VOLVO, WAYMO PARTNER TO BUILD SELF-DRIVING VEHICLES
Waymo and Volvo Cars have agreed to develop a self-driving electric vehicle designed for ride-hailing use, as part of a new global partnership, the companies said Thursday. Waymo, a unit of Silicon Valley's Alphabet Inc., said it will be the exclusive global partner for Volvo Cars for developing self-driving vehicles capable of operating safely without routine driver intervention. Waymo will focus on the artificial intelligence and certain hardware, including cameras, lidar and radar, for the automated "driver." Volvo will design and manufacture the vehicles. The companies said Waymo will work with Volvo's global brands, including Polestar and Lynk & CO.
Volvo, owned by China's Zhejiang Geely Holding Group, has a separate agreement to deliver vehicles to ride-hailing company Uber Technologies Inc. that Uber will equip to operate as self-driving vehicles. Volvo Cars is continuing to deliver vehicles to Uber.
Uber's development of self-driving vehicle technology was disrupted after a self-driving Volvo crossover operated by Uber struck and killed a pedestrian in Arizona in 2018. More recently, Uber has been slashing costs and staff to offset revenue lost to the coronavirus pandemic. CEO Dara Khosrowshahi has said Uber is open to using competitors' technology. The Waymo-Volvo deal marks a return by Waymo to its early goal of rethinking how cars that can pilot themselves should look. Since retiring its Firefly self-driving car in 2017, Waymo has retrofitted its software and sensors into conventional vehicles such as Chrysler Pacifica minivans.
Waymo earlier this year raised $3 billion in its first external investment round.
Rival Cruise, majority-owned by General Motors, has unveiled an electric, self-driving people carrier called the Cruise Origin.
Waymo and Volvo did not say when or where they expect to launch their new ride-hailing vehicle. Waymo said it will continue working with Fiat Chrysler, Jaguar Land Rover and the Renault-Nissan -Mitsubishi alliance.
Source: Reuters
CRUEL SUMMER?
There could be a "cruel summer" ahead for the auto industry amid an uncertain economic environment, low inventory levels and COVID-19 cases increasing in some parts of the country, Cox Automotive analysts said Wednesday. Almost halfway through 2020, automakers are just now returning to production levels equivalent to before the two-month shutdown resulting from the pandemic. They have offered 0% financing and other incentives to keep up sales, but the industry that represents nearly 4% of the national economy could be in for a long recovery more like Nike's swoosh than a "V" or "U," said Jonathan Smoke, Cox's chief economist. On the retail side, constantly fluctuating market conditions may challenge the automakers, he said. Inventory in mid-June was lower than a year ago with roughly 600,000 fewer units and 71 days of supply.
Source: The Detroit News
AMAZON BUYS DRIVERLESS CAR STARTUP ZOOX FOR UNDISCLOSED PRICE
Amazon.com Inc. is buying autonomous vehicle startup Zoox Inc., a move that could potentially help the e-commerce giant slash delivery costs and create a formidable opponent to ride-hailing and food-delivery companies. Terms of the deal were not announced in a statement Friday, but The Information reported that Amazon agreed to pay more than $1 billion for the firm.
Aicha Evans, Zoox's CEO, and Jesse Levinson, co-founder and chief technology officer, will continue to lead the company as a standalone business. "Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience," said Jeff Wilke, the head of Amazon's worldwide retail business.
Shipping costs are one of Amazon's largest expenses, and Zoox could help the company shave off more than $20 billion annually, Morgan Stanley analysts have estimated. Still, autonomous vehicles have been a target of Silicon Valley giants and venture capital investors for years, but technical and regulatory hurdles have made getting safe AVs on the road a longer slog than the boosters had hoped.
Bulking up in driverless technology extends Amazon's efforts to build its own third-party logistics network. Last year, Amazon invested along with Silicon Valley venture firm Sequoia Capital in Aurora Innovation Inc., a self-driving startup led by the former heads of Google's driverless car project and Tesla Inc.'s Autopilot team. Amazon has also backed Rivian Automotive Inc., the electric pickup and SUV maker.
Zoox, a 1,000-person startup based in Foster City, Calif., has been developing a prototype for driverless cars to ferry passengers around in urban areas via an app, but Amazon could potentially also use the vehicles to deliver packages. Seattle-based Amazon has also tested sidewalk crawling robots and drones as alternative delivery methods. In the statement, Amazon highlighted Zoox's "ground-up vehicle" that "focuses on the ride-hailing customer." Founded in 2014, Zoox had outsize ambition and financial backing. The startup wanted to build a fully driverless car by this year. However, after a 2018 funding round that valued Zoox at $3.2 billion, the startup's board voted to oust CEO Tim Kentley-Klay. The executive criticized the move, saying the directors were "optimizing for a little money in hand at the expense of profound progress."
