🌍 Fisker and the EV SPAC crash #202

Happy Monday!

Luxury EV maker Fisker declared bankruptcy last week, in another instance of the EV SPAC boom going bust. The dust is settling in the market as incumbents get in the game and the China trade wars heat up.

In deals, $398m for a climate and health fund, $317m for household energy, and $74m for recyclers across two deals.

In other news, a major nuclear bill passed in the US; BMW and Northvolt's contract was cancelled; and Elemental Excelerator launches a new funding tool.

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Fisker’s slow-moving car crash

What happened?

The beleaguered EV automaker Fisker took a U-turn last week when it announced it was filing for Chapter 11 bankruptcy (for the second time) last week.

It marks the end of a bumpy road for the company led by CEO Henrik Fisker, who previously drove its predecessor, Fisker Automotive, into bankruptcy in 2013. This iteration of Fisker Inc., which went public via a SPAC merger in October 2020, never reached mass production and relied on contract manufacturing in Austria by Magna Steyr and batteries from China's CATL. Quality issues plagued the company, resulting in poor sales. In February 2023, Fisker warned of potential bankruptcy, after investment talks with a major automaker (reportedly Nissan) failed.

Why now?

Fisker’s crash follows a wave of bankruptcies from previously hyped EV automakers and EV charging companies, particularly those that took the SPAC route, including:

Proterra, the electric bus manufacturer, SPACed in 2021 and filed for bankruptcy. last year, as we previously covered, after trouble locking in profitable contracts
Lordstown Motors, which made electric pickups, went public in 2020 and bankrupt in 2023, at which point it had little left to its name and tried to sell its factory to Foxconn, which ended in a lawsuit. However, it has recently reemerged under the name Nu Ride.
Electric Last Mile went from SPAC merger in 2021 to bankruptcy filing in June 2022, after lawsuits and mismanagement allegations, before Mullen Automotive, another EV truck maker that went public in 2021, bought what’s left.
Arrival, another EV manufacturer, went bankrupt this year and is selling its liquidated assets to EV maker Canoo, which is also struggling to get to production.
And others, such as Nikola and Faraday Future, are still in business but are trading for pennies on the share amid operational challenges. The valuations of Lucid Motors, Rivian, and several others in the space have also dropped significantly since initial highs.

Key takeaways

Each bankrupt company went bankrupt in its own way — financing shortfalls, supply chain issues, disappearing offtake, alleged mismanagement. But similar macroeconomic challenges put them and many of the ones still in business on a crash course:

Lots of money down. Starting an EV company from scratch means designing entirely new vehicles, building factories, developing supply chains, ramping up production to achieve economies of scale, and establishing sales and service networks. It’s capital-intensive, and current high interest rates and supply chain disruptions have squeezed margins and access to new capital even more. With few options, they can go offroad with debt, or bankruptcy and restructuring.
M&A has the final say. Several of the climate tech SPACs that recorded frothy valuations during the SPAC boom have now been acquired for pennies on the dollars through strategic, tuck-in acquisitions. Volta was scooped up by Shell in 2023 for $169m down from a $2bn peak valuation in 2021. Volvo Cars announced earlier this year that they had acquired the battery division of climate tech darling Proterra. And it’s not just EV-related companies — e-scooter company Bird and indoor farming company AppHarvest also recently announced bankruptcies.
Major auto OEMs already revved up. As incumbent automakers get into the EV game, they’re well positioned to capitalize on their existing supply chains and production facilities. Getting a commercial EV manufacturing facility running at full capacity has always been a challenge. Even the likes of Rivian and Tesla who are challenging the auto incumbents have struggled with both production issues and supply chain disruptions.
A global EV sales slump. In today’s high-interest rate environment, new potential EV buyers are balking at high prices, and sales are stalling — EV sales declined 7.3% in Q1’2024 from Q4’2023. Frontrunner Tesla’s market share declined from 62% at the beginning of 2023 to 51% at the end of Q1’2024.
And diverging geopolitical headwinds. Meanwhile, both the EU and US have levied tariffs on EVs and parts from China, which has the clear global market leader BYD. Supply chains are becoming more expensive and complex, which are hard for newer startups to navigate. Plus, investors are underwriting for a possible Trump presidency, as EVs have become a Trump talking point. This could hit the market even harder.

Deals of the Week (6/17 - 6/23)

Late-Stage / Growth

♻️ Sortera Technologies, a Fort Wayne, IN-based metal recycler, raised $44m in Series C funding from Breakthrough Energy Ventures, Macquarie Group, Misubishi Mineral Resources Group, and RA Capital Management.

