WSJ : This Startup Promised to Help Fashion Go Green. Brands Didn’t Want to Pay

This Startup Promised to Help Fashion Go Green. Brands Didn’t Want to Pay for It.
Many clothing brands say environmentally friendly materials are key to their future, but uptake has been sluggish

When a Swedish startup launched a new material made from recycled textiles in late 2022, the fashion industry hailed it as a game changer in its efforts to lessen its environmental impact.

Last month, the company, Renewcell, filed for bankruptcy. While some big retailers, including H&M and Zara, were enthusiastic backers, not enough brands committed to buying its material. Having misjudged how quickly the fashion industry would switch to more sustainable sourcing, the company was left with a costly factory running far below capacity.

The plight of Renewcell illustrates the fashion industry’s hesitancy in adopting new materials that may be better for the environment but typically cost more, at least in the short term. It is also another sign of how some companies are putting less emphasis on green initiatives amid a more challenging economic climate.

“There’s a disconnect” between some companies’ stated sustainability ambitions and what they actually do, said Tricia Carey, Renewcell’s chief commercial officer. “Fashion brands have the intention,” Carey said, “but many are lacking the road map to make it happen.”

Making clothes uses a large and growing amount of the planet’s resources. More than 100 billion garments are produced annually and that number is set to rise by one-third by 2030, according to the Ellen MacArthur Foundation, a nonprofit. It says the average garment is worn only 10 times before being discarded, often ending up in the trash. The fashion industry is responsible for as much as 8% of global greenhouse-gas emissions, according to the United Nations Alliance for Sustainable Fashion.

H&M was the first retailer to launch products containing Renewcell’s Circulose material. PHOTO: H&M
Fashion brands have come under growing pressure from consumers and regulators to reduce their environmental impact, posing a dilemma for an industry hardwired to keep increasing sales by churning out more clothes.

To burnish their green credentials, brands have encouraged consumers to repair, recycle or sell old clothes rather than throw them away. They have also invested in so-called next-generation materials that promise to use fewer resources and, in some cases, have the potential to be recycled again and again.

Inditex, the parent company of Zara, says it wants a quarter of the fiber it uses to be made from next-generation materials by 2030. To foster new materials, the company has worked with more than 300 startups, also including Renewcell, through a Sustainability Innovation Hub that it set up four years ago.

H&M says it wants recycled fibers to constitute half of the material it uses by 2030. The company has invested in more than 25 sustainability startups, including Renewcell.

So far, the uptake of greener material has been sluggish. Recycled materials made up 7.9% of global fiber production in 2022, down from 8.5% the year before, according to the Textile Exchange, a nonprofit that advocates the adoption of more environmentally friendly materials. Much of that came from recycled plastic bottles, with less than 1% of all fiber coming from recycled textiles.

That’s despite next-generation materials attracting more than $3 billion of investment over the past decade, according to the Material Innovation Initiative, with dozens of new-textile companies launched during that time.

Founded in 2012, Renewcell became the first chemical textile-to-textile recycler to start producing material on a commercial scale.

Its material is called Circulose, which is produced by treating old textiles with chemicals to create a cellulose pulp. This is dried into sheets, which fiber producers can then dissolve to produce viscose and other materials that are used to make clothes. Unlike mechanically recycled fibers, which fray and ultimately disintegrate, Renewcell’s chemical process breaks old textiles down to the level of individual molecules from which strong, new fibers are made. These can be recycled indefinitely via the same process.

With many fashion companies pledging to invest in new textiles to be more sustainable, Renewcell bet on strong demand for its material.

The company raised $158 million, mostly through a 2020 listing in Stockholm, and invested $125 million to convert an old paper mill in eastern Sweden into a Circulose factory capable of producing 60,000 metric tons a year.

Renewcell also outlined plans for two additional factories that would increase its output sixfold by 2030.

Besides Inditex and H&M, Calvin Klein and Tommy Hilfiger owner PVH committed to buying significant quantities of fiber made from Circulose.

But Renewcell hit a brick wall in talks with other big brands. In meetings, brand executives would often express excitement and agree to pilot projects, only to balk at placing commercial-scale orders, said Carey.

Jolts to the economy, such as Russia’s invasion of Ukraine, and shaky consumer confidence had made brands risk averse.

Would-be customers fixated on how fiber made from Circulose cost 20% to 45% more than the virgin fibers they typically bought, as well as uncertainty about integrating a new material into their supply chains, Carey said. Fiber typically accounts for about 5% of the retail price of a finished garment.

Renewcell needed its factory to reach full output quickly to become commercially viable, but it achieved only 30% capacity last year as anticipated orders failed to materialize.

By October, the company was running out of cash, and in January it laid off a quarter of its 130 staff. It filed for bankruptcy in February after failing to secure fresh investment.

Renewcell is now seeking a buyer to repay its debts and restart production.

The company’s predicament is a grim sign for a clothing industry that claims to want to transform itself, said Claire Bergkamp, managing director of the Textile Exchange.

“My hope is this will be a wake-up call for the industry,” she said.

Unless fashion companies commit to paying higher prices for new, greener materials, other fiber startups could also struggle, Bergkamp added.

While the transition from gasoline cars to electric vehicles has benefited from billions of dollars in subsidies, the move to new textiles has received practically no government support, making startups reliant on private funding.

That has left some big clothing companies, notably H&M and Inditex, shouldering a relatively large share of the burden of supporting new-material startups.

H&M invested in Renewcell in 2017 and was the first retailer to launch products containing Circulose. It currently sells around three dozen products containing the material.

The retailer wanted to invest more but decided not to commit more cash in recent weeks because of the lack of support from other companies, said H&M Chief Executive Daniel Ervér.

Earlier this month, H&M announced a new investment in Syre, a startup developing a polyester-fabric recycling process, and pledged to buy $600 million worth of its material over seven years—assuming it achieves commercial production.

Demand for recycled polyester is already established, with material made from recycled bottles already commonly used to make clothes. But textile-to-textile recycled polyester is similar to Circulose in that the technology is untested at scale.

To drive a shift to next-generation materials, other companies need to invest and commit to buying new textiles at scale, Ervér said.

“H&M alone cannot provide the scale that is required,” Ervér said. “The industry needs to commit.”

Renewcell’s plight illustrates the fashion industry’s hesitancy in adopting new materials. PHOTO: HENRIK BODIN/RENEWCELL

FT : EU must wean itself off Russian nuclear fuel, Belgian prime minister says

EU must wean itself off Russian nuclear fuel, Belgian prime minister says
Alexander De Croo urges bloc not to replace one energy dependency for another

The EU must wean itself off Russian nuclear fuel “as fast as possible”, Belgian’s prime minister has said, to stop a renaissance in Europe’s interest for the low-carbon energy inflating Moscow’s war chest.

Alexander De Croo told the Financial Times that Belgium had taken a “180 degree” turn in its attitude to nuclear power, prompted in part by the bloc’s laws aimed at curbing carbon emissions across Europe.

