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| Here is today's Monday Transportation briefing: - 🚗 The Biden administration announced new regulations on foreign EV materials.
- ✈️ Alaska Airlines is acquiring Hawaiian Airlines for $1.9B.
- 🚗 Fisker reduced its guidance for its annual production.
Robel
p/Robel-Kelkile | |
| 1 | | Alaska Airlines announced it will acquire Hawaiian Airlines for $1.9B. The move aims to maintain both brands while creating a stronger competitor in the U.S. airline market. More: - Alaska Airlines will pay $18 in cash per share for Hawaiian Airlines, totaling $1.9B, including assuming $900M in Hawaiian debt.
- The combined company aims to create a leading force in the $8B Hawaiian market while maintaining individual branding.
- The deal would expand connectivity to 138 destinations, offering nonstop service to 29 international destinations across the Americas, Asia, Australia, and the South Pacific.
- Both airlines plan to maintain Honolulu as a crucial hub and prioritize the growth of their union-represented workforce in Hawaii.
- The acquisition is subject to approval from Hawaiian Holdings shareholders and from U.S. regulators who have been concerned about potential fare increases.
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| 2 | | California-based EV startup Fisker has reduced its annual production guidance. The move aims to free up $300M in working capital. More: - Fisker initially aimed to produce 42,400 Ocean SUVs by 2023 but has successively revised its targets downward due to challenges.
- The company now expects to manufacture around 10,000 vehicles this year.
- This reduction marked the fourth since their optimistic forecast, citing market conditions and EV sales sentiments.
- Fisker's new strategy involves enhancing logistics, increasing outreach to reservation holders, and expanding retail, delivery, and service facilities.
- The company is set to launch a leasing program in the U.S., Canada, and Europe while reinforcing its team with new hires in finance and operations roles.
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| 3 | | Due to financial constraints, Sir Richard Branson has ruled out further investment in Virgin Galactic. Branson noted his business empire needs deep pockets post-COVID-19. More: - Branson's Virgin Galactic, founded in 2004, faced financial strain, recently announcing job cuts and flight suspensions to conserve cash for developing a larger spaceplane.
- Despite having funding until 2026 for the Delta vehicle, analysts anticipate the possibility of Galactic seeking additional funds around 2025.
- Branson emphasized financial limitations post-pandemic and believes Galactic's $1B reserves should suffice for its operations.
- Virgin Group remains a significant shareholder (7.7%) in Virgin Galactic, having sold over $1B in shares during the pandemic to protect other sectors.
- Branson's previous venture, Virgin Orbit, suffered a setback eight months ago after a failed U.K. launch, eventually running out of cash and filling for Chapter 11 amidst repeated delays.
- Virgin Galactic, yet to turn a profit, initially valued at $2.3B, now stands at $935M in market value.
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| 4 | | Luxor Capital Group has acquired bankrupt Volta Trucks. The financial details of the acquisition were undisclosed. More: - Luxor Capital Group, a New York hedge fund, acquired Volta Trucks after its bankruptcy filing to preserve the company's intellectual property.
- The acquisition saved a small number of positions while leaving the majority of the 600 U.K. employees jobless under the new ownership.
- The collapse of Proterra, a battery supplier to Volta Trucks, impacted production forecasts, hindering investor attraction.
- Volta Trucks had a substantial pipeline value of €4.2B and received pre-orders from customers like DB Schenker for 1,470 vehicles despite the bankruptcy.
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| 5 | | The Biden administration introduced restrictions on Chinese content in EV tax credit-eligible batteries. General Motors and Ford noted they anticipate maintaining eligibility for EV incentives. More: - New Foreign Entity Concern (FEOC) rules limit Chinese content in EV batteries, influencing automakers' investment decisions for battery production.
- The Treasury exempts trace materials for two years, ensuring nearly all vehicles remain eligible for EV incentives.
- Criteria for entities labeled FEOC include ownership or control by specific foreign governments like China, Russia, North Korea, and Iran.
- The rules tighten eligibility for EV tax credits and have prompted scrutiny and criticism from politicians like Sens. Marco Rubio (R-Fla.) and Joe Manchin (D-W.Va.).
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| 6 | | Hertz announced it would scale back its EV integration due to high repair costs and declining resale values. The move could impact its plans for a carbon-neutral fleet by 2030 and pose challenges for broader EV adoption in the U.S. More: - Hertz purchased 100,000 Teslas in 2021, comprising 20% of its fleet, and announced plans for an additional 65,000 EVs from Polestar in 2022 to accelerate EV adoption.
- The company noted repair costs for Teslas doubled compared to gas cars, impacting financials, and Tesla's price cuts decreased the resale value of Hertz's EVs, leading to higher losses.
- Additionally, an Uber partnership allocating half of the Teslas to drivers resulted in higher damage due to increased usage and complicated repairs.
- Despite setbacks, Hertz recognized the commitment to its long-term EV strategy, seeing value in being an early adopter in the market.
- The move comes as President Biden aims to boost EV manufacture and adoption, with plans for two-thirds of new cars and a quarter of new heavy trucks in the U.S. to be all-electric by 2032.
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| 7 | | QUICK HITS - The Kubernetes Cookbook is your comprehensive companion, equipping you with the knowledge and techniques to harness the full potential of Kubernetes.*
- The Boring Company, spearheaded by Elon Musk, finalized a new tunnel in Las Vegas as part of ongoing efforts to advance a comprehensive loop system encompassing a significant portion of the city's downtown area.
- San Jose, California, hosted a futuristic mass transportation event showcasing innovative approaches to transit.
- The Michigan Department of Transportation introduced a wireless electrified roadway in Detroit, functioning akin to wireless charging pads, where charging coils linked to the power grid transmit energy to receiver plates under vehicles, subsequently charging their batteries.
- A South African startup, GoMetro, secured £9M in funding for its software aimed at optimizing fleet management.
- Amazon acquired SpaceX rocket launches to facilitate its Kuiper satellite internet initiative.
- Maryland is prepared to unveil substantial reductions in funding for transportation agencies.
- Toast to 2024: Key affiliate marketing trends to help your campaigns start off on the right foot in the new year. Get the free report..*
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 | Writer | | Born and raised in the Bay Area, Robel Kelkile is passionate about all things tech, venture, and financial education. He has previously served both universities and state governments in their engagement strategy and tracking legislation. | | This newsletter was edited by Aaron Crutchfield | |
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