Auto Industry News: 2021 NACTOY Semi-Finalists Named, Nikola Drama Drags On, and FCA Owes $9.5M

It’s that special time of year again, folks. That’s right, the North American Car, Truck and Utility of the Year (NACTOY) semi-finalists have been named! Also, drama over at Nikola continues to drag on and FCA finds itself in some (more) hot SEC water.

2021 NACTOY Semi-Finalists Named

Thanks to several COVID-delayed new vehicle launches, we had to wait a bit longer  for NACTOY’s semi-finalist announcements. However, the moment has finally come—and the contenders are impressive.

The standard bearers when it comes to innovation, design, safety, performance, technology, driver satisfaction, and value in the auto industry, NATCOY released its list of 27 semi-finalists this past week. The list includes eight sedans, four trucks, and a whopping 15 SUVs. With challengers like the Genesis G80, Ford Bronco Sport, Cadillac Escalade, Ram 1500 TRX, and Jeep Gladiator Mojave, we expect some fun deliberations.

KIA fans should be particularly excited this year. Seven of the automaker’s vehicles made it to the semi-finals. That’s nearly double the next two automakers on the list, Ford and GM.

And the Winner is…

Selections will be compared, contrasted, and judged by a jury of 50 of the most well-respected names in print, online, and radio broadcasting across North America, narrowing the choices down to just three per category. Whether it’s a powerhouse sedan packing a supercharged V8 or a fully-electric SUV, these judges are out to find the best-of-the-best in every make, model, and body type. 

“Many of the new models on our semifinalist list make bold statements that are intended to distinguish them within their segments,” NACTOY President Gary Witzenburg said in a press release. “Several are all-electric, while others have groundbreaking designs or off-the-charts capabilities. It will be fascinating to see which risks pay off this year as our evaluation process continues.”

For North American consumers, NAYCOY awards have long been the barometer for top-notch vehicles. After all, if a vehicle has made it all the way to the semi-finals, with a set of distinguished experts picking them apart, they must be pretty good right?   

Finalists will be announced December 17 in Los Angeles. A winner will be chosen January 11 in Detroit during an event hosted by the North American International Auto Show. Until then, we’ll just have to cross our fingers and see what happens. It’s not like we have much else to do these days, right? (Wrong! Check out our recent Competition Corner, here.)

Drama with Nikola

Have you guys been keeping up with the drama at Nikola? Well, we have. And boy-oh-boy is it juicy. Stick with us here because the situation is a little convoluted. Ready? Alright, let’s dive in.

Back in early September, Nikola—an ambitious startup featuring a fully electric, zero-emission vehicle lineup designed to compete with Tesla for market share in the EV field—ran into some trouble. Short sellers accused the young company of being an “intricate fraud,” claiming Nikola vastly overstated the capabilities of its earliest trucks. They even went so far as to say the company had engaged in “lies and deception” for profit. Read the full, damning Hindenburg report HERE.

Oh, and did we mention these bombshell accusations came just days after Nikola entered into a $2 billion alliance with GM? As part of the deal, the Detroit automaker agreed to become a manufacturing partner to Nikola and produce the startup’s Badger pickup truck, taking an impressive 11% share in the company during the process. Interesting timing, huh?

Nikola called the report “false and defamatory,” claiming it contained “dozens” of inaccurate statements. However, as Bloomberg points out, in THIS old video of a Nikola prototype debut, the company’s founder and executive chairman Trevor Milton did, in fact, describe the truck in question as not being a “pusher,” i.e. an inoperable prototype.

The problem?

There were no motors and gears in the truck. It was literally pushed downhill.

For a newly-gone-public EV company, you can see how this would translate to the PR kiss of death. 

As a result, Milton stepped down in late September. As seems to be the case these days, he took to Twitter to launch his defense, then subsequently deleted it, along with his account. Thank goodness for screenshots, eh?

Despite the online appeal, the Securities and Exchange Commision (SEC) and US Department of Justice are still digging in and making official inquiries. Worse, shares for the company tanked 22%.

