Karma Automotive has raised a $100 million lifeline from outside investors, as reported by Bloomberg, with the struggling electric vehicle maker’s fortunes likely buoyed by the current market optimism on other EV companies including Tesla. Karma is the reincarnated version of Fisker Automotive, which previously faced bankruptcy before being acquired by Wanxiang Group in 2014.
Karma Automotive has made more progress than Fisker ever did, including actually delivering around 500 of its inaugural Revero electric sport sedan in 2019. The company will be continuing to sell the Revero, which retails staring at around $140,000, and will also be looking to add a high horsepower GTE version, as well as a supercar for an even higher-tier customer.
The automaker also says that it’s in discussions with a partner for a commercial delivery truck, which it intends to develop in prototype form by year’s end. There are a number of different companies pursuing delivery vans for use by courier companies including UPS and FedEx, and the increase in e-commerce spending does present an opportunity for multiple players to succeed in this category, even as there is a rush on in terms of entrants.
Karma will also seek to leverage and extend the benefits of its fresh investment by shopping around its EV platform to other automakers and OEMs, the company says, and also will eventually expand beyond pure EVs to hybrid fuel vehicles. In short, it sounds like Karma is willing to try just about everything and anything to chart a path towards profitability, but time will tell if that’s intelligent opportunism, or scattershot desperation.
Electric vehicle startup Fisker Inc. said Wednesday it has raised $50 million, much needed capital that will go toward funding the next phase of engineering work on the company’s all-electric luxury SUV.
The startup is aiming to launch the Fisker Ocean SUV in 2022.
The Series C funding round was led by Moore Strategic Ventures LLC, the private investment vehicle of Louis M. Bacon, the billionaire hedge fund manager.
“Since we first showed the car at CES earlier this year, reaction from customers and investors has been extremely positive,” Fisker Inc. Chairman and CEO Henrik Fisker said in a statement. “We are radically challenging the conventional industry thinking around developing and selling cars and this capital will allow us to execute our planned timeline to start producing vehicles in 2022.”
The company is also beefing up its executive lineup to help push the project along. Fisker said it has hired Burkhard Huhnke as its CTO. Huhnke was the former vice president of e-mobility for Volkswagen America and vice president of automotive at chipmaker Synopses.
As CTO, Huhnke will spread his time between the company’s R&D work in Los Angeles and its new Fisker Innovation Lab in Silicon Valley.
Building a car company isn’t easy. Just ask Fisker. The well-known automotive designer, who was behind the Aston Martin V8 Vantage, Aston Martin DB9 and BMW Z8 among others, launched a startup called Fisker Automotive that aimed to produce a luxury plug-in hybrid electric vehicles. The flagship vehicle, the Fisker Karma, debuted at the 2008 North American International Auto Show, and first deliveries were in 2011. But the company ran into numerous challenges and production was suspended in November 2012 and ended in bankruptcy a year later.
China’s Wanxiang Group purchased what was left of Fisker in 2014 and launched a new company called Karma Automotive . On a side note: Karma, which has had its own financial struggles, also announced Wednesday it had raised $100 million.
This time around, Fisker is focused on an SUV. The Fisker Ocean, which was officially revealed in January at CES 2020, starts at $37,499 before applying any federal income tax credit or state incentives.
Lordstown Motors, the one-year-old Ohio electric automaker that revealed a pickup truck prototype in June, has reached a deal to merge with special-purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion.
The agreement marks the latest company — and electric automaker — to become a publicly traded company through a merger agreement with a SPAC, or blank-check company. Electric automakers Nikola Motor and Fisker Inc. have also become public companies through a SPAC over the past two months. Shift Technologies, an online used car marketplace and sensor company Velodyne Lidar, also went public via a SPAC, sidestepping the traditional IPO path.
In this latest SPAC, the combined company will remain on the Nasdaq under a new ticker symbol, RIDE. DiamondPeak Holdings Corp. was listed on the exchange under the ticker DPHC.
The company said it was able to raise $500 million in private investment in public equity, or PIPE, including a $75 million investment by General Motors. Other institutional investors that joined include Fidelity Management & Research Company, Wellington Management Company, Federated Hermes Kaufmann Small Cap Fund and funds and accounts managed by BlackRock.
The transaction is expected to close in the fourth quarter of 2020. The new combined company’s board will include Steve Burns, the founder and CEO of Lordstown, and David Hamamoto, chairman and CEO of DiamondPeak.
SPACs have been around for decades and have gone by different names, including “blind pools” and “clean shell companies” and “blank-check companies.” A SPAC is a corporation that has no defined business plan or purpose other than to raise money from public markets to acquire a private company. The SPAC has seen a resurgence in 2020, particularly in the second and now third quarters.
Lordstown has an interesting history for such a young company. Lordstown Motors is an offshoot of Burns’ other company, Workhorse Group, a battery-electric transportation technology company that is also a publicly traded company. Workhorse is a small company that was founded in 1998 and has struggled financially at various points. Its offshoot, Lordstown Motors, revealed a prototype of an electric pickup truck called Endurance that is aimed at contractors and other buyers in the commercial market.
