Apple - Fisker Entrée

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Fisker is currently going through bankruptcy after failing to acquire additional funding.

Fisker has some 4000 vehicles unsold, and many vehicles facing recall.  In total, somewhere around 10,000 vehicles have been produced.  The principle of a bankruptcy action in this case is to acquire all assets, pay off some proportion of loans, and make Fisker a design component of a future endeavor.

Fisker's Ocean is the model in circulation, and appears well-suited for an initial rental application.  In general, while plans are determined, a rental car company can receive some returns on investment as the rest of the organizational structure is finalized.  The purchase price, in effect, for acquired vehicles is $20,000, and the installed assets will have residual value once the vehicle reaches end of life.  Whereas typically car companies may seek to offload used vehicles at between 30-40k miles of use, in principle the motors will have better longevity and the vehicle will retain resale value at least at the rate of the purchase price via bankruptcy.

The rental strategy may have some general sales potential, as the sales strategy of allowing people to rent to test drive offers a kind of intimacy not available through other methods.  In addition, the strategy would be limited to the Western states with a priority on California, reducing overhead through a form of centralization and direct-to consumer sales.  Fisker vehicles might allow for B2B dealership sales in limited quantities with trusted vendors. The Fisker branding of the Ocean already has value with regards to the vehicle name as well as the "California mode" window/sunroof automation feature.

The Ocean, as it stands, utilizes a Driver Monitoring System from Seeing Machines which can aid in controlling responsible rental driving and offsetting insurance costs.  This integrated feature in operation within the current batch further places the Ocean within the realm of risk-mitigated rental service.

As the present manufacturing footprint for the Ocean is/was limited to Magna's facilities in Austria, and as a result of that the vehicle's qualification for US EV credits was limited, a switch to domestic manufacturing could improve the overall sales potential in the US market.  Upon validation and excellence in the US market, sales could be extended elsewhere.

Fisker and Fisker's Ocean represents a potential vehicle for heavy experimentation by Apple to integrate a mobility package (software, HUD, display hardware), and the lessons within that foray could be extended to other vehicles that Apple chooses to partner with for Apple Carplay integration or as dedicated Apple vehicles.  In this sense, the Ocean, in a rental setting, might allow for customers to choose between an Android or Apple ecosystem, and then decide to purchase a heavy-integrated Apple vehicle based on their experience.

Fisker, in this paradigmatic entry, represents an initial stopgap with the potential full dedicated "Apple experience" in the Fisker Pear, or a second iteration of the Ocean (model year or otherwise).

As Fisker undergoes bankruptcy, a potential agreement with Nissan for production of the Fisker Alaska pickup truck is pending.  The promise of that deal is US-based manufacture and financial support.  In this sense, the viability of design-to-license production could offset even initial liabilities, provided sufficient runway for operations.

Fisker's assets in bankruptcy include manufacturing tooling used by Magna but owned by Fisker.  This singular item type represents approximately $400M in value, and provides for the continuation of the production of the Ocean.  Fiaker's liabilities includes a bank loan owed to US Bank of approximately $875M.  Presuming that liability is reduced in a white knight bankruptcy agreement, the worst-case upside even for a short-term experiment weighed against Apple's cash-on-hand provides for an attractive investment opportunity given the long-term upside.

The Volvo Group represents the controlling stake in a variety of Volvo properties with Geely being the other primary entity.  Production of Volvo Cars, which is currently in the process of making a full transition to EVs, is done across the world, with several manufacturing facilities in the US.

Polestar, once a subsidiary of Volvo, is now considered a subsidiary of Geely, having acquired a controlling stake.  While Geely appears to be focused on integrating Polestar into its own vehicle portfolio (and is already producing its vehicles in China), there is a possibility that Polestar and the Swedish design team could transition alongside a Volvo redirection.

In any regard, Volvo had a market cap of some $34B, making the acquisition a major investment, and a dedicated long-term play for the prospects of an Apple Car.  As far as an acquisition goes from a risk perspective, while many companies such as Volvo are bullish on the EV transition, as we have seen the path is not necessarily as fast and straight as previously believed.  A transition of this size to EVs both from a manufacturing investment and sales perspective adds considerable risk for Volvo, and from a shareholder perspective an acquisition by Apple both as a value-add and as a risk-mitigation measure would likely be an attractive proposition.

The Polestar property as it relates to Volvo has several cautionary examples to consider:

1.  Polestar was arguably branded as "Volvo+" without much if any added value.

2.  Service stations, depending on location, might have service stations branded as Polestar, it might be Volvo, or it might be co-branded.  In some cases service still might be contracted to third parties under the Volvo or Polestar umbrella.

3.  While Polestar was a first entry into a dedicated EV platform, Volvo quickly muddied the differentiating factors between the brands while Polestar attempted to establish itself as a multi-car brand.

4.  Without having first transitioned to EVs a part supply overlap between the vehicles would be necessarily limited, but the overlap would be potentially visual, again reducing the differentiating factors.

Polestar itself could become the "Apple Brand", and the Volvo transition to EVs would then provide for more overlap, and a better service relationship could be organized under the governance of Apple standards and policies.

Independent of the Polestar - Geely connection, Volvo represents simultaneously a "turn-key operation" as well as a robust EV startup.  It has a sizeable global presence that may be attractive to Apple for a "fast start", once a development and logistics/sales model can be established.

AB Volvo is a wholly-owned subsidiary of the Volvo Group.  AB Volvo is the parent company of Volvo Heavy Construction.  Through the purchase of the Volvo Group, Volvo Heavy Construction would then be able to provide a foundation on which electrification of Heavy Industry Machinery could be accelerated.

The purpose of electrification of the heavy machinery used in the construction of these infrastructure projects is two-fold:

1.  Switching to EV infrastructure along the corridor is already part of the plan, and ultimately improves energy efficiency at the point of use.

2.  The paradigmatic shift on large-scale projects can inform the general construction industry and serve as a model.

The primary difference between electrified machinery is the tethering requirements being employed.  There are three basic models:

1.  A generator (mobile or otherwise) that supplies on-site energy.  For large, long-term projects, solar arrays can be deployed to balance energy demand.

2.  A mobile energy supply (extendable or pre-built cabling/conduit) that allows constant plug-in to the grid, replacing or supplementing generator power.

3.  An on-site or nearby Charging facility that allows Battery-Electric Vehicles (BEVs) or Hybrid-Electric Vehicles (HEVs) to plug in as shifts demand.

In general, equipment can be directly tethered to the grid in the same way a vacuum cleaner is plugged into a wall outlet, with the operator managing cables as the work is done.  Depending on the operational footprint, the layout and length of cable may vary.  Whether it is an Electric Tunnel Boring Machine (TBM) or a series of excavators and electrified trucks, the use case defines the efficacy of the method.  A pure BEV rock truck is unlikely to be a suitable solution without vastly improved charge times and expensive infrastructure development for high voltage charging.  For excavators or large dredges that move slowly, a continuous "plug-in" model with battery backup is likely appropriate.  Particularly for projects moving in a straight line (TBMs, dredges :: tunnels, trenches) cable management is only required in the continuous extension of cabling up to a certain point, or the establishment of a new generator source.