Pressure to meet those targets and a rush to move away from Russian gas has prompted renewed interest in nuclear power in Belgium and other European countries. But with Russia’s enriched uranium making up 30 per cent of EU supply in 2022, there was a risk that the bloc could swap one dependency for another.

“Changing supply chains especially for nuclear is complicated but we need to do it as fast as possible . . . we need to disconnect from Russian nuclear fuel but you need to make sure you can still produce zero emission electricity,” he said.

Belgium decided in December to extend the lifetime of two nuclear reactors that had been scheduled to be closed in 2025. They will now run until 2035 although De Croo said he personally thought their lifetime should be extended by 20 years.

The enthusiasm of the Belgian premier was echoed by leaders from more than 30 countries at the first International Atomic Energy Agency nuclear summit that took place in Brussels on Thursday.

A senior EU official said the nuclear summit was a “reflection of a shift that is happening and it is quite remarkable”.

The renaissance of the once ostracised industry started last year at the UN’s COP 28 climate summit, when 25 countries including Canada, the UK and the US signed a pledge to triple nuclear power by 2050. That marked a comeback after years in the doldrums for atomic energy plans following the 2011 Fukushima meltdown in Japan.

Han Gyu Joo, president of the Korea Atomic Energy Research Institute, said that much of the emphasis at the Brussels summit had been on energy security, adding he’d been surprised to see it hosted by Belgium.

Seth Grae, chair of American Nuclear Society’s International Council, said the difficulty of finding alternatives for Russian enriched uranium was in part due to a lack of investors. “Enrichment capacity is a multibillion-dollar cost . . . we need guaranteed offtake from governments.”

But IAEA director-general Rafael Grossi dismissed pressure for countries to accelerate a move away from Russian fuel.

“Let’s make sure this is not about using nuclear energy as a political pawn,” Grossi told a news conference. “I would warn against this point of good nuclear against bad nuclear, it’s not conducive to what we need to have in the global energy market.”

Hungarian Prime Minister Viktor Orbán, who is EU’s most Russia-friendly leader, name-checked France and Austria, who are working on Hungary’s nuclear plant expansion plans piloted by Russian constructor Rosatom.

“We are happy to note that regardless of geopolitical difficulties a wide range of international, professional and scientific co-operation still exists in the field of nuclear energy,” Orbán said.

Austria, Luxembourg and Germany have been opposed to any EU money going towards nuclear energy fearing that it will take much-needed funding from renewables, although the new government in Luxembourg has recently signalled that it may shift position.

An EU diplomat said that EU funding for nuclear power would be a “Christmas present” to France, home to Europe’s biggest fleet of 56 reactors.

“Each nuclear project spans decades and incurs exorbitant costs, posing a risk of market distortion when EU funds are directed towards such expensive endeavours,” Leonore Gewessler, the Austrian climate minister, told the FT.

De Croo said the summit was not a gathering of “nuclear fanboys”.

“[It] was quite nuanced,” he said, noting that with a history of budget overruns and a looming skills shortage “the industry has quite some promises to deliver on”.

FT : Thiel, Bezos and Zuckerberg join parade of insiders selling tech stocks

Thiel, Bezos and Zuckerberg join parade of insiders selling tech stocks
Bosses sell hundreds of millions of dollars in company shares this quarter in sign that markets may be peaking

Peter Thiel, Jeff Bezos and Mark Zuckerberg are leading a parade of corporate insiders who have sold hundreds of millions of dollars of their companies’ shares this quarter, in a signal that recent stock market exuberance could be peaking.

As markets hit record highs, the ratio of corporate insider selling to insider buying is at the highest level since the first quarter of 2021, according to Verity LLC, which tracks insider trading disclosures.

Stock sales at the beginning of a calendar year are normal, with pent up demand in early 2024 being exacerbated by shareholders avoiding sales last year because of depressed company valuations.

But analysts still said this season’s spree has been surprising and an indicator that a recent tech bull run, fuelled by excitement over the rise of generative artificial intelligence, is about to wane.

“If they think that we’re at the top and so they’re getting out, that’s a rather stark signal to everyone else,” said Charles Elson, a legal veteran and chair of corporate governance at the University of Delaware.


Many of the biggest sales this quarter have come from technology executives. Thiel, co-founder of data analytics group Palantir, sold $175mn this month, according to regulatory disclosures, his biggest sale since offloading $504.8mn of the company’s stock in February 2021.

Amazon founder Bezos sold 50mn shares worth $8.5bn in the ecommerce group in February. Andy Jassy, Amazon’s chief executive, sold $21.1mn of stock this year, compared to $23.6mn in 2023 and 2022 combined.

Zuckerberg, Meta’s chief executive, has sold millions of dollars of the company’s shares for years. But he has increased selling this year as its stock hit all-time highs. In early February, he sold 291,000 shares for $135mn, his first sale of that size since November 2021. He still has 13.5 per cent of the company’s outstanding shares, which makes him its largest shareholder.

“We do view [corporate insider share sales] as a negative data point that investors should be aware of,” said Ben Silverman, Verity’s vice-president of research.

He added that within the technology sector specifically, “we are also seeing a number of the big [company] names in this space with insider selling that is not typical”.

“Clearly there’s an appetite for liquidity generation right now,” Silverman said. “Some of that is some pent-up demand following relatively quiet insider selling in 2022 and 2023, and certainly one impetus is [stock] market performance.”

In one notable case, Snowflake’s Frank Slootman sold $69.2mn in early February, weeks before he announced he would step down as CEO. The database software company’s shares are down about 29 per cent since the day he announced his retirement. Slootman was not a founder of Snowflake but was brought in 2019 to take it public.

“Insider sales by high-level execs of large amounts of stock are never a good sign, it’s quite simple,” said Elson from the University of Delaware. “It means they have found a better place to deploy their assets than the businesses they’re running.”

Amazon declined to comment. Meta, Palantir and Snowflake did not respond to requests for comment.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Medicare Advantage is facing increasing concerns due to higher costs and lower profits

Cover:
-Medicare Advantage, the insurance plans that manage Medicare coverage for over 30 million people, is facing increasing concerns due to higher costs and lower profits. Big players like Humana are reporting falling stocks and this could translate to potential ancillary benefit cuts and denials of service. Other pressures include dropping Advantage plans due to low payments and administrative issues. The federal government is scrutinizing Advantage plans for increasing costs and marketing practices that may be misleading consumers. As cost pressures rise in the Medicare market, consumers face complex decisions over which plan to choose, potentially impacting their finances and health. Over half of the eligible Medicare population is enrolled in Advantage, which provides Part A hospital coverage, Part B outpatient coverage, and extras not offered by traditional Medicare.

