2023 and 96% in 2022.
Sales of new-energy vehicles — which includes battery EVs and plug-in hybrids — fell 9% last month versus February 2023 to 450,000 units, according to the PCA’s latest estimates. Numerous price cuts by major manufacturers may have prompted consumers to hold back on purchases in the hope that prices drop further, the association said.
Tesla has been trying out a bunch of different incentives to get Chinese sales going again. Last week, the automaker said that customers placing orders for a rear-wheel drive Model 3 or Model Y that are in stock for delivery by the end of March can get an over-$1,000 insurance subsidy.