⚡ M2X Energy, a Rockledge, FL-based modular gas-to-methanol developer, raised $40m in Series B funding from Conifer Infrastructure Partners, AddVentures, Autodesk Foundation, Breakthrough Energy Ventures, and Eni Next.

🥩 THIS, a London, England-based plant-based food maker, raised $25m in Series C funding from Planet First Partners.

🚗 Kinetic Automation, an Orange, CA-based EV servicing robotics maker, raised $21m in Series B funding from Menlo Ventures, Allstate Strategic Ventures, Construct Capital, Haystack Ventures, Liberty Mutual Strategic Ventures, and Lux Capital.

Early-Stage

🔋 Princeton NuEnergy, a Bordentown, NJ-based lithium-ion battery recycler, raised $30m in Series A funding from Helium-3 Ventures, Samsung Ventures, Honda Motor Company, LKQ Corporation, SCG, Traxys North America, and Wistron Corporation.

💨 CuspAI, a Cambridge, England-based genAI-driven search for new materials platform, raised $30m in Seed funding from Hoxton Ventures, Basis Set Ventures, FJ Labs, Giant Ventures, Lightspeed, Northzone, Tiferes Ventures, and Zero Prime Ventures.

⚡ Molten Industries, a San Francisco, CA-based methane pyrolysis developer, raised $25m in Series A funding from Breakthrough Energy Ventures, Fifty Years, J4 Ventures, Jane Woodward, Mark Heising, Moai Capital, Peter Attia, Sozo Ventures, Steelhead Capital, UVC Partners, and Union Square Ventures.

🥩 Tender Food, a Boston, MA-based alternative meat maker, raised $11m in Series A funding from Rhapsody Venture Partners, Claridge Partners, Lowercarbon Capital, Nor’easter Ventures, and Safar Partners.

🏭 Maxterial, a Los Altos, CA-based sustainable advanced materials platform, raised $8m in Series A funding from Helios Climate Ventures, Mott Corporation, and QEMETICA.

🏠 Bisly, a Tallinn, Estonia-based energy-efficient building appliances maker, raised $6.7m in Series A funding from Aconterra, Pinorena Capital, and SmartCap Green Fund.

⚡ atmio, a Hamburg, Germany-based methane leak detection platform, raised $5.5m in Seed funding from Notion Capital, HCVC, Robin Capital, and Squareone.

🌾 Farmbot, a Sydney, Australia-based agricultural robotics maker, raised $4.6m in Series A funding from Macdoch Ventures and Telstra Ventures.

🌱 forward earth, a Berlin, Germany-based automated carbon management platform, raised $3.4m in Pre-Seed funding from Speedinvest, Lucid Capital, and Revent, and received $1.3m in Grant funding from European Regional Development Fund (EFRE).

🌱 Stepwise, a Stavanger, Norway-based emissions reduction SaaS platform, raised $3.3m in Seed funding.

Other

🏠 Hometree, a London, England-based household energy system maintenance platform, raised $317m in Debt funding from Barclays.

🚗 EKA Mobility, a Pune, India-based electric vehicle manufacturer, raised $24m in Corporate Strategic funding from Mitsui & Co.

🥩 Ever After Foods, a Tel Aviv, Israel-based cultivated meat technology maker, raised $10m in Corporate Strategic funding from Pluri and Tnuva.

🔋 Rondo Energy, an Oakland, CA-based low-carbon industrial heat through thermal radiation developer, raised an undisclosed amount of Corporate Strategic funding from H&M Group Ventures.

Exits

☀️ Ojjo, a San Rafael, CA-based solar truss foundation maker, was acquired by Nextracker.

⚡ bp Bunge Bioenergia S.A., a São Paulo, Brazil-based sugarcane ethanol joint venture, raised PE Buyout funding from BP.

🚗 Fisker, a Los Angeles, CA-based EV maker, filed for bankruptcy.

New Funds

The Engine Ventures, a Cambridge, MA-based investment firm, raised $398m for their third fund that invests in companies working to commercialize “tough tech” across climate, human health, and advanced systems technology verticals.

Collaborative Fund, a New York, NY-based investment firm, raised $125m for their sixth flagship fund that invests across climate, health, and food.

Wind, a Paris, France-based investment firm, held a first close of $96m for their next article 9 fund that will invest in early-stage sustainable deeptech solutions.

Refactor Capital, a Burlingame, CA-based investment firm, raised $50m for their fourth fund that invests across biotech, climate and hard tech startups.

