Carvana takes a lot of money, Audi can build a factory in the US and Elon Musk. All that and more in Morning shift for February 24, 2023.
Gear 1: Carvana
carvana, it’s on the way to Struggle – prefer Complete the street of despair – said on Thursday that it was lost $806 million net for the last three months of 2022. Through auto newsall these numbers are bad:
The online used-car retailer reported $2.8 billion in revenue for the fourth quarter, down 24% year-over-year. For the full year of 2022, Carvana reported revenue of $13.6 billion, up 6.2% from 2021.
The Tempe company, Ariz., sold 86,977 vehicles in the fourth quarter of 2022, down 23%. The profit it made per retail vehicle fell 51% to $2,219, down $2,347 from the fourth quarter of 2021 numbers.
For the full year, Carvana sold 412,296 vehicles, down 3.0% from 2021. The company’s annual profit per vehicle was $3,022, down $1,515 from 2021.
Carvana CEO Ernie Garcia and Chief Financial Officer Mark Jenkins wrote in a letter to shareholders: “From a short-term perspective, it is clear that this has been a very difficult year. “After eight consecutive years of year-on-year improvement, this is the first year we’ve stepped back from key retail unit sales, total GPUs, net income margin, and adjusted EBITDA margin.”
The turnaround plan for Carvana includes cost and inventory reductions, Although currently not having to lay off employees, according to car news. I don’t know car vending machine always seems to me like a surprising idea. I prefer the old way than going to a random used car a lot and talked to a guy wearing a cheap suit he said that this Saturn Ion is really a bargain.
Number 2: Audi
Audi, which is owned by Volkswagen, has no car factories in the United States, choosing to import instead. But that could change, based on Reutersunder the Inflation Reduction Act, which has caused many automakers rethink their production plan thanks to the new offers. Audi CEO Markus Duesmann said the automaker can start making cars in the United States, alone or with VW. VW has a factory in Chattanooga, Tennessee, where the ID.4 is manufactured. From Reuters:
CEO Markus Duesmann said that a decision has not yet been made but that the IRA has made building electric vehicles (EVs) in the United States a lot more attractive. Duesmann made the comment in an interview with the Frankfurter Allgemeine Zeitung, which was later confirmed by the company.
When asked if Audi would build a factory on its own or do so alongside other Volkswagen brands, Duesmann said: “Both are possible. But the possibility of us doing it in the group is very high.”
Automakers in recent years have moved to reduce exports and imports in major markets such as the United States, China and Europe, instead localizing production and supply chains to reduce costs. shipping and logistics fees.
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Audi has a factory in Mexico that specializes in the production of the Q5, so this is not an entirely new area for Audi in North America. It’s also a bit odd that Audi doesn’t make cars in the US yet, based on what their competitors are doing: BMW has a giant factory in South Carolina, and Mercedes run a factory in Alabama. Looks like they all got here in the end, especially now thanks to an IRA.
3rd gear: Scout
In possibly related news – it was never clear to me which parts of the Volkswagen empire were talking to each other and which to separate themselves — Reuters Friday report that VW will build a factory in the US to manufacture Scouts. That will be VW .’s new EV off-road vehicle trademark inspired by the International Harvester SUV. Or at least, used the legendary name and died long ago. From Reuters:
Volkswagen Group (VOWG_p.DE) will build its own manufacturing plant in the United States for the new Scout brand instead of working with a partner, industry publication Automobilwoche reported on Friday, citing sources company news.
[…]
Automobilwoche reported in November that the carmaker was in talks with Foxconn (2317.TW), which has expanded into the field of making electric vehicles (EVs) for its auto brands and subsidiary Magna. Steyr (MG.TO) of Magna International on the construction of a joint plant.
Building its own factory was the least viable option, the publication reported at the time, citing company sources.
Volkswagen is expanding its existing plant in Chattanooga, Tennessee, USA for ID production. Noisy. However, the Scout brand that will build off-road pickups and SUVs requires a new platform, and the Chattanooga plant doesn’t have enough space to do it all, a source told Reuters last May.
A VW spokesperson said: Reuters that plans are still underway but production is still on track for 2026.
4th device: Elon Musk
Tesla CEO Elon Musk was found not responsible earlier this month in a securities fraud trial in San Francisco, via a tweet he posted in 2018, which said he had “secured the funding” to take Tesla private. The whole challenge is super silly, since things that originate from Twitter tend to be like that, but Bloomberg says that the Securities and Exchange Commission is still talking about it.
I am afraid that all this is very complicated:
Musk has been battling with the SEC over his social media posts since he tweeted in 2018 that funding had been secured to take Tesla private. That prompted the regulator to sue, alleging that Musk and Tesla misled shareholders. The two settled with the SEC, each paying $20 million, and agreed that Musk’s Tesla-related tweets would be reviewed by a lawyer – commonly known as a Twitter manager – before posting them.
The judge handling the SEC case denied Musk out of the agreement, prompting the Tesla CEO to appeal to the 2nd US Circuit Court of Appeals.
Musk’s attorney argued before the appeals court that the San Francisco ruling confirmed that Musk’s tweets did not violate securities laws. Investors sued Musk over his “financial security” tweet, alleging that he defrauded them. It took a federal jury just two hours to clear him, sending the electric carmaker’s shares soaring.
That ruling is not relevant, the SEC said in a response Thursday. According to the filing, Musk lost the opportunity to examine the SEC’s statements at trial when he twice voluntarily agreed to the settlement.
“Even if the ruling is somehow related, Musk has read too much about it,” the SEC said. The agency’s lawyers added that the settlement “is independent of the outcome of the private lawsuit.” “The committee has no role in that case.”
Musk’s attorney, Alex Spiro, did not immediately respond to an email sent late Thursday seeking comment on the SEC filing.
One day the word “Twitter custodian” will mean absolutely nothing to me and I can’t wait.
Number 5: Hyundai
Some Hyundai suppliers in Alabama problem with child laborthat’s not great. Reuters said friday Hyundai will divest from one of its suppliers accused of using child labor.
In a February 24 letter to shareholders from Hyundai CEO Jaehoon Chang, the company said recent audits at 29 of its direct suppliers across Alabama give it confidence that it ” are fully compliant with juvenile labor laws.”
[…]
One of the factories where children work, SMART Alabama LLC in rural Luverne, Alabama, is a direct subsidiary of Hyundai. According to Hyundai’s financial statements from last year, the automaker controls a 72 percent stake in SMART.
Chang wrote that Hyundai is “in the process of divesting its ownership of SMART” but will ensure “that economically important jobs in the community of Luverne, Alabama are preserved.”
Hyundai’s letter did not say when the transaction would be completed or identify the buyer or the type of divestment it would take. Since the early 2000s, the metal stamping plant has been producing chassis parts for hundreds of thousands of Hyundai vehicles each year.
Reversed: Happy Birthday Alain Prost!
Prost is one of the greatest Formula 1 drivers ever and don’t let anyone tell you otherwise. Formula 1 has a nasty policy of not allowing embedding their videos, but here are their top 10 Prost vids on Youtube.
Neutral: How are you?
I’m very excited for the second day of F1 testing in Bahrain, as it will be an explosive year in Formula 1. I feel like no one is talking about Ferrari as a contender? Ferrari is a contender!