Interview:
-Suzanne Franks a money manager at First Eagle Investments, has spent her career studying and buying small-cap stocks, about which there has been plenty of chatter on Wall Street. The inflection point hasn’t come yet, though. The iShares Russell 2000 exchange-traded fund is roughly flat year to date, after rallying late last year on rate-cut expectations, while the S&P 500 index has gained almost 9% in 2024. Franks and her team used the volatility as an opportunity to scoop up bargains. Franks graduated from the University of Chicago Booth School of Business. She founded an independent research firm focused on event-driven investment opportunities, and later spent a decade as part of a small-cap team at Royce Investment Partners. In 2021, the team moved to First Eagle, where she is currently an associate portfolio manager on the $1.8 billion First Eagle Small Cap Opportunity fund, which returned 15% over the past year. Barron’s spoke with Franks by phone in late January and again on March 19 to learn why small companies could finally get a closer look from investors, and which small-caps she favors.

Tech Trader:
-Artificial intelligence has transformed memory chip producer Micron Technology into a thriving growth stock, with the stock currently trading at an all-time high and up 29% year to date. Micron has always been a challenging company to value due to its cutting-edge semiconductor technology, which applies to both DRAM and NAND memory chips used in various electronic devices. However, the memory chip business has complex dynamics, requiring vast and expensive production capacity and extensive R&D. Despite having only a handful of competitors, Micron has experienced a post-Covid downswing, with revenue down 49% to $15.5B in the August 2023 fiscal year. The company's main change is that running artificial intelligence software requires massive amounts of memory, which has led to a decrease in demand and pricing.

The Trader:
-Big Tech stocks like Nvidia, Microsoft, Meta Platforms, Tesla, and Amazon.com have outperformed the market, with the S&P 500 up 2.3% this week. The Federal Reserve's steady rate forecast for three rate cuts in 2024 helped keep the 10-year Treasury yield down to 4.22%. Investors were also excited about artificial intelligence, with Nvidia announcing its new Blackwell chip and Micron Technology's revenue benefiting from its AI business. Broadcom announced a new customer, believed to be ByteDance, and the iShares Semiconductor exchange-traded fund rose nearly 3%. This indicates that investors are looking to buy each minor dip, a vote of confidence in these stocks. Momentum stocks, which have consistently risen without high volatility, should push the S&P 500 higher, as their correlation to the index has been positive in the past couple of months.
-The S&P 500 has become more expensive than the Stoxx Europe 600, trading at 20.7 times the per-share earnings its component companies are expected to bring in over the coming 12 months. The gains are driven by expectations that the economy will continue to grow, bringing higher corporate profits. Investors are betting the Federal Reserve will beat inflation without steering the economy into a recession and can soon begin to lower interest rates. However, current equity valuations are likely too expensive, as the 11 rate increases the Fed has rolled out since March 2022 make bonds more appealing investments. The yield on 10-year Treasury debt is now about 4.29%, while the earnings S&P 500 companies are expected to generate over the coming year amount to about 4.8% of the index price.

Features:
-Boeing CFO Brian West has shattered Wall Street's free cash flow expectations for 2024, but shares rose 3.5%. The company's plans to hit $10B in annual free cash flow by 2025 or 2026 are still intact, but they need to invest in a new medium-size aircraft. The debate about Boeing's next single-aisle jet has raged since 2015, when the company considered replacing the 757 jet. Current CEO Dave Calhoun killed off the idea in November 2022, stating that he didn't want to fill a gap in a product line. He wanted to wait until engine, manufacturing, and materials technologies imply that level of gain before spending the money. Boeing has a significant hole in its product line that needs plugging, as the A321neo has taken a lion's share of the market for single-aisle planes that carry more than 200 passengers. The A321neo can fit up to 244 people, while the 757 could carry 290 passengers in certain configurations.
-Digital World Acquisition Corp. has approved a merger with Trump's Truth Social media platform, resulting in nearly $3B in paper gains. Trump owns 60% of Trump Media & Technology Group, which runs Truth Social. The deal has caused legal drama between Trump and ARC Global Investments II, a firm that would own about 10.8M shares. With the deal approved, Trump would control 78.75M shares of the new combined company, trading under the ticker symbol DJT on Nasdaq. The timing of Trump's access to the proceeds is unclear. The deal has seen Digital World stock surge 111% this year.

Europe:
-The Swiss National Bank has unexpectedly cut its interest rate, marking the first major economy to lower rates since the Covid-19 pandemic. This move highlights the side effect of monetary policy, as raising interest rates strengthens a currency by making investments more attractive, while lowering rates weakens it. The SNB's unexpected cut led to the Swiss franc falling almost 2% against the dollar and almost 1% against the euro, the currency used by the country's most important trading partners. The franc's drop makes Switzerland an example for other countries considering a jolt in economic activity, as long as inflation rates continue to fall.

Emerging Markets:
-Bondholders are supporting Javier Milei's radical reforms as Argentina's president wraps up his first 100 days. Benchmark 2030 bonds have risen to 50 cents on the dollar, while Argentine legislators are less enthused. The Senate voted down Milei's Decree of Necessity and Urgency 42-25, and the Chamber of Deputies is likely to follow suit, killing the president's Plan A for overhauling the country's economy. Investors applaud Milei's unilateral actions, such as slashing fuel subsidies and reducing the peso's official exchange rate. Argentina reached a primary budget surplus in January and February for the first time since 2011, and inflation has halved to a 13% monthly rate. However, lawmakers are focused on poverty, which has soared from 40% to 60% in Argentina since last autumn.

Commodities:
-Anglo American, a leading global mining company, has seen its stock drop by 24% over the past year, trailing larger peers like Glencore and BHP Group. The company faces operational problems and tough conditions in key markets, including diamonds, which led to a disappointing multiyear production outlook. However, Anglo American's future looks bright, with metals prices improving and the company vowing to cut costs, improve operations, and review its businesses, including a capital-intensive fertilizer project in the UK. CEO Duncan Wanblad has stated that nothing is off the table, and a potential sale of the $30B company could be a viable option.