Source: Bloomberg
MARGIN FOR ERROR JUST GOT SMALLER IN NEW-CAR OPERATIONS
The U.S. consumer and economy are returning to some semblance of normalcy, but the new-car business is likely to be anything but normal for the foreseeable future. Dealers are facing a rare situation in many markets: Consumer demand is higher than supply. Online shopping metrics are off the charts across various Cox Automotive properties, such as Autotrader and Kelley Blue Book, as many shoppers are in need of some "retail therapy" and excited to take advantage of compelling incentive offers.
Source: WardsAuto
SLUMPING FLEET SALES WEIGH ON U.S. AUTO MARKET
Collapsing demand from rental car companies, corporations and government agencies has sapped U.S. auto sales during the coronavirus pandemic and a recovery will likely be slow, threatening auto workers whose jobs depend on fleet sales. Weak fleet orders are expected to hurt June sales, which automakers will report on Wednesday. Cox Automotive forecasts fleet sales will fall nearly 56% to 1.3 million vehicles after plunging 83% in May and 77% in April.
Source: Reuters
SHORTAGE OF NEW-CAR SUPPLY, INCENTIVES COULD BOOST LURE OF CPO
Supplies and incentives are running a bit short in the new-car market. And for cost-conscious shoppers, certified pre-owned may prove to be an attractive alternative, according to an analysis from Edmunds. When June started, new-vehicle inventory levels were only two-thirds of what they were a year ago, Edmunds said, thanks to the impact of factory shutdowns during the pandemic. And while automakers piled on new-car incentives at the pandemic's outset, those are now "drying up," Edmunds said in its analysis.
Source: Auto Remarketing
TEN YEARS AFTER IPO, A LOOK BACK AT TESLA'S EXTRAORDINARY DECADE
Tesla Inc. has grown from Silicon Valley gadfly to the world's second-largest automaker by market capitalization in the decade since its initial public offering. It's been a roller-coaster ride for the electric vehicle maker's shareholders, who have experienced dizzying swoons on the way to record highs thanks in part to self-inflicted crises. "There's always a lot of drama with Tesla, but they have spurred the auto industry on to embrace electrification as key to the future of mobility," said Tony Posawatz, the former leader of General Motors' Volt plug-in hybrid program, ex-CEO of Fisker and current director at Lucid Motors Inc. "Whether they are profitable or not, they have impacted the luxury auto market forever more."
On June 29, 2010, Tesla made its debut as a public company -- the first initial public offering of a domestic automaker in a half century. The IPO price was $17 a share. CEO Elon Musk rang the Nasdaq opening bell, and the company's lone electric car, the $109,000 Roadster, was on display in Times Square. A decade later, Tesla's stock is trading at $959.74 a share, the company has grown to about 48,000 employees and its influence on the global auto industry is unprecedented. Despite plenty of doubters and some near-death experiences, Tesla's $178 billion market valuation is second only to Toyota Motor Corp. among all automakers.
Tesla no longer makes the Roadster, but it sells four other models in markets around the world. Besides design, one of the company's biggest advantage lies with its batteries: A version of the flagship Model S now boasts a range of more than 400 miles. No other electric car comes close.
"Their products create a lot of enthusiasm among customers," Posawatz said.
The company's shares closed Monday's trading up 5.2 percent to 1,009.35. As Wall Street waits for the company to report second-quarter production and delivery figures later this week, here are 10 key moments that shaped Tesla's extraordinary decade.
1. Government lifeline
In January 2010, the U.S. Energy Department awarded Tesla a $465 million loan as part of the Advanced Technology Vehicle Manufacturing Program that President George W. Bush signed into law two years earlier. The funding came at a critical time, with the nation was still clawing its way out of the Great Recession. In May 2013, Tesla paid off the entire loan with interest. The DOE program has now become a model of clean-energy stimulus spending.
2. Fremont factory
In May 2010, Tesla stunned the world when it announced it was buying a shuttered auto plant formerly run by Toyota and General Motors in Fremont, Calif., and Toyota was investing $50 million in the startup. The surprise deal was unveiled by Musk and Akio Toyoda, Toyota's president, who flew in from Japan for the announcement. The Fremont plant still produces the bulk of Tesla's cars, but the company now has a second assembly plant near Shanghai and is building a third close to Berlin.