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In the News

German automaker BMW announced it was canceling its $2.2bn contract for EV battery cells with Swedish battery startup Northvolt, amid reports that the well-funded battery maker was experiencing production delays. Northvolt also recently abandoned its plans to build a cathode facility, which would help it vertically integrate its supply chain, after troubles with siting.

Elemental Excelerator announced a new funding tool, "D-SAFE." As CEO Dawn Lippert told us, after conducting research with BCG that quantified the climate scaling financing gap at $150bn last year, Elemental "took steps to infuse more capital directly into projects and push the boundaries of current investment practices. This resulted in the creation of the D-SAFE, a twist on the traditional SAFE that works very well to fund the development gap (and that we’ve used to catalyze eight projects over the last year, with more to come).”

The ADVANCE Act recently passed by Congress, helping to streamline the NRC licensing process, reducing fees for advanced nuclear technology application reviews by the NRC, and exempting nuclear fusion from the stringent regulations applied to fission. The DOE also announced $900m in funding to support the deployment of light-water small modular reactors.

Salesforce joined Frontier and has committed $25m to the advance market commitment which will collectively buy more than $1bn of permanent carbon removal by 2030. And in more carbon removal news, Frontier signed $48.6m in offtake agreements with Stockholm Exergi to support a carbon removal retrofit at its biomass-fueled district heating facility. CarbonCapture Inc. is also establishing the first U.S. direct air capture system, a modular DAC unit designed for mass production. And Indigo Ag said it will deliver 40,000 soil-based carbon credits to Microsoft, the largest single delivery of credits by the company.

CATL unveiled more details about its new grid-scale battery energy storage system (BESS) product, Tener, at ees Europe. The company claims the Tener BESS features zero degradation in the first five years due to pre-lithiation techniques, offering more cost-effective deployment. CATL attributes its decision to apply the technology to grid-scale BESS instead of EVs to greater market demand for improvements in the lifetime for the batteries.

BP announced its acquisition of the remaining 50% stake in BP Bunge Bioenergia from Bunge for $1.4 billion, gaining full control over one of Brazil's leading biofuel companies. In tandem with this acquisition, BP has decided to scale back its plans for developing new sustainable aviation fuel (SAF) and renewable diesel biofuels projects.

Hawaii's governor and lawyers for youth plaintiffs reached a historic settlement in a climate lawsuit alleging the state violated its constitution by operating a transportation system that harmed the climate. This agreement, the first of its kind globally, mandates Hawaii to reduce transportation sector emissions and involves young people in climate impact consultations.

The European Commission's Innovation Fund is awarding $186m to 18 climate tech projects, focusing on renewable energy, energy storage, and energy-intensive industries in 24 countries. The Innovation Fund will bring in an estimated revenue of €40 billion from the EU ETS between 2020 and 2030 and has already awarded €6.5 billion to over 100 projects.

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Opportunities & Events

📅 London Climate Action Week: Register to attend London Climate Action Week from June 22-30th for an annual festival, founded by E3G and the Mayor of London, to engage in a diverse range of events aimed at finding global solutions to climate change.

📅 GCV Symposium: Register to attend the 2024 GCV Symposium in London on June 24-26th to connect with corporate investors, innovators, venture capitalists, and entrepreneurs.

📅 Battery Conference: Register to attend the Lithium Supply and Battery Raw Materials Conference on June 24-27th to connect with leading experts from across the supply chain in discussions, debates, and networking events.

📅 Reuters Energy Transition Conference: Register to attend the Reuters Global Energy Transition Conference from June 25-27th to join hundreds of energy, finance, corporate, and government executives for debates, interviews, and interactive roundtable discussions.

📅 Fusion Industry Landscape: Apply to join the Fusion Energy Landscape Overview hosted by Gigascale Capital during SF Deep Tech Week on June 26th for a deep dive into fusion energy with founders, engineers, scientists, and policymakers.

📅 Decarbonizing Shipping Forum: Register to attend the Decarbonization Shipping Forum on June 26-27th to discuss innovative solutions and collaborative efforts needed to achieve a sustainable, carbon-neutral shipping industry.

💡 Boston Building Decarbonization Grants: Apply to the Equitable Emissions Investment Fund by July 12th for your nonprofit to receive $250-750k in grants to decarbonize buildings in order to meet emission guidelines in Boston.

💡 Google Climate Accelerator: Apply to the Google for Startups Climate Change Accelerator by July 21st for a 10-week, equity-free hybrid program for Seed to Series A climate startups providing technical support, and workshops focused on product design and business growth.

💡 DOE Methane FOA: Apply to the Methane Emissions Mitigation and Quantification Program under the IRA by August 26th to access $850m in grants for projects that minimize methane emissions from oil and natural gas production, processing and transportation.