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Q&A: Green Car Pioneer Ron Cogan Offers Sage Insights

May 3, 2021 admin

Green Car Journal Publisher Ron Cogan at the 2020 Green Car Awards. He’s been covering the shift to environmentally friendly vehicles for three decades.

The automobile has transformed we live, work and play. Unfortunately, it’s also had a seriously detrimental impact on Planet Earth. And now, as it becomes more crucial to address issues like climate change, the automobile is in the crosshairs.

That’s a message many have come to just lately. Not Ron Cogan. The veteran automotive journalist was among the first to recognize the need to clean up the car, in 1992 launching Green Car Journal. Where some have focused exclusively on electrified vehicles, pure battery-electric models, in particular, Cogan and his magazine have looked at all the various green car technologies that have come — and, in many cases, gone — during the past three decades.

The latest issue of Green Car Journal focuses specifically on battery-electric vehicles. But, as is Cogan’s style, it takes a pragmatic, even somewhat skeptical, look at this potentially game-changing technology, recognizing there are still many challenges to be overcome before BEVs can clearly replace the time-tested internal combustion engine.

Cogan spoke to TheDetroitBureau.com about his years covering the green car world and what he sees coming in the years ahead.

Cogan’s enjoyed a front-row seat, watching and writing about the shift from ICE-powered vehicles to electrified models in the U.S.

TheDetroitBureau: These days, everyone is writing about electric vehicles but you’ve been at this for a long time, haven’t you? And don’t you take something of a broader look when it comes to environmentally friendly vehicles?

Ron Cogan: Green Car Journal, which launched in 1992, has been all about options, everything that’s happening in the green space, whether it’s methanol, ethanol and natural gas, even high fuel-efficiency gasoline. Now, there’s a huge push towards electrification. It wasn’t our call to tell people what to drive. With our 30^th birthday coming up we wanted to let people read different opinions from industry leaders.

TDB: We now have General Motors CEO Mary Barra setting a transition to all-electric vehicles and announcing a second battery plant. Is this the year of the tipping point for battery-electric vehicles?

Cogan: I would agree there’s a tipping point going on in the sense that there’s a major commitment by a lot of automakers. It’s gone beyond lip service. For the industry, the tipping point is here. The question is whether it is a consumer tipping point yet. Only so many people are willing to step up to pure electric vehicles. More see a hybrid as the way to go because it’s so seamless, and some to plug-in hybrids. But have we reached a tipping point for consumers? I’m not so sure.

Cogan notes that hybrids provide a level of convenience that pure EVs cannot.

TDB: Yet BEVs do seem to be gaining a lot of momentum.

Cogan: Well, the range issues is being overcome to a large degree, But even with 250 miles, on a long trip you have to plan ahead (to find places to charge), which is why I think plug-in hybrids are going to be pretty huge. When you can’t plug in you’re not limited, so I think that category is really going to expand. With a plug-in you can do everyday driving in electric but switch to internal combustion when you have to go farther. I think it’s a win-win. And it will get more people into buying electric vehicles.

TDB: I find that the best way to promote electric vehicles is to get people into electric vehicles. They’re often surprised by the performance, for one thing.

Cogan: Yeah, today’s electric vehicles are pretty amazing given what they offer — everything a combustion vehicle can offer and more. The launch in an electric vehicle can be pretty exciting and some companies, like Tesla, are keying in on that, talking about how they can beat a Ferrari on track and all that. I think that’s surprising a lot of people.

Cogan is quick to note that EVs are not the only way to improve the efficiency of vehicles. His publication’s honored several diesels.

TDB: I have more and more people asking if this is the right time to buy an electric vehicle. Many worry that, like with an iPhone, if they buy today something better will soon come out and they’ll regret it. What would you tell them?

Cogan: The technology, the range, all of that will improve over time, as will the cost which will continue to go down incrementally. So, it’s a tough question. If you find the right vehicle that appeals to you, it makes sense, go ahead and buy the vehicle. There are some great choices out there now and there are going to be more coming up. The jump to 250 miles (which most new BEVs are offering) is huge and there are going to be more and more charging stations coming online. True, the nature of it is that there’s always going to be something better. But do you never buy an electric vehicle because of that?

TDB: Doesn’t that make an argument for leasing, rather than buying? You can move to something newer and better in a few years — and not worry about trade-in values.

Cogan: I think leasing is the ideal way to go with electric vehicles. It means you don’t have to take as much of a risk. You know what your payments are. You know when you’re going to turn it in. And then, you can move on to the next generation of electric vehicles. Leasing takes the risk out.

Green Car Publisher Ron Cogan, Chevy Marketing Director Steve Mojoras and the 2016 Volt, which was honored by the Green Car Awards.

TDB: Let’s talk about batteries — in particular, next-generation batteries. Honda, Ford and others are all talking about solid-state batteries (which supposedly will be lighter, deliver longer range and shorter charging times and even reduce the risk of fire). Are they real? And will they live up to expectations?

Cogan: It seems that if solid-state comes close to all the promises it would put BEVs over the top, making all the difference in the world. Solid-state, from what we hear, is the ideal technology.

