Harley Davidson has sold off its electric bike brand LiveWire in the latest Special Purpose Acquisition Company merger to hit the EV space, a new study finds carmakers are just as bad for the environment as oil giants, and Bring a Trailer hits $1 billion in sales. All this and more in The Morning Shift for September 28th 2022.
1st Gear: LiveWire is Latest EV Maker to go Public via SPAC Merger
If there’s one important buzzword in the EV space, it’s not battery or charger or motor, it’s SPAC. The Special Purpose Acquisition Company (SPAC) has come for the likes of Polestar, Lucid, and Electric Last Mile Solutions, among others. It’s a way for startups such as these to launch on the stock market and raise the capital they need to invest in R&D, infrastructure and marketing, without doing the whole IPO thing. But it doesn’t always go off without a hitch.
Now, historic bike maker Harley Davidson has turned to a SPAC merger to float its LiveWire electric bike brand on the stock market. Reuters reports that shares of LiveWire Group Inc were up 1.5% in their U.S. market debut, following the company’s $1.77 billion merger with AEA-Bridges Impact Corp. According to Reuters:
Harley-Davidson Inc on Tuesday spun off its electric motorcycle division, LiveWire, in a SPAC deal creating the first publicly traded electric motorcycle company in the United States.
New shares of LiveWire Group Inc, Harley-Davidson’s former electric motorcycle subsidiary, were up 1.5% in their U.S. market debut on Tuesday following the unit’s $1.77 billion merger with a blank-check firm. Last year, the EV unit agreed to merge with special purpose acquisition company AEA-Bridges Impact Corp.
Shareholders for AEA-Bridges approved the merger last week, even as investors are growing more cautious about blank-check companies with a record number of SPACs liquidating in 2022 amid surging interest rates and market volatility. The acquisition was originally expected to close in the first half of the year.
Despite the sale of shares in LiveWire, Harley Davidson will remain the majority shareholder of the EV maker. According to Reuters, Harley will retain a 74 percent stake in the company, which currently markets two electric motorbikes that start at $16,999.
2nd Gear: Carmakers are Just as Bad as Gas Companies
Carmakers like to tell us all that they’re cleaning up their act and that the never-ending pivot to EVs could be the best way to avert the climate crisis. And because of talk like this, savvy investors think that backing car companies might be a better move than backing oil firms.
But, a new report from Reuters found that investing in car makers can be just as bad for the environment as backing big oil. The outlet cites a study carried out by environmental NGO Transport & Environment, which investigated the lifetime emissions from an investment in automakers or oil companies. According to Reuters:
A million euros invested in oil giants Shell, BP and Exxon Mobil finances around 5,000 tonnes of carbon dioxide, while the same amount finances on average 4,500 tonnes in the car sector, the NGO’s calculations based on 2020 data showed.
Researchers used data provided by the world’s nine largest car companies on the average tonnes of carbon emitted from their vehicles through their lifetimes, and the size and makeup of their fleets, compared to their market capitalization.
Obviously, since 2020 a lot of car makers have begun electrifying their fleets and offering more hybrid and electric cars, which would all have lower carbon emissions than their gas-powered counterparts.
But, reports like this show that the industry still has a long way to go if it really does want to mitigate greenhouse gas emissions around the world.
3rd Gear: Russia Doesn’t Need Western Jets Anymore
Following Russia’s invasion of Ukraine in March, western companies were quick to cut ties with the country. Automakers announced plans to stop selling their wares and some began closing down their operations across Russia. At the same time, aerospace giants including Airbus and Boeing made steps to sever ties with the country.
In the weeks that followed, reports emerged that airlines in Russia were beginning to strip down planes for spare parts as they could no longer buy replacements direct from Boeing and Airbus. And now, Russian engineering firm Rostec says the country no longer needs such companies to keep its fleets flying.
Reuters reports that Rostec is hoping to soon drop foreign aircraft from Russian fleets, will seek to cancel all orders for Boeing and Airbus planes that would have been bound for Russia, and will begin using Russian-made engines and spare parts to keep planes in the air.
But, experts interviewed by Reuters suggest this could be a bigger challenge for Rostec than it sounds. According to Reuters:
When it comes to modern jets, Russia’s only civilian planemaker, Rostec’s United Aircraft Corporation, is limited by a lack of models, manufacturing capacity and foreign components.
Half of components and technologies used in the Russian aircraft industry in 2021 originated from foreign countries, according to a document titled: “On the Strategic Directions of Activity in the New Conditions for the Period up to 2030" prepared by the government and seen by Reuters.
4th Gear: Ford Invests $700 Million in Kentucky Plant
Yesterday, Ford announced the details of its next-generation Super Duty truck for tough drivers who need a tough truck for all their tough work. As it looks to ramp up production of the bigger, badder pickup truck, the blue oval has announced that it’ll invest $700 million in its Kentucky plant.
According to Reuters, the boost to Ford’s operation in the Bluegrass State will see the company invest $700 million and add 500 jobs to support production of its new 2023 model year F-Series Super Duty truck. The firm’s backing in the state is just its latest round of funding to support its plant in Kentucky. Reuters reports:
The No. 2 U.S. automaker and its South Korean battery partner SK Innovation said in September 2021 they would invest $11.4 billion to build an electric F-150 assembly plant and three battery plants in the United States. The companies said they would invest $5.8 billion in Kentucky, and $5.6 billion in Tennessee. The Kentucky JV will create about 5,000 jobs.
The Kentucky Economic Development Finance Authority on Tuesday approved a supplemental project to an existing agreement with Ford that can provide up to $430 million in cumulative tax incentives based on the company’s total cumulative investment of $3.65 billion with an annual job target requirement of up to 12,500 over the term of the agreement.
When they go on sale, new Super Duty trucks built in Kentucky will pack in a new 6.8-liter gasoline V8, an upgraded Power Stroke diesel, and heaps of new technology.
5th Gear: Bring a Billion Dollars Worth of Trailers
We’re always bemoaning the unbelievable rise in prices of used classic cars. But one person who’ll have no qualms with the booming industry is Bring a Trailer founder Randy Nonnenberg, whose firm just passed a billion dollars in sales for the year so far.
According to Bloomberg, the online auctioneer surpassed $1 billion in sales for 2022 on September 22nd, with more than three months left to run this year. That milestone far surpasses last year’s total sales at the website, which reached $829 million 2021. Bloomberg reports:
Factors seen and unseen have sped the growth, says Randy Nonnenberg, who co-founded the San Francisco-based online auction platform in 2007.
“We were the first marketplace to make all our results permanent and transparent on the website, and that has fostered trust that most other venues don’t have. [Users] see that deep archive of results, and it helps make us their preferred market,” he says.
The site’s impressive sales far outpace its closest rivals in the space. According to Bloomberg, Mecum Auctions reported sales of $578 million in 2021, while auctioneer RM Sotheby’s managed $407 million last year.
Reverse: Shipping Forecast
Neutral: Won’t You Be My Livewire?
For no reason at all, I’ve now got this song stuck in my head. It’s nice, give it a listen the next time you’re stuck in a traffic jam.