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When I visited the Electrify Expo in Long Beach, California last month, the traditional automakers had set up tents and booths buzzing with happy representatives ready to show off their electric and electrified vehicles to the media and the public. And then there was Fisker, where one lonely man sat amid a group of Ocean EVs, wondering whether anyone would talk to him.
The writing was already on the wall that day. This week, the electric startup filed for its inevitable Chapter 11 bankruptcy protection.
In March, Fisker slashed the prices of its vehicles in a desperate attempt to stave off bankruptcy. It did not succeed, nor was there ever a real chance that it would. The collapse marks the second failed car company for founder Henrik Fisker, and the list of reasons makes for an excellent business school case study in what not to do. But for those of us who own an electric vehicle, or may soon buy one, Fisker’s downfall brings up a question that’s especially pointed for anyone buying a car from an EV startup: What happens if the company that made your car isn’t around anymore?
The problem is as old as the car industry. While Ford and Chevrolet feel like they’ve been around since the dawn of time, automotive history is littered with car brands that don’t make cars anymore. Studebaker. Hudson. Pontiac. Oldsmobile. Saturn. Packard. One could go on. When the companies disappeared, their vehicles became “orphan cars” with no parent company around to make parts for or fix them.
Not every orphanage looks the same. Pontiac and Oldsmobile, for example, were divisions of General Motors by the time they were killed off, so GM remained to honor warranty claims on the cars. Plymouth owners had parent company Chrysler to turn to when that marque went to the chrome mausoleum. Sometimes, a car brand like Isuzu or Suzuki quits selling cars in the American market but the company itself remains intact, and so many have been sold previously that plenty of shops and mechanics who know how to work on those vehicles remain.
When a car company that hasn’t operated in the United States for many years disappears entirely, things get dicier. Enthusiasts still collect and drive vehicles from long-dead carmakers. But acquiring parts for them can be a wild goose chase, and maintaining them relies on knowledge passed down among a select few.
Here in the EV era, the few-thousand people who bought (and actually received) a Fisker Ocean are in a tight spot. Their warranty coverage will technically endure as long as Fisker’s court proceedings are ongoing, since it’s always possible that the company could emerge from Chapter 11 and still exist on the other side. As long as Fisker is in limbo, Ocean owners might be able to get the company to fix their cars.
If the company truly goes belly-up, though — which seems like the likeliest outcome — then all bets are off. Fisker’s assets would be liquidated, and owners may be lost in the shuffle as the automaker’s pieces are sold off for pennies on the dollar to anybody who might want them.
Any Fisker-specific parts would be extremely hard to come by if the company (which was slow on its production goals in the first place) vanishes. There would be no more over-the-air software updates to add features or fix bugs; that’s more bad news since right up to the point of bankruptcy, the company was sending out updates just to fix basic operations. Even relatively simple repairs may be hard to achieve once Fisker is no more. The U.S. faces an ongoing shortage of auto mechanics trained to fix electric vehicles, which are an entirely different beast compared to internal combustion. It’s not like any old garage down the street could or would work on an Ocean.
Ocean owners are not silently accepting this crappy outcome. A bunch of them just banded together to form the Fisker Owners Association in the hopes of collectively keeping their rides driveable and viable long after Fisker the company is no more. They are fighting for ongoing support of the Ocean’s software and continued access to the 4G internet the vehicle needs for its in-car navigation system to work. They are tearing apart their Oceans to find out which parts are common and which are proprietary, and using that knowledge to build a database for all Fisker drivers.
Their troubles — and their collective action to take more control over their own cars — should be a note of both warning and hope to other EV drivers. Perhaps the disarray at Fisker makes it a special case that was doomed to fail at some point. But even respected and well-regarded EV startups like Lucid and Rivian aren’t in the rosiest financial situation. The former had to severely slow down its production projections; the latter is trying to navigate the “valley of death” until it can get its mass-market R2 and R3 vehicles on sale. Even EV king Tesla was reportedly “about a month” from bankruptcy during the dire months of 2020 when it tried to scale up manufacturing of the Model 3. Oh, and there was that time in the 2000s that Detroit’s Big Three nearly collapsed.
Rivian and Lucid owners are surely in a better spot than their Fisker counterparts — both companies are in a better position to succeed than Fisker ever was, and are more likely to receive the investment they’ll need to avoid going to bankruptcy court, should it ever come to that. But there’s never a sure thing in life, and owning an EV from a new company inherently generates some risk of becoming an orphan.
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Let’s talk more about Denali ... that is, Mt. McKinley.