The plan is to produce 20,000 of these electric commercial trucks annually, starting in the second half of 2021, at the former GM Assembly Plant in Lordstown, Ohio. Lordstown Motors acquired in November the 6.2 million-square-foot factory from GM.
The combined company plans to use about $675 million of gross proceeds from the SPAC transaction to fund production of the Endurance. Since the truck’s unveiling, the company has secured pre-orders valued at $1.4 billion (or about 27,000 total pre-orders), according to Burns.
The death of George Floyd and the recent Black Lives Matter protests have drawn widespread attention to the systemic racism within the United States. Millions of individuals across every state have come together to demand change.
Yet, whether companies believe they have a responsibility to respond to, resist and address this racism remains unclear. Do customers expect, or desire, a response? Do the companies’ own employees expect a response? Corporate America has the ability to use its influence for the change many of their employees are demanding; however, historically companies have been wary of inserting themselves into the middle of any conflict.
Now more than ever, it’s important for employers to align themselves with their employees’ expectations, though. Since March 2020 professionals working remotely increased from 30% to 80%, drastically accelerating an already rapidly growing trend. This remote nature has made it increasingly difficult to maintain a strong sense of “corporate community” and trust between leaders and employees.
At Fishbowl, we have been able to observe employees’ sentiments and expectations of their employers during this time.
Fishbowl is a new workplace social network that brings professionals together in a new era of remote work. Fishbowl provides thousands of industry and community-related bowls (aka groups) that allow verified professionals to have more honest and intimate conversations with other people working in roles and industries similar to their own.
Over the past several weeks, we saw a large increase in conversations about employers’ roles in addressing systemic racism and support for the Black Lives Matter cause. Our team decided to quantify the insights from these conversations, and polled employees on whether they expect their companies to speak out. We found that the majority of employees expect a public statement, but it varies significantly by industry.
In order to determine how many employees expect their companies to release a statement on recent events, we asked professionals one question:
“Do you expect your company to publicly speak up for the Black Lives Matter cause?”
Professionals could answer with one of two options: (A) Yes or (B) No. The survey ran from June 5 through June 7, 2020 and received responses from over 16,812 verified professionals on the Fishbowl app from across the United States. Respondents included employees at companies such as IBM, JP Morgan, Facebook, McKinsey, Deloitte, Bank of America, Amazon, Edelman, Nike, Google, KPMG and thousands of others.
Here’s what our survey revealed:
Expected company solidarity with Black Lives Matter by industry. Image Credits: Fishbowl (opens in a new window)
Most expect their company to speak up: Of the 16,812 professionals that responded, 11,638 (69.22%) answered that they expect their company to publicly speak up about the Black Lives Matter cause. A majority of professionals expect a statement of some sort from their employer.
By gender: 76.77% of women and 62.75% of men answered that they expect their company to speak up for the Black Lives Matter movement.
By industry: Human resources employees had the highest percentage of employees expecting their company to publicly respond about BLM, with a vast majority of 88.89%. Tech employees followed with 78.93%, while advertising employees were only marginally behind with 78.42%. Conversely, the law industry had the lowest percentage of employees expecting their company to speak up, with only 48.45%. Following closely behind were finance (56.92%) and teachers (57.21%).
By state: Out of the states with more than 100 responses, Californian participants were the most likely to expect their company to speak up about the movement, with 75.27%. Maryland (74.89%), Washington, D.C. (74.21%) and Massachusetts (74.02%) followed closely behind. Kansas showed the lowest percentage of employees expecting their company to show support for BLM, with 51.46%. Louisiana (57.14%), South Carolina (60.83%) and Missouri (61.93%) trailed behind.
As noted above, the response varied greatly by industry, with tech standing out toward the top, with 79% of employees expecting public statements from their employer.
Big tech companies and their CEOs command more attention from the media than any other industry. With that attention comes certain expectations and pressure to respond to important causes like BLM from the public and their own employees.
So, when these companies speak out (or don’t), the public takes note. Social networking platforms in particular rely on how the public perceives them for business. Not making a statement could lead to a loss of business for some of these companies. For example, Facebook’s inaction on posts by Trump about the protests led to user and employee backlash last week.
Companies within other industries, on the other hand, such as law firms, are not household names, nor have the same level of scrutiny from the public eye. If anything, law firms and the individuals working there are asked to represent both sides of any argument, supporting the survey results showing less than half of attorneys expected public statements from their employers.
What companies say (and don’t say) in coming weeks will greatly impact the relationship and trust with their employees. Now that tech giants like Apple, Google, Amazon and even TikTok, have made statements supporting the Black Lives Matter cause, the focus will shift from public statements to action and accountability.
As a recent Washington Post article on diversity in tech reveals, the words from these institutions might not always be representative of their actions. Employees of these companies are now rightfully asking their employers to turn their commitment to the cause into action by looking internally, and to start making the corporate environment more equitable for Black professionals.