EV Makers Hitting Empty

EV Makers Hitting Empty
A Faraday Future FF 91.

Los Angeles-based electric vehicle makers have been experiencing an extended patch of  troubles.

Gardena-based Faraday Future Intelligent Electric Inc., for example, narrowly averted being evicted from its headquarters this month. 

Canoo Inc., located in Torrance, is struggling financially and its management has doubts about its ability to stay in business. 

And for Manhattan Beach-based Fisker Inc., bankruptcy is a possibility as the company deals with anemic sales of its Ocean sport utility vehicle.

Yet, John Boesel, chief executive of Calstart, a Pasadena nonprofit organization dedicated to developing clean, efficient products within the transportation sector, said that all three of those companies have good products. 

“The challenge will be can they get the capital they need to support their development,” Boesel said. 

John Boesel, chief executive of Calstart.

In addition to the Fisker Ocean, Faraday has the FF 91, while Canoo is making four variants of its lifestyle vehicle – or LV – two versions of its lifestyle delivery vehicle, a pickup truck and a multi-purpose delivery vehicle. All are available to pre-order from Canoo with $100 down. 

While there has been a slowdown nationally in the sales of electric vehicles, California seems to be bucking that trend, Boesel said.

According to the California New Car Dealers Association economic impact report for last year, new car dealers in the state sold 380,891 electric vehicles, which represents 21.4% of the total light-duty vehicles sold in the state.

That figure is an increase from the 285,199 electric vehicles sold in 2022.

“The EV market share in California is three times higher than the EV market share in the rest of the United States,” the dealer association reported.

Dealers also, according to the report, anticipated spending an average of $295,000 each on electric vehicle charging infrastructure last year and this year to help meet the needs of the state’s electric vehicle consumer demand.

Reliable and widespread charging facilities are a concern for those who are thinking of buying an electric car, Boesel said. 

“A concern is, do we have enough charging available for all the cars, and can we make sure that people who live in multifamily buildings can charge an electric vehicle,” he added.

Those are two of the challenges facing the EV industry in the state. Helping utilities accelerate their ability to bring power to depots and truck stops is another one, he said.

“I think the state is doing more to get more infrastructure out there and to address the charging concern,” Boesel continued.

There is also an increasing number of carmakers adopting the connectors that Tesla uses so as to hook up to that company’s charging network, he added.

“Tesla is now working with them to expand the network and open it up to non-Tesla drivers,” he said. “When that happens the market will start growing again.”

Business sustainabilitydoubts at Canoo

Canoo, a Torrance-based electric vehicle maker, reported concerns about its future this month. 

In its annual report filed with the SEC on April 1, it said that the company’s management had doubts that it would be able to stay in business. 

“If we are unable to obtain sufficient additional funding or do not have access to additional capital, we will be unable to execute our business plans and could be required to terminate or significantly curtail our operations,” the company said in the filing.

Canoo last year reported revenue of $886,000 and a net loss of $302 million. 

The company believes that it will continue to have net losses each quarter, at least until it significantly advances operations and produces and delivers its vehicles on a large scale, it said in the filing. The company did not return a request for comment.

“Even if we are able to successfully develop our EVs and attract customers for our vehicle and product offerings, there can be no assurance that we will be financially successful,” it added. “Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of our EVs, which may not occur.”

Trouble at Fisker

Things are no better at Fisker.

The Manhattan Beach-based company said in a recent SEC filing that it was evaluating alternatives for its financial well-being, including in- or out-of- court restructurings, capital markets transactions, the potential issuance of equity securities, the potential sale of assets and businesses and/or other strategic transactions.

“There can be no assurance that any of these alternatives will be available on acceptable terms, or at all, in the current market environment or in the foreseeable future,” Fisker said in the April 4 filing.

In a March 15 SEC filing, the company said that it had concerns about being able to remain in business. The company did not return a request for comment for this article.

On March 18, Fisker said in a release that it was stopping production of its Ocean all-electric SUV for six weeks at its contract manufacturer in Austria.

“Moreover, we may not be able to satisfy our debt-service obligations and could need to seek protection under applicable bankruptcy laws,” it continued in the SEC filing. “There can be no assurance that we will be able to raise the capital we need to continue our operations.”

Fisker said in its March 18 release that it had raised $150 million from an existing investor. 

The financing is being provided by the holder of the company’s 2025-dated convertible notes and will be organized in four tranches, or classes, of the securities.

A Fisker Ocean model.

The company also had its stock delisted in late March from the New York Stock Exchange; it now trades on the over-the-counter market.

More than enough troubles

Faraday Future, the Gardena-based EV maker, has been struggling too. 

The company reported having just $8.6 million in cash as of the end of the third quarter in September of last year. That amount is the most recent given by Faraday: it is late in reporting its fourth-quarter and full-year financials. 

“The reason for the delay primarily relates to staffing-related challenges in the company’s accounting group and deferred payments to third-party audit consultants who have been assisting,” according to an April 2 filing by Faraday with the Securities and Exchange Commission 

The company expects to file the annual report before the end of the month, it said in the filing.

According to a story at startup and technology news website TechCrunch, Faraday has avoided getting evicted from its Gardena headquarters, at least for the time being. 

The troubled EV startup reached an agreement on April 2 with its landlord, Rexford Industrial, to stay in the building as long as it met a few conditions, TechCrunch reported. 

Canoo Inc. now counts the U.S. Postal Service as a customer.

If the startup violates any of the terms, including paying more than $300,000 toward what it owes in rent, Rexford has the right to trigger a 48-hour demand for payment and can evict Faraday if it doesn’t pay up. If Faraday makes its payments, it can stay in the building until September 2025, when the lease expires, the tech news website story said. 

On April 9, TechCrunch reported on two lawsuits filed this month in Los Angeles Superior Court against Faraday by former employees alleging that the troubled EV company has been lying about some of the sales it has announced to date. 

Faraday did not return a request for comment.

Faraday Future has since said it has delivered 10 vehicles in all of last year.

Some EV makers are in better shape

But to Boesel, of Calstart, there are some winners in the electric vehicle manufacturing space in Southern California.

Giving strength to the Los Angeles County EV market is Xos Inc., a manufacturer of electric trucks based in Atwater Village, and BYD North America LLC in Pasadena, Boesel said. BYD makes electric buses and trucks at its factory in Lancaster, while Xos makes its trucks in Tennessee.

“I think we are going to see both of those grow as they expand to meet the market need,” Boesel said. 

Overall, he said, California is leading the zero-emission revolution and it is important that it stay on track and hit its targets.

“We are setting an example for the nation that is important for future generations, and I think California’s economy will really benefit from a strong zero emission vehicle industry,” he added.

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