Streetwise:
-Zillow.com, a website where homeowners can check their house's Zestimate, has a business model where realtors, builders, and landlords pay to advertise listings. The company views itself as a "housing super app" with expanding services for sellers. Last year, Zillow had free cash flow of $189M on revenue of $1.95B, with revenue falling modestly on declines related to houses and mortgages, offset by sharp rental gains. Zillow's financial results are uncertain, as last year's home sales were the lowest in nearly 30 years. However, February home sales rose 9.5%, marking the first two consecutive months of gains in more than two years. The 30-year mortgage rate has drifted lower since peaking near 7.8% in October, and there's talk of interest-rate cuts later this year. Wall Street predicts a 12% revenue increase for Zillow this year, with free cash flow swelling to $320M.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-At least 60 people died and over 100 were injured in a terrorist attack on a concert venue in Moscow, where a band called Picnic was due to perform. The attack, which took place at the Crocus City Hall, was the largest loss of life in a terrorist attack in Russia in at least a decade and recalled the Islamist insurgencies that marked the first decade of President Vladimir Putin's rule. Russia's Investigative Committee reported that over 60 people died in the attack, and a search is ongoing for the attackers. The Kremlin has heard reports from the heads of four Russian security agencies on the investigation.
-Microsoft has hired two founders of Inflection, a US-based AI start-up, and many of its 70 employees to oversee Microsoft AI. The move follows Microsoft's $13B investment in OpenAI and a partnership with France's Mistral. Microsoft's hiring spree demonstrates its intent to ally with ambitious AI start-ups and command the market. The company's hyperactivity and investor hype about AI have helped it re-emerge as the world's most valuable public company, with a market value of $3.1T, more than all companies listed on London's FTSE 100 index combined.
-Donald Trump's social media business, Trump Media & Technology Group, will be publicly listed on the NASDAQ exchange next week, potentially generating a $3B windfall for him. The decision comes as Trump faces mounting legal bills ahead of the most expensive election campaign in US history. He has been struggling to raise nearly $500M to prevent assets from being seized. Trump is subject to a lock-up agreement that prevents him from selling his shares for six months, but may use his stake as collateral to borrow money.
-US senators reached a late agreement to avoid a partial government shutdown over a $1.2T spending bill, preventing a budget stand-off that could lead to the closure of non-essential federal agencies. The Senate majority leader, Chuck Schumer, announced the deal before midnight. The White House welcomed the progress, stating it had stopped shutdown preparations due to confidence in Congress passing the necessary appropriations. However, the House approved the spending bill with broad bipartisan support, triggering backlash from Republican allies who objected to the compromise.
-Iceland is aiming to prioritize food security over financial gain, planting corn, and curbing bitcoin miners as the country seeks self-sufficiency in a hostile world. Prime Minister Katrín Jakobsdóttir believes recent protests by European farmers and disruptions in trade have led to a need to reduce reliance on imports. She also plans to reallocate precious renewable electricity from data centers to housing and other industries, prioritizing the energy needs of Iceland's 375,000 citizens.
-Russia and China vetoed a US resolution calling for an immediate ceasefire in Gaza at the UN Security Council, blocking Washington's attempt to distance itself from Israel's Hamas war. Moscow and Beijing's decision reveals the US's diplomatic difficulties at the UN, where it traditionally uses its Security Council veto rights to protect Israel. Moscow's ambassador to the UN, Vassilily Nebenzia, criticized the initiative as "hypocritical" and an instrument for Washington's Middle East policy.
-Germany and France have reached a "breakthrough" on plans for a joint tank, marking a sign of mending Franco-German ties. The talks took place in Berlin, amid tensions between French President Emmanuel Macron and German chancellor Olaf Scholz over weapons deliveries to Kyiv and funding for European defense. Scholz has opposed Macron's idea of issuing euro bonds to fund arms makers in Europe and the French president's suggestion to send ground troops to fight in Ukraine. The talks showed that both countries are in the same boat and know their desired direction. The breakthrough is seen as an expression of the significance, strength, and opportunities of Franco-German co-operation and friendship.
-Marjorie Taylor Greene, a hardline Republican congresswoman and close ally of Donald Trump, has launched a bid to remove Mike Johnson as Speaker of the House of Representatives amid chaos in the party's slim majority. Greene said Johnson had filed a motion to vacate as a warning about her push to remove him from office. Greene's move was triggered by a House vote to approve a budget for the federal government until the end of the fiscal year in September. Greene and other Republicans have criticized the compromise with Democrats, arguing it would entrench high spending levels.
-UN secretary-general António Guterres confirmed that all seven members of Haiti's transitional presidential council have been nominated, announcing the appointment of a temporary government to replace Prime Minister Ariel Henry and arranging elections. Meanwhile, police have claimed a rare success in their war against gangs, killing Ernst Julme, head of the Delmas 95 gang. Haiti, the poorest nation in the Americas, has been grappling with worsening violence and poverty since the assassination of President Jovenel Moïse in 2021.

THE NEW YORK TIMES
-The Islamic State-Khorasan branch claimed responsibility for a Moscow attack that killed at least 60 people and injured 100 others. The US collected intelligence in March that ISIS-K, based in Afghanistan, had been planning an attack on Moscow. The group has been trying to increase its external attacks, but most of these plots in Europe have been thwarted, indicating diminished capabilities. ISIS-K has been fixated on Russia for the past two years, frequently criticizing President Vladimir V. Putin and accusing the Kremlin of having Muslim blood. (Note, Russian and other international sources have vehemently rejected the ISIS link to the attack as fake news).
-The Senate approved a $1.2T spending bill to fund over half of the US government, averting a shutdown by sending the legislation to President Biden just hours after a midnight deadline. The 74-to-24 vote capped an extraordinary day on Capitol Hill, which began with a bipartisan vote to speed the measure through the House. The Senate action came more than 12 hours after the House vote, after intense haggling to arrange politically charged votes on proposed changes to the legislation. The delay underscores the difficulties in spending negotiations and is a fitting coda to an excruciating set of talks to fund the government through the end of the fiscal year, Sept. 30, six months behind schedule.
-Alaska Airlines passengers who made an emergency landing after a fuselage panel blew off this year have received letters from the FBI identifying them as possible victims of a crime. The letters are a sign that a criminal investigation into Boeing, the manufacturer of the 737 Max 9 jet, is ramping up. The panel, carrying 171 passengers and six crew members, blew off at an altitude of 16,000 feet shortly after the plane left Portland, Oregon, airport in early January. The National Transportation Safety Board said the panel, known as a door plug, was missing four bolts meant to secure it in place.
-Narendra Modi, the Indian prime minister, has been attempting to transform India into a monolith dominated by his Hindu nationalist vision. While the media, legislature, and courts have been largely shaped by his will, some of India's richest states remain critical holdouts. The future of the world's largest democracy and its economic trajectory may depend on the power struggle that has ensued. Modi is expected to win a third term in the national election on April 19.
-Senator Sherrod Brown, a Democrat from Ohio, faces a tough campaign in 2024 due to a Republican Party determined to win his seat and a Democratic president hanging off him. Brown, who has won his seat in 2006, 2012, and 2018, has a strong message of fighting for Ohioans and believes he can win in a state that is a little more Republican. He has been elected Ohio's secretary of state in 1982 and has a casual confidence that he can win again in firmly red Ohio, where he is the last Democrat holding statewide office.
-Chicago voters rejected an increase to the city's transfer tax on high-value properties in a referendum, leaving unfulfilled a long-time goal of Mayor Brandon Johnson and progressive Democrats. Real estate groups warned that the new rates would have been catastrophic to the downtown office market, which was already losing value and struggling with vacancies. The vote came at an uncertain political moment in Chicago, a Democrat-dominated city where homelessness has become more visible since the pandemic and an influx of migrants has strained resources.