President Donald Trump signed 46 presidential actions during his first 12 hours in office, including overturning 78 of former President Joe Biden’s executive orders. Between Trump’s moves with major ramifications (like ending all wind permits) and those that seem to represent more personal grievances (like free-flowing showerheads), there has been much confusion over what they all mean.
Some would argue that is the entire point: “The more bizarreness Trump generates,” the journalist Edward Luce wrote last year for The Financial Times, “the less people notice.” Steve Bannon, Trump’s chief strategist during his rise to power in 2015 and 2016, memorably described this as a deliberate technique of “flood[ing] the zone with shit.”
Whatever way you frame it, though, where there’s Trump, there’s noises, which means news can fall through the cracks. Here’s our list of what you might have missed during Trump’s first hours as president and what might happen next.
In one of his first actions in office, Trump repealed almost seven-dozen Biden-era executive orders, including Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.”
Signed on Biden’s Inauguration Day, the policy called for the government to take a “comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.” That meant that the Environmental Protection Agency considered things like race and socioeconomic status — given the historic burdens put on frontline communities — during its permitting processes. Trump also signed a new executive order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which limits government agencies from considering the impacts on disadvantaged communities. The administration has reportedly gone as far as to warn government employees that they could face consequences for failing to report on colleagues whose diversity and inclusion efforts might slip past its notice.
As Dan Farber writes for Legal Planet, however, to carry out this anti-diversity, equity, and inclusion executive order, “agencies will have to eliminate their own environmental justice regulations. At that point, the door will be open to judicial review. I think agencies will have a hard time justifying the repeals.”
Trump further overturned Executive Order 14008, “Tackling the Climate Crisis at Home and Abroad,” another first-week Biden policy. In addition to declaring climate change a national security risk, the order also created the Justice40 initiative, directing 40% of federal climate spending to disadvantaged communities.
Jillian Blanchard, the Climate Change and Environmental Justice Program director at Lawyers for Good Government, told me this was also legally dubious. “There’s already existing infrastructure and policies in place that can’t be undone by an executive order,” she said — for example, grants for ongoing efforts to install EV chargers in disadvantaged communities, or clean-up projects in coal mining communities in Appalachia. “I think it’s important to take a minute and say, okay, what does this mean in practice?”
Blanchard added that, in particular, Trump’s moves on environmental justice “make me question what this administration plans to do with Title VI of the Civil Rights Act,” which prohibits race-based discrimination in programs that receive federal funding. “There’s really important questions here that are being raised that everyone should be paying attention to.”
Trump also repealed Executive Order 14030, “Climate-Related Financial Risk,” signed by Biden in May 2021. The executive order called for government-wide assessment and disclosure of climate-related financial risks to U.S. programs, and ordered the Secretary of Labor to submit a report on actions to protect U.S. workers’ savings and pensions from those same threats. Executive Order 14030 also established the Federal Flood Risk Management Standard, which called for government agencies to be more conservative when siting projects that could face sea-level rise or flood threats.
In addition to government agencies no longer being required to consider how extreme weather and climate risks might threaten their operations, Trump’s executive order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” also takes aim at diversity, equity, and inclusion hiring practices, or the “social” aspect of ESG.
Though you’ve probably already heard about Trump’s attempt to spangle the Gulf of Mexico with a new name, the “ Restoring Names That Honor American Greatness” executive order also calls for reverting the name of North America’s highest peak, Denali, back to Mt. McKinley.
The political effort to change the mountain’s name to Denali, backed by the state’s Republican politicians, dates back to the 1970s. (It took until 2015 for the name to be changed to the Alaskan Athabaskan word meaning “the high one” because of the Ohio delegation’s insistence on honoring its native president.) Trump’s decision to restore the mountain’s colonial name is a pointed brush-off of Alaskan Natives and represents a troubling precedent by his administration of undermining promises made to Indigenous partners by the federal government.
Tribal partners have historically assisted the U.S. government on issues of land use, resource management, and climate resiliency, and can prove formidable opponents to projects that lack their support. By disregarding Alaskan Natives’ support of the name Denali, Trump risks alienating the greater Indigenous community and starting off on a contentious footing with one of the government’s most valuable allies.
When the Los Angeles County fires began earlier this month, Trump launched a renewed crusade against the “essentially worthless” Delta smelt, a nearly extinct two-inch-long fish. Per the then-president-elect, California’s Democratic Governor Gavin Newsom had supposedly refused to sign a “water restoration declaration” that would have “allowed millions of gallons of water … from the North to flow daily into many parts of California,” where it allegedly could have helped to fight the devastating fires.
Only, there was no “water restoration declaration.” The vast majority of Los Angeles’ water doesn’t come from northern California, and the smelt have nothing to do with the water shortages some fire crews faced. That didn’t prevent Trump from issuing a memorandum to “stop radical environmentalism” and put “people over fish.” Still, it is so vague that it appears to be more of a nod to the Trump-supporting farmers in California’s Central Valley, who occasionally face water restrictions during droughts to protect the smelt.
