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Two years ago, Volkswagen debuted a prototype of its ID.7, the sixth model in its lineup of electric vehicles, at the Consumer Electronics Show in Las Vegas. The automaker said it was planning to launch the EV in three primary markets: Europe, China, and North America. But now, after a series of delays, VW has canceled its plans to sell the ID.7 in North America. Due to the ongoing challenging EV climate, Volkswagen has decided to no longer offer the ID.7 to the North American market, a Volkswagen spokesperson said. Despite this, electric vehicles continue to be a core part of Volkswagens long-term product strategy, and new electric models will continue to be introduced for this market. EV sales in the U.S. have been growing. They jumped more than 15% in the last quarter of 2024, compared to the year prior, setting a new quarter sales record. Sales for the entire year reached 1.3 million in the U.S., a more than 7% increase compared to 2023, according to data from Cox Automotive. But the Trump administration has already made the EV climate more challenging. Moments after being sworn in this week, Sean Duffy, Donald Trumps new Transportation Secretary, signed a memorandum to roll back fuel economy standards with the aim of eliminat[ing] the electric vehicle mandate. This follows an executive order by Trump promising to do the same, though no such mandate to force Americans to purchase EVs actually exists. What Trump is actually targeting are the EV tax credits of up to $7,500 that are part of the Inflation Reduction Act and Bidens goal to have EVs make up 50% of new vehicle sales by 2030. [Photo: Volkswagen] Some automakers were already scaling back their EV plans. Ford announced in August 2024 that it was canceling some electric SUVs in favor of hybrid models as a way to improve profits, though said it was still planning to roll out new all-electric vehicles in the future. Volkswagens ID.7 was first planned for 2024, but last year the automaker announced an indefinite delay due to changing market dynamics. The ID.7 has already launched in both Europe and China. Despite solid sales for 2024, automakers are now on edge as the EV industry in the U.S. faces an uncertain future. Trumps anti-EV agenda and plans for tariffs pose a threat to EV sales. The legality of Trumps actions are yet to be seen, however. And even still, analysts do expect EV sales to grow in 2025. Cox Automotives 2025 outlook predicted that one out of every four vehicles sold in 2025 will be electrified. The market is gaining momentum, economic fundamentals are improving, and consumer sentiment is pointing in the right direction, Cox Automotive Chief Economist Jonathan Smoke said in a statement. We are ready for what 2025 might bring.
Category:
E-Commerce
Spirit Airlines has rejected a merger offer with Frontier as it prepares to exit bankruptcy. Wednesday, Frontier made its second offer to merge with the bankrupt Spirit Airlines, but Spirit rejected it on the grounds that it was financially insufficient. In 2022, Frontier offered to acquire Spirit for $2.9 billion, but the offer was ultimately rejected when Spirit chose to accept a higher offer from JetBlue (which was later blocked for antitrust concerns). Frontier Airlines put forward its current merger offer in hopes of creating a strong, low-fare airline together. “We have long believed a combination with Spirit would allow us to unlock additional value-creation opportunities,” said Barry Biffle, CEO of Frontier, in a statement. In a joint letter to Spirits chair and CEO, Biffle and Frontiers chair of the board added that they believe the transaction generates more value for all Spirit stakeholders than Spirits current plan filed to the Bankruptcy Court. But Frontiers offer was lower than the amount the two parties had discussed in 2022, Raniero DAversa, an attorney and market-leading practitioner in bankruptcies, out-of-court restructurings, and creditors’ rights controversies, tells Fast Company. In Frontiers offer, debt holders would receive $400 million in new debt and 19% of Frontiers common equity. It would also require stakeholders to invest $350 million in equity, which they were not willing to do, according to a regulatory filing. The offer appears to be too little, too late, DAversa says. In its rejection of the offer, Spirit said that the board believes Frontiers proposal is so insufficient as not to merit a counter. Accepting or considering this offer could also interfere with the airlines plans to exit bankruptcy, which it had filed for in November. Spirit Airlines is on a fast track to exit, DAversa says. Any serious consideration of the Frontier offer would derail the whole bankruptcy process, which is overwhelmingly supported by its constituents. The airline has a February 13 court date to finalize its exit plan. While a company and its board have a fiduciary obligation to consider any deal for the benefit of its constituents and equity holdersand in the case of bankruptcy, its creditorsthey’re under no obligation to actually accept it. Although Spirit has operated normally during its bankruptcy, the airline has cut 200 jobs and sold some Airbus planes in order to raise millions of dollars. DAversa compares the situation to the classic “a bird in the hand . . . ” idiom. Spirit is lined up to come out of bankruptcy imminently, and it appears the airline is ready to fight through its final month rather than merge.
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E-Commerce
President Donald Trump‘s budget office on Wednesday rescinded a memo freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country. The Monday evening memo from the White House Office of Management and Budget sparked uncertainty over a crucial financial lifeline for states, schools and organizations that rely on trillions of dollars from Washington and left the White House scrambling to explain what would and wouldn’t be subject to a pause in funding. The reversal was the latest sign that even with unified control of Washington, Trump’s plans to dramatically and rapidly reshape the government has some limits. The White House confirmed that OMB pulled the memo Wednesday in a two sentence notice sent to agencies and departments, but said that Trump’s underlying executive orders targeting federal spending in areas like diversity, equity and inclusion and climate change, remained in place. Administration officials said the notice to halt loans and grants was necessary to conduct a review to ensure that spending complies with Trumps recent blitz of executive orders. Agencies had been directed to answer a series of yes or no questions on each federal program by Feb. 7. The questions included does this program promote gender ideology? and does this program promote or support in any way abortion? Still, the vaguely worded memo, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services. The freeze was scheduled to go into effect at 5 p.m. Tuesday, but was stayed by a federal judge until at least Monday after an emergency hearing requested by nonprofit groups that receive federal grants. An additional lawsuit by Democratic state attorneys general was also pending. The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments, White House press secretary Karoline Leavitt said, blaming the confusion on the courts and news outlets, not the administration. This action should effectively end the court case and allow the government to focus on enforcing the Presidents orders on controlling federal spending.” Administration officials insisted that despite the confusion, the order still had its intended effect by underscoring to federal agencies their obligations to abide by Trump’s executive orders. Although Trump had promised to turn Washington upside down if elected to a second term, the effects of his effort to pause funding were being felt far from the nations capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, and Head Start which provides early childcare in lower income communities, were worried about getting cut off. On Tuesday, Trump administration officials said programs that provide direct assistance to Americans, including Medicare, Social Security, student loans and food stamps, would not be affected. But they sometimes struggled to provide a clear picture. Leavitt initially would not say whether Medicaid was exempted from the freeze, but the administration later clarified that it was. Democratic critics of the order moved swiftly to celebrate the action. This is an important victory for the American people whose voices were heard after massive pressure from every corner of this countryreal people made a difference by speaking out,” said Sen. Patty Murray, D-Wash. “Still, the Trump administrationthrough a combination of sheer incompetence, cruel intentions, and a willful disregard of the lawcaused real harm and chaos for millions over the span of the last 48 hours which is still ongoing.” Senate Democratic leader Chuck Schumer of New York said that Americans fought back and Donald Trump backed off. Chris Megerian and Zeke Miller, Associated Press
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E-Commerce
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