THE NEW YORK POST
-United Airlines has announced that US safety regulators will increase scrutiny of the airline following a series of safety incidents. The Federal Aviation Administration (FAA) will be more present in the company's operations over the next few weeks as they review work processes, manuals, and facilities. The Chicago-based airline has experienced several emergencies in the past two weeks, including an external panel missing from a United aircraft in Oregon, a fuel leak during takeoff, and a Boeing 777-200 losing a tire after takeoff from San Francisco. The incidents have prompted the airline to pause and evaluate potential changes to make it safer.
-Bentley's (part of VW Group) CEO, Adrian Hallmark, has announced that the luxury carmaker's sales slumped 11% in 2023, the first decline after four consecutive years of growth. Hallmark blamed the emotional sensitivity among wealthy customers for the decline, stating that despite customers being able to afford Bentley cars, demand was slowed down due to emotional sensitivity. Bentley will no longer have Hallmark at the helm and will move on to run rival luxury brand Aston Martin, effective October 1. Bentley also attributed the drop in sales to high-earning customers being worried about the possible gaucheness of being seen in a Bentley if friends, family, or employees are facing increased economic hardship. Customers are also sensitive to changes in interest rates, which raise their payments when they receive a quote to change the car.

WWD : Hermès U.S. President Diane Mahady on the Growing Home Category

Hermès U.S. President Diane Mahady on the Growing Home Category
The luxury house took over an L.A. airport hanger Thursday for an immersive Hermès Parade home goods event.

Hermès took over a Santa Monica airport hanger Thursday night to stage an immersive event celebrating its home goods business, which is soaring in the West Coast market and beyond as the brand continues to defy the slowdown in luxury spending.

The vibe at Hermès Parade was avant-garde Cirque du Soleil meets the Paris runway, with 50 acrobats dressed in blue boiler suits parading porcelain plates, leather globes and “H” pillows, twirling occasional tables, sashaying with wicker waste baskets, and dancing en pointe on the backs of Taurillon couches that cost as much as some homes.

The event was a movable feast of crates, platforms and furniture that pushed the crowd to different vignettes in the space, from a ballet performed under an installation of Hermès blankets hanging from the ceiling over an Hermès bed, to a group chair dancing.

Guests — actors, influencers, clients and interior designers, including Chloe Fineman, John C. Reilly, Casey Affleck, Pamela Shamshiri, Ariana Lambert Smeraldo, Ramya Giangola, Aimee Song, Adam Goldston and Marianna Hewitt — sipped Champagne and soaked it in with their camera phones.

There was chatter among guests about the tantalizing Hermès lawsuit filed in California by two customers suing over access to Birkin bags, alleging that the process to qualify violates antitrust laws. But the elephant in the room was a no-comment from the company executives in town to talk up the home category.

“Maison is really resonating with our clients,” said Hermès U.S. president Diane Mahady in an interview earlier in the day at the Rodeo Drive store, which has an entire floor dedicated to home. “We continue to invest in it both in the real estate in stores, the larger spaces to present the metier, and events like this one to raise visibility. Because it’s surprising, other clients don’t realize we have Maison, so there’s a lot of opportunity. Usually they buy one thing, and get pretty excited. It’s an important metier we will keep investing in.”

Hermès has had a love affair with Southern California of late, signaling how bullish it is on the market, with celebrations for the opening of a new store in Westfield Topanga, the cinematic Pegasus-inspired experience at Barker Hangar last year, as well as the opening of a one-night-only Blue Horse restaurant to fete the renovation of the South Coast Plaza store in 2022.

Southern Californians “want to be involved in the Hermès lifestyle….Porcelain is very strong, we’ve had instances where a client buys it for one home and they like it so much they want it for another home or a boat or a plane,” Mahady said. “We have collectors and very limited quantities, so we have people who are anxious when pieces come out…our allocation for the U.S. may be four or five pieces.”

The Hermès home business ranges from entry-level $210 coffee mugs (which may be among the most affordable items the luxury house makes) to $142,000 leather sofas with Canaletto walnut frames, cane side panel and storage compartments.

“We offer a full universe, all categories more or less — textiles, objects, furniture, lighting and porcelain, which is a point of differentiation compared to others…and that gives a lot of credibility to our positioning. We’re not a gift items metier; we propose an Hermès way of life,” said Anne-Sarah Panhard, managing director of Hermès Maison and president of the silversmiths Puiforcat, a subsidiary of Hermès since 1993.

While the house of Hermès is nearly 200 years old, Maison is 100 years old, tracing its roots back to the dawn of the automobile age in the 1920s, when cars were open-air. “It was cold, so we first started with blankets, and ashtrays also, in between the two-seat cars, with a specific design that fixed properly,” Panhard said.

The category grew quietly for years. Furniture began with a collaboration in the 1930s with Jean-Michel Frank, and porcelain production was vertically integrated in 1984. But the launch of the wider collection of home and lighting wasn’t until 2011.

It coincided with Hermès opening its Rue de Sevres boutique on the Left Bank in Paris, a concept store that felt like a bellwether for the brand’s development, more fully displaying the breadth and whimsy of its growing categories and renewed colorful, modern aesthetic.

“We have some strong links from one metier to the next,” said Panhold, pointing out that Maison plays with some of the functional hardware that appears on fashion and accessories, but that there are also things popular in the Hermès Maison world, like the blanket stitching, that are copied by other ready-to-wear brands not its own.

The furniture category consists of archetypical dining room tables and chairs, she said, as well as more unique pieces such as the Pippa lounge chair with natural maple wood frame and braided lacing on the seat. Smaller accent pieces between accessories and easy-to-carry items go along with the Hermès Nomad way of life, including Les Trotteuses d’Hermès occasional table with folding solid oak legs, bridle leather straps and a porcelain tray.

Then there are novelties — for the person who has everything — such as a $276,000 blue lacquer pool table, a $17,200 leather marquetry jewelry box depicting a modern Mexico-inspired scene, an exquisite $16,100 wicker picnic basket and a $940 tissue box cover.

One of the most in-demand items is a $27,000 Hermès leather globe.

“It’s difficult the pairing of each piece of leather, 15 or 20 pieces you have to put together. That work is very specific,” Panhold said. “We had only one craftsman who could do it, but now we have two. We are selling 300 a year — and it’s not enough.”

While the classic Hermès H blankets have long been collectors’ items, draped on sofas and chairs in the most stylish (and photographed) homes, and still remain a large part of the business, the textile division has diversified, incorporating hand-embroidery done in India, hand-stitching done in Nepal, and prints made in Italy.

“There are so many techniques people don’t realize until they come in,” Mahady said of the work in textiles, the largest category overall.

Porcelain and tableware are the biggest on the West Coast, and Hermès has at least one new collection coming out every year, some classic and some contemporary. “It’s a lot of R&D and expertise,” said Panhard, pointing to the tropical Pacifolia pattern that requires 21 steps to make, and adding that all the product development is done from scratch internally.

The Maison collection is represented in every store, but the Rodeo Drive location has a wider selection than most. “In general, most stores are getting bigger for Hermès because that’s the strategy when we renovate and open new stores, so more and more we have a large space for Maison,” Panhold said.

