It's Thursday, which means that you've almost made it to the end of the week (congratulations, by the way)! It also means one last chance to read Critical Materials—your daily news roundup featuring a few of today's must-know EV and tech stories—until Monday.
Today, we'll talk about some cybersecurity challenges for auto dealerships and how that isn't great news for your wallet. Faraday Future also has some concerns about whether or not its stock will stay on Wall Street. And some Tesla owners in driving school are also hit with the wet slap of unpleasant tidings: schools are dropping support for the EVs over the lack of turn signal stalks.
30%: Faraday Future is delivering cars again, but its rocky stock is facing a potential delisting anyway
Faraday Future, the plagued yet resilient California EV startup, is once again delivering vehicles—one of its FF 91 2.0 Futurist Alliances, to be specific. Granted, the vehicle was to one of its own employees and was one of just 10 deliveries made in 2023, but it was a delivery nonetheless.
Technologically, the FF 91 seems to be a rather impressive machine. It boasts a 2.3-second zero-to-60, a range of more than 380 miles on a single charge, and it looks unlike anything else on the road. Unfortunately, it hasn't been quick to market, which has cost the company immensely.
Unfortunately, Faraday isn't in the best shape. The company has been on life support for some time, struggling to stay afloat amid high-profile departures and funding issues. Now, the EV startup could face delisting from the NASDAQ over its share price.
At the time of writing, Faraday is trading for $0.18 per share—a drop of 99.8% from its height of $1,121.60 in June 2021. The company has failed to maintain a share price of at least $1 per share since Nov. 9, 2023, which has ultimately led to Faraday receiving a delisting notice if its stock doesn't cross the $1 threshold by June 24th (and maintain it for 10 consecutive trading days.)
The fact that Faraday is generating revenue is a good thing, but the sale of its $300,000 EV won't sustain it for that long. It has been estimated that Faraday (like Fisker, Canoo, and others) has just "weeks" of cash on hand needed to maintain its operations, so the lack of recurring revenue is a genuine concern if the business wants to stay afloat in a market where competition is increasing every single day.
60%: Dealerships are slammed with cybersecurity concerns rolling into 2024, and that's not good news for your wallet
Last year, the Federal Trade Commission's Safeguards Rule for auto dealerships went into effect. The goal is simple: keep customer data safe. However, like pretty much any cybersecurity-related task, it's much more complex under the hood. In May, Dealerships will soon need to comply with new mandated reporting requirements to be implemented in May—and that has many of them sweating.
"These new obligations that go into effect [...] state that if the dealer has reason to believe or knows that an unauthorized individual had access to more than 500 records of customer information, that has to get reported to the FTC and the FTC will then make it public, which has pretty serious reputational consequences for the dealer," said ComplyAuto CEO Chris Cleveland, in an interview with Automotive News.
Essentially, dealerships are worried that reporting these types of attacks could lead to liability exposures that were not previously made public
CDK Global's whitepaper, titled 2023 State of Cybersecurity in the Dealership, explores what kind of cyber-related threats auto dealers are facing. And in that paper, 46% of dealerships surveyed experienced some kind of cyber attack over the surveyed year.
The human is the weakest element. Of 2023's top six threats, three are directly tied to people: phishing, employee awareness training, and stolen/weak passwords. Ransomware, malware, and business data theft are the remaining three.
Ransomware has also become more complex. Previously, threat actors would simply encrypt files across a network and unlock them should the company pay the ransom. However, as companies became better adapted to protecting against this by implementing immutable backups, ransomware has shifted to extortion tactics. This has led the actors to exfiltrate the encrypted data and threaten to leak it should the business fail to pay up. And in that case, a dealership would be mandated to report the incident under the newest amendment to the Safeguards Rule.
Protecting against these types of attacks can be costly. Backups, endpoint detection and response software, and even basic cyber hygiene is expensive—but losing customer data and trust can be even more costly to a business. Eventually, the dealership will need to bake its increased costs into the price of its vehicles, which means more expense to the consumer in order to mitigate business risk.
90%: Driving schools are banning Teslas over their lack of turn signal stalks
The roads in Norway are full of EVs. After all, more than 82% of all new car sales in 2023 were electrified in the country. And, to almost no surprise, Tesla is one of the top-selling brands in the region. That's now proving to be an issue for driving schools who are choosing not to use Teslas due to their lack of turn signal stalks.
Previously, only Tesla's newer Model S and X vehicles were equipped with a stalkless design. The turn signals were moved to buttons on the steering wheel (which people hate in other brands) and the gear selection to the vehicle's touch screen. Now, the refreshed Tesla Model 3 Highland is also taking on this same design. This has become a problem given the lower price barrier and how popular Tesla's EVs are in Norway.
According to local auto publication Motor, driving schools in the country have started to turn away from purchasing the refreshed Teslas to use with new students, specifically citing the difficulty that these drivers have with operating the vehicles in roundabouts. As part of their driving test, students must successfully blink in and out of roundabouts. The lack of a physical stalk has led to some students having difficulty pressing the button as the wheel is turned, leading to an outright failure of the test.
Jåhn Hansen Øyen, who runs the Harstad Traffic School, told Motor that Tesla's move to buttons has made it difficult for even the experienced teacher to stay focused while driving.
I tested the Model 3, and noticed that I lost both focus and direction in roundabouts. It's not directly life-threatening, but you run the risk of both driving on curbs and other cars if there are two lanes.
Personally, I haven't tried the new button-style turn signals in the Model S or X here in the States. A friend of mine recently upgraded from an older Model S to a new Model X and told me that it took him a little while to get used to the change, but it quickly became muscle memory. That seems to be the sentiment for many others online, at least here in the U.S. However, it would seem that not everyone across the globe likes the change, especially in places where roundabouts are more common.
100%: Are tomorrow's solid-state batteries keeping you from buying an EV today?
Solid-state batteries are tomorrow's promise for a more relaxing EV experience. I mean, who doesn't want a faster charge or longer range? Next-generation batteries will supposedly solve that concern and perhaps even make the transition to EVs less unnerving, at least from a range anxiety perspective.
Volkswagen is the next automaker up to bat with this promise as its U.S. battery partner, QuantumScape, says that it has made a significant breakthrough with its solid-state tech. In fact, it says that its test results "significantly exceeded" the industry targets with only 5% storage degradation over 1,000 charging cycles, or more than 310,000 miles on the road. Industry targets are 20% loss at 700 cycles.
So with faster charging cycles, less degradation, and higher ranges, next-gen EVs seem to be the next best thing in the automotive space. But is that keeping you from considering a current-generation EV today?
Let us know in the comments if you plan to buy soon or wait for the solid-state era to upgrade.