A year ago, a serial entrepreneur who has tried again and again to disrupt car retailing announced he was taking another swing.
Scott Painter – the founder of auto-FinTech start-up Fair, car-pricing service TrueCar and shopping portal CarsDirect – said his latest venture would shell out $1.2 billion to order electric vehicles from the likes of Tesla, General Motors and Volkswagen.
The company, called Autonomy, would offer subscriptions to models including the Tesla Model 3 and Chevrolet Bolt, giving consumers an option between a short-term rental and a multiyear lease or loan.
There was only one problem: months into Mr Painter trying to get Autonomy off the ground, Elon Musk – his friend and occasional confidant – started slashing the prices of Tesla’s EVs.
“Instead of having an $85 million fleet, we suddenly had a, say, $56 million to $57 million fleet in one day,” Mr Painter said in an exclusive interview.
The combination of Mr Musk’s price cuts and Tesla’s accumulation of more inventory than it has ever had before – meaning it is easier than ever to quickly get a Tesla – pushed Mr Painter’s start-up to the brink.
“We were very vulnerable to our lenders in that moment,” Mr Painter said. Autonomy ultimately went through a forbearance process while he worked to recapitalise the company with a new $12 million round of funding.
He also had to pare back operating costs, which included shrinking Autonomy’s staff to only 45 employees from about 120.
Suffice it to say, this brush with depreciation risk has left Autonomy well short of the goal Mr Painter announced in August of last year to order 23,000 EVs from 17 different car makers.
It is at about 1,300 cars and the chief executive believes the service will require about 3,000 to break even.
To get there, Mr Painter thinks Autonomy will need $20 million or so more in funding, which he believes will be enough to unlock the roughly $100 million borrowing capacity required to expand the fleet.
While Autonomy’s pool of cars is still fairly small, Mr Painter said the service is operating well. A new partnership with American Express has brought in more than 1,000 reservations.
He is optimistic that the US Federal Reserve’s efforts to tame inflation by raising the cost of borrowing could benefit Autonomy.
“As interest rates go up, it makes a car loan less and less of an option,” he said.
“Anybody who makes greater than $100,000 a year is going to be OK, but anybody who is at that $100,000 or lower mark is just simply not going to have access to an EV.”
Of course, companies such as Autonomy may not be out of the woods yet with respect to their vehicles losing value.
While electric-car sales continue to grow, the pace has slowed. And Tesla is not the only one with inventory issues: Cox Automotive estimates there was 103 days’ supply of new EVs available at the end of June, compared to 53 days for the overall industry.
“Market supply remains heavy, so we would expect to see continued incentives in the future,” said Jeremy Robb, Cox Automotive’s senior director of economic and industry insights.
RACE RESULTS
1. Valtteri Bottas (FIN/Mercedes) 1hr 21min 48.527sec
2. Sebastian Vettel (GER/Ferrari) at 0.658sec
3. Daniel Ricciardo (AUS/Red Bull) 6.012
4. Lewis Hamilton (GBR/Mercedes) 7.430
5. Kimi Räikkönen (FIN/Ferrari) 20.370
6. Romain Grosjean (FRA/Haas) 1:13.160
7. Sergio Pérez (MEX/Force India) 1 lap
8. Esteban Ocon (FRA/Force India) 1 lap
9. Felipe Massa (BRA/Williams) 1 lap
10. Lance Stroll (CAN/Williams) 1 lap
11. Jolyon Palmer (GBR/Renault) 1 lap
12. Stoffel Vandoorne (BEL/McLaren) 1 lap
13. Nico Hülkenberg (GER/Renault) 1 lap
14. Pascal Wehrlein (GER/Sauber) 1 lap
15. Marcus Ericsson (SWE/Sauber) 2 laps
16. Daniil Kvyat (RUS/Toro Rosso) 3 laps
The specs: 2019 Infiniti QX50
Price, base: Dh138,000 (estimate)
Engine: 2.0L, turbocharged, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 268hp @ 5,600rpm
Torque: 380Nm @ 4,400rpm
Fuel economy: 6.7L / 100km (estimate)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
Get inspired
Here are a couple of Valentine’s Day food products that may or may not go the distance (but have got the internet talking anyway).
Sourdough sentiments: Marks & Spencer in the United Kingdom has introduced a slow-baked sourdough loaf dusted with flour to spell out I (heart) you, at £2 (Dh9.5). While it’s not available in the UAE, there’s nothing to stop you taking the idea and creating your own message of love, stencilled on breakfast-inbed toast.
Crisps playing cupid: Crisp company Tyrells has added a spicy addition to its range for Valentine’s Day. The brand describes the new honey and chilli flavour on Twitter as: “A tenderly bracing duo of the tantalising tingle of chilli with sweet and sticky honey. A helping hand to get your heart racing.” Again, not on sale here, but if you’re tempted you could certainly fashion your own flavour mix (spicy Cheetos and caramel popcorn, anyone?).
Despacito's dominance in numbers
Released: 2017
Peak chart position: No.1 in more than 47 countries, including the United States, the United Kingdom, Australia and Lebanon
Views: 5.3 billion on YouTube
Sales: With 10 million downloads in the US, Despacito became the first Latin single to receive Diamond sales certification
Streams: 1.3 billion combined audio and video by the end of 2017, making it the biggest digital hit of the year.
Awards: 17, including Record of the Year at last year’s prestigious Latin Grammy Awards, as well as five Billboard Music Awards
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