Production is done all over, but primarily in the Como area of Italy and in France, where there is a facility for porcelain near Limoges. “We go where we find the best know-how. The best lacquer is in Vietnam, the best exotic woods and wood work is in Geneva so we go there, the best embroidery we go to India, but still 80 to 90 percent is done in Italy and France,” said Panhold, adding that there are more than 400 artisans working on porcelain alone. “We’ve grown faster than our competitors in recent years,” she said.

She still sees opportunities for growth, though not necessarily in fabric, which Hermès had before but stopped. “Strategically, we like to have finished product and when you do fabric you don’t know what people do with it, and it ended up we had some skirts,” Panhold said. “I think we have many more things to do which align with what Hermès stands for which is function and aesthetics, so we have many more territories to explore and also materials.”

Outdoor furniture? “We’re thinking strongly about it,” she said.

WWD : Valentino, Pierpaolo Piccioli Parting Ways

Valentino, Pierpaolo Piccioli Parting Ways
Piccioli was named sole creative director in July 2016, after sharing the title with Maria Grazia Chiuri since 2008, a decade after joining the Rome-based couture house in 1999 in charge of accessories.

MILAN — Valentino and Pierpaolo Piccioli are parting ways, according to market sources.

Responding to WWD, Valentino issued the following:

“I am grateful to Pierpaolo for his role as creative director and for his vision, commitment and creativity that have brought the Maison Valentino to what it stands for today,” said chief executive officer Jacopo Venturini.

“We extend our deepest gratitude to Pierpaolo for writing an important chapter in the history of the Maison Valentino. His contribution over the past 25 years will leave an indelible mark,” said Rachid Mohamed Rachid, chairman of Valentino.

Piccioli said: “Not all stories have a beginning or an end, some live a kind of eternal present that shines so bright that it won’t produce any shadows. I’ve been in this company for 25 years, and for 25 years I’ve existed and I’ve lived with the people who have woven the weaves of this beautiful story that is mine and ours.

“Everything existed and exists thanks to the people I met, with whom I worked, with whom I shared dreams and created beauty, with whom I built something that belongs to all, and that remains immutable and tangible. This heritage of love, dreams, beauty and humanity, I carry it with me, today and forever.

“This is the beauty that we have created: life, hope, opportunity and gratitude, and my people, my heart and the love that gives you all the possibilities of the world, especially those that you could not imagine alone. Thanks to Mr. Valentino and Giancarlo Giammetti who have blessed me with their trust, thanks to every single person who made this possible in one way or another, it was a privilege and an honor to share my journey, and my dreams, with you.”

A new creative organization for the house will be revealed soon.

Piccioli was named sole creative director of Valentino in July 2016, following the departure of Maria Grazia Chiuri to join Dior.

Chiuri and Piccioli first worked together at Fendi for 10 years. Valentino Garavani in 1999 selected the designers to boost his brand’s accessories category, which they did, rejuvenating that division. They were promoted to creative directors of accessories at Valentino when Alessandra Facchinetti was assigned the same title for ready-to-wear after Garavani retired in 2007. In 2008, they succeeded Facchinetti as creative directors of the brand.

While highly respectful of Garavani and the heritage of Valentino — in particular emphasizing the brand’s couture — Piccioli embraced a more diverse and inclusive approach, distancing himself from the rarefied and jet-set days of yore. In his understated manner, Piccioli continued to live in Nettuno, Italy, a beach town 44 miles south of Rome where he was born, where he met his wife, Simona, and where they are raising their three children. He has said for years that he also considers Valentino his home and has again and again taken the opportunity to pay tribute to the talent of the seamstresses who have long worked for the company — highlighting the exquisite craftsmanship of Valentino’s atelier.

At the same time, he has brought a younger spirit to the maison with a new perspective, for example choosing as Di.Vas brand ambassadors, an acronym that stands for Different Values, Formula 1 champion Lewis Hamilton or Suga, the much-loved member of the boy band BTS. Piccioli telegraphed his message of inclusivity by going contrary to Roman stereotypes, casting Adut Akech and Anwar Hadid for the Valentino Born in Roma fragrance.

With his influential designs, he introduced daring volumes and colors — including the PP Pink new Pantone shade — developing more daywear looks and dabbling with streetwear. His attention to detail was exemplified, for example, by his careful study of the white shirt for Valentino’s spring 2019 ready-to-wear collection.

While still fresh, speculation is that Valentino’s owner, Mayhoola, could be eyeing Alessandro Michele or even Chiuri as a potential successor.

In July last year, Kering revealed it bought a 30 percent stake in Valentino for 1.7 billion euros in cash as part of a broader strategic partnership with Qatari investment fund Mayhoola, which controls the couture brand. For this reason, Michele returning to work for Kering after his abrupt departure from Gucci may seem a stretch.

Kering has an option to buy 100 percent of Valentino’s capital by 2028, while Mayhoola could become a shareholder in Kering. The new luxury partners are expected to jointly explore further opportunities aligned with their respective strategies, including potential investments beyond fashion.

As per the latest figures available, a rebalancing of its retail and wholesale channels contributed to Valentino’s gains in revenues and profits in 2022. Sales reached 1.42 billion euros, climbing 15 percent compared with 1.23 billion euros in 2021. At constant exchange, revenues rose 10 percent.

Changes are taking place throughout Mayhoola, as earlier this week Balmain, also controlled by the Qatar-based fund, said CEO Jean-Jacques Guével was stepping down from the role after four years “to pursue other interests.” Guével’s next move could not immediately be learned, and his successor has yet to be named.

CrunchBAse : The Week’s 10 Biggest Funding Rounds: Wonder Delivers Largest Round

The Week’s 10 Biggest Funding Rounds: Wonder Delivers Largest Round Of Week

The week was slightly slower for huge rounds compared to previous ones, but half of the funding deals broke the $100 million mark. However, it still was not all that bad for big rounds, especially considering the huge $700 million raised by a food delivery company.

1. Wonder, $700M, food delivery: Marc Lore’s food delivery startup Wonder is back on this list again after making it last November and in June 2022. Wonder raised a whopping $700 million in its latest round. Investors in the deal — which was reportedly raised as a simple agreement for future equity, which has no valuation set — included NEA, GV, Accel and Bain Capital Ventures, among others. Lore himself reportedly invested $100 million. The company aims to open 100 more locations over the next two years. It currently has 11 locations in the New York City area that offer takeout and delivery from several restaurants cooked in a single kitchen. The New York-based firm has been pretty busy of late. In September, Wonder acquired meal-kit company Blue Apron for $103 million. Founded in 2018, Wonder has raised nearly $1.8 billion, per Crunchbase.

2. Mirador Therapeutics, $400M, biotech: More big biotech raises this week. The biggest was for San Diego-based Mirador, which launched with a $400 million Series A funding led by Arch Venture Partners. The company was founded by CEO Mark McKenna and executives from Prometheus Biosciences, which was acquired by Merck in 2023. With breakthroughs in genetics and machine learning, the company is focused on precision medicine for chronic inflammation and fibrotic disease.