“It’s all political posturing — it’s all an attempt to shock and awe,” Blanchard told me of the executive orders taken in sum. She added that “it’s going to be really important for people to take a deep breath and recognize that many of these things are not legal and challenges will be put in place.”
“Don’t become too distracted by fear and uncertainty,” she went on, “because that is one of their main goals.”
With plenty more to come.
A conversation with Bob Moczulewski, tax director for law firm Baker Tilly’s federal credits and incentives practice
Given the Trump administration’s new pause on grants under the Inflation Reduction Act, this week’s conversation is with Bob Moczulewski, tax director for law firm Baker Tilly’s federal credits and incentives practice. We asked him to explain this 90-day pause via executive order, because if anyone’s going to cut the nonsense and tell you what actually matters here, it’ll be a tax attorney.
The following chat was lightly edited for clarity.
Does Trump’s executive order actually impact the IRA’s tax credits?
The IRA had several components to it, most of which – the biggest things – are tax credits. Those are written into tax law. They are a legally binding ability for developers and users, creators of renewable energy that are allowed within the law – wind, solar, geothermal, battery storage, biogas – those are laws.
[The order] has a stop on those items that were more discretionary that had the control of the administration to delegate out: its grants, loans, and contracts. That has no impact on the tax credits, where the bulk of the IRA sits right now. A lot of that stuff was in anticipation of being heavily pushed through and sent out before January 20. There’s actual impact there. But tax credits are not appropriated funds.
This is not holding back the tax credits that are there.
You’ve said it is unclear if this covers all prospective funding, like direct pay?
If you’re a municipality and you put up a solar project that is eligible for tax credits and direct pay, that is the part with this potential slow play that could be done here. We really don’t know what the executive branch can do to hold back the payment of those direct payments. If you’re a business, you put up a solar, it’s a $10,000 tax credit, you can use it to reduce your taxable income. None of these orders impact that.
Now if you’re a municipality and you’re requesting a direct payment for those tax credits that are legally binding in tax law, I could see the possibility that an executive branch could have pressure on the Treasury Department, which has pressure on the IRS, to slow play those payments. But that’s only speculation. The law is stated, this is supposed to be paid out. This is in a realm of, y’know, almost a conspiracy theory-type of thing that could be done.
With respect to how a pause like this can impact the bankability of IRA, are you seeing it affect executives’ views on the durability of the law?
I would say there’s just a lot of caution as to [the] next steps around it. These are laws. Until the laws are repealed, if they are repealed, that would be the only way you’d know for certain.
As I’ve explained many times over, the history of tax credit laws is once they’re repealed or altered, those changes are prospective as to the time the law is changed. If I have a half a billion dollar solar project underway, I’ve met or begun a construction criteria. There has been no prior passing of tax laws that would revoke the ability to claim credits on that.
What are you watching for next for clarity?
There’s two things I’m looking for in the future. Where pundits around this really feel this is truly going. And the other part is to see if there’s any actual traction to repeal the tax credits that exist right now.
There’s a whole new realm of credits that begin in 2025 and continue through 2032. Will there be incentive to repeal those credits?
I have clients that are engaging in multi billions of dollars of projects that are in the heart of the southern tier of the United States of America, that would impact thousands of jobs. Those groups have strong ties to a lot of senators and congresspeople along the way. Just enough of a push and turn on this and all it takes is a few senators to not go along with it.
And more of the week's news in renewable energy fights.
1. Magic Valley, Idaho – It’s never a dull day for the Lava Ridge wind project.
2. Multiple counties, Ohio – Regulators in Ohio issued final decisions for two contested solar projects, clearing the way for one while all but stopping another.
3. Pender County, North Carolina – A solar project that was rejected late last year by the North Carolina Court of Appeals will be reconsidered by the same court, after the Democrat vote that decided the case was replaced by a Republican.
4. Lancaster County, Nebraska – in We have good news for solar in Nebraska, where county commissioners have approved a massive NextEra solar project.
5. Montgomery County, Alabama – Another solar project – Silicon Ranch – also got approval this past week from the local Board of Adjustments, meaning a Meta data center is now poised to receive renewable energy.
Here’s what else we’re watching ...
In Kansas, landowners are suing to stop a NextEra solar project in Jackson County.
In Oklahoma, a Woodside-backed hydrogen project has been paused citing the Trump administration’s changes in policy.
In Nevada, the Bureau of Land Management cleared the way for the Rough Hat solar project days before Joe Biden left office.