So this seems to be open and shut, right? The head of a company totally lied, stocks fell, and now he’s out of a job. Cut and dry. Book it, Danno! This one’s done and dusted.

Not so fast… Many of the company’s most fervent defenders claim Hindenburg’s accusations aren’t relevant, as Nikola had long abandoned any and all plans to bring that truck to market. Others point out that short sellers stand to profit from falling stocks and Nikola’s downfall. In truth, both points are valid.

As a result of this complicated soup of corporate madness, Bloomberg reports, “GM is considering revisions to its deal with embattled Nikola Corp., … and may seek a higher stake in the startup now that its valuation has fallen after allegations of deception.”

We’ll leave it up to you to decide if GM is making big mistake or a shrewd bargain.

Where does Nikola go from here?

Well, adding fuel to the fire, this past week allegations of sexual abuse surfaced against Milton. Two women, one of whom is his cousin, accuse Milton of sexually assaulting them in 1999 and 2004.

It’s certainly possible with Milton off the board, Nikola’s deal with GM will go swimmingly and stocks will bounce back. It’s also possible another massive shoe could drop. Stay tuned, as we’ll be following this one closely.

FCA to Pay $9.5 Million Civil Penalty in SEC Probe

Speaking of car manufacturer misdeeds, let’s talk about FCA for a bit.

Roughly a year after the Detroit-based automaker paid out a hefty $40 million SEC fine for misleading investors, another massive hammer dropped this week. Fiat-Chrysler owes the SEC another $9.5 million—this time for fudging numbers on emissions standards.

Similar to the now-infamous Volkswagen Dieselgate, FCA has been accused of misleading investors regarding emissions standards. The scandal includes 104,000 Jeep Grand Cherokee SUVs and Dodge Ram 1500 pickups from the 2014-2016 model years with 3-liter V6 diesel engines.

FCA denies any wrongdoing. However, the automaker’s former senior manager of diesel engine calibration, Emanuele Palma, was indicted last year on charges directly related to FCA’s use of software to falsify emissions numbers. In fact, the SEC’s investigation found an astounding eight different auxiliary “defeat” devices.

According to The Detroit News: “The SEC agreement is a small portion of what FCA will pay in connection with the investigation. Total settlement costs previously were expected to be nearly $800 million in penalties to several government agencies and payments to drivers with affected models.”

Big Brother

Government agencies certainly seem to be cracking down on emissions standards integrity. Joining FCA on the chopping block is Daimler AG, parent company of Mercedes-Benz. Back in August, the automaker was ordered to pay $2.2 billion to settle its own emissions-cheating investigation.

Worse for FCA though, is the legislative threat to its $50 billion merger with PSA. According to Automotive News, EU antitrust regulators are deciding whether or not to clear the alliance, stating “concerns the merger may hurt competition in vans in 14 EU countries and the U.K.”

We’ll certainly have to see what shakes out in the coming months. But, you know what they say about cheaters never winning…

Other Auto News Round-Up   

Here are some quick hits of other auto news you may have missed.

…Seattle joins New York in requiring Uber and Lyft to pay app drivers a minimum wage. According to the New York Times, “Under the law, effective in January, ride-hailing companies must pay a sum roughly equivalent, after expenses, to the city’s $16 minimum hourly wage for businesses with more than 500 employees.”

…Volkswagen is “reviewing the future” of its supercar brands, as the automaker looks to free up cash for mass EV production, says Reuters. VW’s management board and directors are reviewing the carmaker’s resources. Two unnamed executives told Reuters such an assessment “could result in technology partnerships for the high-performance sports car and superbike brands, restructuring, or other options up to and including a listing or sale.”

…New Ford CEO Jim Farley showed he’s ready to take charge and turn things around for the automaker. On his first day in the new role, he announced Ford veteran John Lawler has replaced Tim Stone as CFO, effective immediately.

“During the past three years, under [former CEO] Jim Hackett’s leadership, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” Farley said. “Now it’s time to charge through that door.” Read more at the Detroit Free Press.