3. Capstan Therapeutics, $175M, biotech: Capstan Therapeutics raised a $175 million Series B led by RA Capital Management. The San Diego-based biotechnology company focuses on vivo reprogramming of cells through RNA delivery to combat autoimmune disorders. Founded in 2021, the company says it has raised $340 million.

4. Engrail Therapeutics, $157M, biotech: Anxiety, depression and post-traumatic stress disorder are serious diseases in which therapies can be somewhat limited. Engrail Therapeutics locked up a fresh $157 million Series B co-led by new investors F-Prime Capital, Forbion and Norwest Venture Partners to help expand offerings to combat those problems. The San Diego-based biotech startup focuses on neuropsychiatric and neurodevelopmental diseases and will use the fresh cash to advance its pipeline through clinical development. Since being founded in 2019, Engrail has raised over $220 million, per the company.

5. Clasp Therapeutics, $150M, biotech: Clasp Therapeutics is the next biotech to raise huge. The Cambridge, Massachusetts-based startup is developing T cell engagers tailored to each patient’s immune system to target tumors. The company launched this week with a $150 million financing led by Catalio Capital Management, Third Rock Ventures and Novo Holdings.

6. Foundry, $80M, cloud: While AI may be dominating business, the amount of compute available and its cost are still a hindrance to many. Foundry locked up $80 million — at a reported $350 million valuation — and came out of stealth this week to help with that. The Palo Alto, California-based startup unveiled its public cloud purpose-built for ML workloads. The company says its mission is to “ensure humanity maximizes the utility of the computing power we already have, and will produce.” The newly announced round was co-led by Sequoia Capital and Lightspeed Venture Partners.

7. (tied) BigID, $60M, cybersecurity: New York-based data privacy startup BigID raised a $60 million round led by Riverwood Capital. Founded in 2016, BigID has raised $320 million, per the company.

7. (tied) Figure Markets, $60M, fintech: San Francisco-based Figure Markets, a platform where investors can trade a wide range of blockchain-native assets, raised a more than $60 million Series A led by Jump Crypto, Pantera Capital and Lightspeed Faction. It was the company’s first announced round.

9. Succinct, $55M, Web3: San Francisco-based Succinct raised $55 million across a seed and Series A funding led by crypto investor Paradigm. Founded in 2022, the company builds open-source infrastructure for blockchain applications.

10. Hippocratic AI, $53M, healthcare: Palo Alto, California-based AI healthcare agent developer Hippocratic AI raised a $53 million Series A co-led by PremjiInvest and General Catalyst. Founded in 2022, the company has raised $118 million, per Crunchbase.

Big global deals
The U.S. dominated in terms of big rounds this week. The biggest round outside the U.S. barely broke $100 million.
  • Germany-based Solaris, an embedded finance platform, raised a Series F worth approximately $104 million

WSJ : These Startups Wanted to Be the Next Tesla. Will They Survive the EV Slowd

These Startups Wanted to Be the Next Tesla. Will They Survive the EV Slowdown?
Small, money-losing electric-vehicle makers are running down their batteries

In the electric-vehicle race, it’s increasingly clear that not every competitor will make it to the finish line.

Companies like Rivian Automotive, Lucid Group LCID -3.15%decrease; red down pointing triangle and Fisker FSR -4.22%decrease; red down pointing triangle are burning through their cash reserves as they spend heavily on expanding factory production and sales—all while losing money on every vehicle they sell.

For consumers, the increased competition translates into steep discounts on some of the flashiest electric-powered vehicles. But for EV automakers, a slowdown in demand starts the clock that might determine how long they can keep the lights on.

Many of these companies first unveiled a lineup of innovative battery-powered cars and SUVs in 2018 and 2019, following Tesla’s pioneering success in the new market. It seemed like an army of upstarts was poised to supplant stodgy giants such as Ford Motor and Toyota as the next household name in the industry.

Electric cars were just starting to break into the mainstream, and sales of Tesla’s popular Model 3 sedan were taking off.

These young companies went public at stratospheric valuations, even though many had no revenue and little experience building a car. Investors, analysts and ordinary shoppers believed EV makers could emulate Tesla’s success in disrupting the traditional car market. Rivian’s market value briefly surged higher than that of Ford or General Motors.

Now, these companies are fighting to stay afloat amid stiff competition. Sales of battery-powered cars and trucks have been weaker than expected in the U.S., leading companies from Ford to Tesla to slash prices in an attempt to jump-start demand. Too few buyers have been willing to make the switch to fully electric vehicles, worried about the relatively high sticker prices, still-nascent charging infrastructure and the long-term reliability of EVs. Money-losing startups are pulling back on spending and delaying investments as they seek to conserve their remaining cash.

Some, like electric-pickup maker Lordstown Motors and battery-powered van company Arrival, have already filed for bankruptcy, and others are producing only a trickle of vehicles.

These carmakers that went public in an era of low interest rates and rising buzz around electric vehicles now have to prove they can withstand tougher conditions. They say they are focused on stabilizing their cash-bleeding operations, but not all of them may be able to weather the storm.

Here’s our guide on who could survive the battle of the fittest, using battery icons* to signify financial health.

Vehicle Lineup: Rivian currently sells the R1T pickup and R1S SUV, which start at $69,900 and $74,900, respectively. The company also builds an electric commercial van for Amazon.com.

Sales Pitch: Often compared to the clothing brand Patagonia, Rivian targets affluent, climate-conscious adventure seekers. Company founder RJ Scaringe has said he wanted to build an electric pickup because it is the most popular type of vehicle sold in the U.S.

How It Got Started: Scaringe, an avid outdoors lover, started the company in 2009, mortgaging his home for startup funds. Rivian raised billions privately from investors such as Amazon and Ford before going public in one of the most lucrative IPOs of the past decade. The company purchased a former Mitsubishi Motors factory in Normal, Ill., in 2017 to build its first vehicles.

Quirks of the Vehicles: Rivian’s vehicles have features meant to be useful off the beaten track, such as “camp mode” that levels the vehicle on an incline for comfortable in-car camping and a portable speaker stowed under the center console.

What Happened: Supply-chain logjams and problems getting parts to the assembly line meant that Rivian struggled to operate its factory at maximum capacity. The manufacturing challenges contributed to the company burning around $1.5 billion a quarter. The company also had to redesign key parts of its vehicles in an attempt to bring production costs down. While Rivian was able to overcome many of the logistics snarls holding up its factory output, the company is now warning of weaker demand for its models.

Where Are They Now? Rivian is still losing money each quarter and faces immediate challenges in meeting its goal of generating gross profit by the end of the year. The carmaker loses tens of thousands on every vehicle it sells, but executives say those losses are expected to decline this year. Rivian said it plans to build roughly the same number of vehicles this year as last.

Ultimately, Rivian aims to become one of the world’s largest carmakers. The first step in that plan is a new, $45,000 SUV called the R2, which it unveiled this month and is to go on sale in 2026. The company says this model is key to transforming into a profitable EV maker.