3. Car of the Year
In December 2012, Motor Trend named the Model S its 2013 Car of the Year. It was the first winner in the 64-year history of the award not powered by an internal-combustion engine. The nod showed established automakers that battery-powered cars could be more than just nerdy science projects and gave the Tesla brand a huge boost.
4. The "gigafactory"
In September 2014, Tesla announced it had chosen Nevada as the site for the automaker's first battery-production "gigafactory," with Panasonic Corp. as its partner. The news capped a fierce battle among states hoping to land the economic-development project. The plant demonstrated Tesla's drive to vertically integrate its supply chain all the way down to the battery-cell level. Tesla is now making moves to establish its own cell manufacturing operation in Fremont, and investors are eager to hear more at a "Battery Day" event in September.
5. Musk's iPhone moment
When Tesla unveiled the Model 3 sedan in March 2016, customers lined up in a way the world had grown accustomed to seeing consumers queue up for iPhones. The promise of a $35,000 mass-market car barely materialized -- the average transaction price is closer to $50,000 -- but the Model 3 managed to rival mainstream sedans on sales charts. The company is now trying to tap into a growing segment of the market with the Model Y crossover.
6. Autopilot scrutiny
On May 7, 2016, a devoted Tesla customer and former Navy SEAL, Joshua Brown, died when his Tesla Model S collided with a tractor-trailer in Florida. Tesla's driver-assistance system Autopilot was engaged at the time, and the death was the first known fatality involving the technology. U.S. regulators investigated but found no defect. Autopilot continues to come under scrutiny, and several other fatalities in the U.S. have been linked to the system.
7. Solar sibling
In June 2016, Tesla announced it was making an offer to buy SolarCity, a solar panel installer Musk founded with his cousins. The conflicts of interest were stark: Musk was SolarCity's largest shareholder and the chairman of its board. SolarCity was struggling financially and Tesla had just unveiled the Model 3, but Musk pitched the acquisition as a "no brainer" and announced a new tiled-roof product to sell investors on the acquisition. The rollout of the Tesla-branded roof has been slow, and the deal itself continues to be contested, with a lawsuit by Tesla shareholders slated to begin next month in Delaware Chancery Court.
8. "Funding secured"
As foreshadowed by Musk's prediction the previous fall that Tesla would find itself in "production hell," 2018 was a crazy year. Tesla struggled to mass-manufacture the Model 3 and built an assembly line under a massive outdoor tent to boost output. Scores of executives left. In July, Musk called a British cave diver a "pedo guy" on Twitter, triggering a defamation lawsuit. The following month, Musk shocked investors and his own executives when he tweeted about taking Tesla private at $420 a share and said he had "funding secured." Three weeks later, in a late Friday night blog post, Musk backtracked and said Tesla would remain public. A month later, the U.S. Securities and Exchange Commission sued Musk for securities fraud. The settlement stripped Musk of the chairman role for three years -- meaning that Musk could become chair again in late 2021.
9. Shanghai showing
Tesla scored a major win in the midst of all the 2018 drama by becoming the first American automaker to be allowed to build a manufacturing plant in China without a local joint-venture partner. Tesla's factory near Shanghai started delivery of its first vehicles on Jan. 7, one year after breaking ground. China is the world's largest auto market and a huge part of Tesla's future growth plans.
10. Cybertruck smash
In November, Musk unveiled the futuristic Cybertruck, an angular pickup shaped far differently than a Ford F-150. The real show stopper was when Franz von Holzhausen, Tesla's long-time design chief, smashed two of the truck's ostensibly shatterproof windows with a metallic ball. The botched demo generated an enormous amount of buzz. Tesla wants to build a plant for the Cybertruck in the U.S., and sites in Texas and Oklahoma are the two finalists.
Source: Bloomberg
MORE GOOD SIGNS FOR AUTO AUCTION SALES VOLUME
The first half of 2020 has been mired with challenges in the wholesale car market, but one particularly positive trend has emerged at the tail end of the of second quarter. Auction sales volume have made a strong comeback and are now at or above year-ago figures, according to industry analyses. In its weekly COVID-19 Market Update released Tuesday, Black Book said: "Despite most auctions continuing to operate under an all-digital platform, sales volume has rebounded to a level consistent with, and on some days higher, than this time last year.
Source: Auto Remarketing
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