Vehicle Lineup: Lucid currently sells one model, the Air sedan, which ranges in price from the $69,900 Air Pure to the $249,000 Air Sapphire. An SUV, called the Gravity, is due to go on sale later this year.

Sales Pitch: Lucid sold investors on a plan to build high-end battery-powered vehicles, fueled by what it calls “the best electric-vehicle technology.” The company’s battery and electric-motor technology allow it to squeeze out more mileage than its competitors. Even the cheapest version of Lucid’s Air sedan can travel 410 miles on a single charge, around 100 miles farther than most electric vehicles available in the U.S.

How It Got Started: Lucid started life at a battery venture called Atieva. That company’s founders in 2013 hired Peter Rawlinson, a former Tesla executive, who was brought in to help Atieva pivot to car manufacturing. In 2016, Atieva changed its name and Lucid was born. When the company started to run out of cash in 2018, a $1 billion investment from the Saudi Arabia Public Investment Fund saved it. Rawlinson became chief executive in 2019.

What Happened: At first, Lucid appeared to have a deep well of demand, reporting more than 25,000 reservations for the Air in early 2022. With a factory in Casa Grande, Ariz., Lucid seemed both well-funded and well-prepared. Instead, sales have been relatively flat since the second half of 2022. Lucid began flagging slower demand for the Air last February—sooner than other startups on this list. In response, the company has been spending more on marketing and cutting prices to help boost demand.

Where Are They Now? Lucid’s newest factory in Saudi Arabia is currently assembling vehicles as part of a deal to sell at least 50,000 to that country’s government. The company is also slated to start production of the Gravity this year. Company executives say the vehicle will appeal to a wider audience, because SUVs outsell sedans three-to-one in the U.S. Lucid also says it is preparing to broaden its lineup further in 2026, when it plans to launch a new, more affordable midsize vehicle.

Fisker’s Sales Pitch: Fisker has taken a different approach than other startups, employing what it calls an asset-light business model. Rather than building the cars itself, it contracts that work out to an outside company. That way it doesn’t have to own a factory itself or employ a manufacturing workforce.

How It Got Started: This is the second electric-car startup started by former BMW and Aston Martin car designer Henrik Fisker, who is also CEO. His first company, Fisker Automotive, sold a $100,000 plug-in hybrid called the Fisker Karma, but it went bankrupt in 2013 after 300 vehicles were destroyed in a hurricane and its battery supplier went out of business.

Four Unique Features: “Each Fisker has to have at least four unique features that have to be either best-in-class or something nobody else has,” says the Fisker CEO. The features include the Fisker Ocean’s “California mode,” which opens every glass panel, except the windshield, and a small foldout shelf dubbed the taco tray. The company’s forthcoming Alaska pickup truck has a “cowboy hat holder” and “the world’s largest cup holder.”

What Happened: Fisker only started delivering vehicles to customers halfway through 2023 after missing self-imposed deadlines. The company says it ran into delays securing parts and regulatory approval. As a result, it slashed its production outlook twice last year, but ultimately fell short of even its reduced goals.

Where Are They Now? Fisker warned at the end of February that it risked running out of cash this year. As of mid-March, the company had nearly 5,000 unsold vehicles and its cash reserves had dwindled to $89 million. Fisker says it is raising $150 million in fresh funds from an investor and is negotiating with a large carmaker for another investment. Fisker has hired restructuring advisers to help prepare for a potential bankruptcy filing, according to people familiar with the matter.

Vehicle Lineup: The carmaker sells three models: the $49,200 Polestar 2 sedan, $73,400 Polestar 3 SUV and approximately $60,000 Polestar 4 SUV.

Sales Pitch: Like Fisker, Polestar doesn’t own manufacturing facilities, and instead contracts to have its vehicles built at other companies’ factories in China, South Korea and the U.S. Unlike most electric-car makers, Polestar says it doesn’t want to make a mass-market EV. Instead, the company pitches itself as a sportier alternative to Volvo.

How It Got Started: Volvo Car and its Chinese parent, Geely, created Polestar as an EV-only brand in 2017. The company started by selling a hybrid, the Polestar 1, before launching the fully electric Polestar 2 in 2020.

Quirk: Polestar vehicles bear more than a passing resemblance to electric vehicles made by Volvo. That may not be surprising given that the CEO, finance chief, operations head and lead designer are all former Volvo executives.

What happened: Polestar appeared to have the smoothest launch of any of the current crop of EV startups. It has built over 100,000 vehicles since starting production and has even turned a profit in some quarters. But Polestar has faced slowing demand for its Polestar 2 sedan and the launch of its Polestar 3 SUV was delayed after Volvo ran into software development issues. The company has slashed its production outlook and Volvo said last month that it will sell the majority of its 48% stake in Polestar.

Where Are They Now? Polestar’s finances are now stable after raising nearly $1 billion in debt last month. Production of the Polestar 3 has started in China, and a U.S. plant is due to start producing the vehicle later this year. Polestar’s chief financial officer says the company is targeting a double-digit gross margin by the end of 2024. The company says the U.S. launch of the Polestar 3 SUV this year will help boost sales.

How It Got Started: VinFast was created in 2017 by Pham Nhat Vuong, the billionaire owner of Vietnamese conglomerate Vingroup, which operates a diverse array of businesses from hospitals to theme parks. VinFast built a massive $1.5 billion factory east of Hanoi, which the company has said will be capable of producing nearly a million vehicles a year by 2026.

VinFast’s Sales Pitch: VinFast aims to compete with Chinese EV startups like BYD and NIO, and says that building cars in Vietnam means its labor costs are even lower than those of Chinese competitors. The company is expanding across Southeast Asia and in India, while also aiming to increase its sales in the U.S.

Quirk: Early buyers in the U.S. were offered free stays in one of Vingroup’s resorts in Vietnam. People who buy a home in Vietnam from the company’s property arm may also get a free car as part of the deal.

What Happened? VinFast tried an innovative pricing strategy in which it sold cars to customers but rented the lithium-ion batteries that power the vehicles separately. The company said the plan allowed customers to pay less upfront for VinFast vehicles, but ended up ditching the plan in the U.S. for now, because customers found it confusing. Ultimately, VinFast only delivered a little over 3,000 vehicles to U.S. customers last year, according to Motor Intelligence.

The company also had a rocky debut on Wall Street. Initially, its share price skyrocketed, briefly making VinFast more valuable than Ford or GM, in part because only a small percentage of the company’s shares were available for trade, boosting demand for them. Since then, the stock price has tanked as the company faced challenges getting its first batch of cars to U.S. consumers. Reviewers panned the VF8 for quality issues.

Where Are They Now? VinFast is building a $2 billion factory in North Carolina, which will allow its vehicles to potentially qualify for a federal tax credit. Over 70% of VinFast’s passenger vehicles and nearly half of its scooter sales last year were to a taxi company owned by Vuong, the head of Vingroup. VinFast has said it plans to deliver 100,000 electric cars and SUVs this year, but hasn’t said how many will be to customers outside of the Vingroup network.