TDB: What would you estimate will be the BEV share of the market by 2030? And could it be even bigger than people are forecasting now?

Cogan: It’s tough to make a prediction, and I try to avoid that. But automakers and other interests are pushing for them and there’s a lot of interest in setting up a nationwide rapid charging network. All of that takes us in the direction where we know there’s going to be significantly more electric vehicles sold by then. But many things could influence the fate of gasoline vehicles. How’s the price of gas? If gas prices stay low there’ll be less incentive for electric vehicles. Technology will influence things. A recession could, as well. Legislation clearly will have an influence, especially if it’s a disincentive to drive on gasoline.

Honda has been at the forefront of fuel-cell vehicles with the Clarity.

TDB: On the subject of politics, the Biden administration wants to have 500,000 charging stations in place by 2030. Could that mean a faster growth rate for electric?

Cogan: If we get the range to drive on battery like you would on gasoline and you have a network of rapid chargers, suddenly, your functionality is increased exponentially. But there’s no way yet to know if the government is going to create (that public charging network). Administrations change. Agendas change. So, I don’t put stock into what you can count on as far as legislation matters.

TDB: But the Biden administration is clearly making a lot of proposals to promote electric vehicles. Do you like what you’re seeing?

Cogan: Yeah, as far as I can tell. I mean, we’re going to see how this all unfolds. This administration has a more proactive agenda for environmental issues in general and clean cars, specifically, than the previous administration. But I have to say you can’t always count on that. Back under the Obama administration, he wanted a million electric vehicles by 2015. It was never going to happen because there weren’t enough vehicles to make it happen. (But) I look at all of these things (Biden is proposing) as positive … a direction that seems to make sense for electrified vehicles.

Cogan drove a GM EV1 for a full year.

TDB: You started publishing Green Car Journal in 1992. Looking back on the last three decades, what were biggest surprises, the things you didn’t count on early on?

Cogan: One of the milestones was the debut of the GM Impact prototype and then the actual production of the GM EV1, I drove one of those for a year. It was an amazing car to be in on the evolution of electric vehicles. It was also interesting to note how hydrogen was big and then (see automakers) backpedaling, Now they’re interested in hydrogen again. It’s gaining momentum again.

One of the (other) things that surprises me is that we’re seeing such a push for electrification, at the extreme high end of both luxury vehicles and sports cars and exotics.

TDB: To wrap up, is the age of the internal combustion engine coming to an end?

Cogan: I don’t think you can discount internal combustion because it keeps getting better and better. And I don’t think you can discount hybrids and plug-in hybrids and focus just on battery-electric vehicles. Those are all a big part of the solution. It may have narrowed from when we started publishing. It’s no longer really about ethanol and natural gas and propane. It’s really about electrification and significantly more efficient internal combustion engines — and a combination of the two. It’s going to be even more exciting in the years ahead seeing how it will play out.

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Lyft Sells Self-Driving Business Unit to Toyota for $500 Million

April 27, 2021 admin

Lyft has been using the autonomous prototypes in the Las Vegas market.

Lyft Inc. sold its autonomous vehicle technology unit, Level 5, to Toyota Motor Co. for $550 million, following the lead of its rival, Uber Inc.

The company launched Level 5 in 2017 to build a self-driving system for its network of vehicles. The goal, ultimately, was to eliminate the need for drivers. The company grew to nearly 400 employees, but as Lyft continues to lose money overall, it needed to find ways to end its string of quarterly losses.

Not only will it get $550 million from Toyota, it will also stop funneling multiple millions of dollars into a development project with no finish line in sight for a payoff. Lyft gets $200 million immediately and the remaining $350 million will be paid in installments during the next five years.

Uber finalized a similar deal last fall, selling its autonomous vehicle unit called Advanced Technology Group to Aurora led by former Waymo chief Chris Urmson for $400 million.

Immediate financial relief

Lyft has provided 100,000 self-driving rides as part of its autonomous technology development.

The ride-hailing company said selling its Level 5 subsidiary puts it back on the path to profitability. First and foremost, it cuts $100 million of annualized non-GAAP operating expenses on a net basis, Co-founder and President John Zimmer noted in the announcement.

“Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year,” Zimmer said in a statement.

The company isn’t getting out of the robotaxi business. It’s already partnered with Motional and Waymo to develop self-driving tech and now it will just rely on that partnership to move toward autonomous vehicles. Working with the pair, Lyft’s already provided more than 100,000 self-driving rides in its vehicles in the last three years.

However, Lyft can now focus on what it can do best with autonomous vehicles by offering services such as routing, consumer interface and managing, and maintaining and cleaning partners’ autonomous vehicle fleets, which could mean added revenue, it said.

Uber made a similar choice

Lyft’s deal is similar to Uber’s move last December to sell its Advanced Technology Group, or ATG, to Aurora, the autonomous vehicle technology company founded by Google and Waymo veteran Chris Urmson. The deal came in at $400 million.

Uber CEO Dara Khosrowshahi noted after the sale of its ATG unit the company’s path to profitability had been shortened.

AVs were a critical component of the path to profitability by Uber, which now relies on part-time drivers or gig workers to ferry passengers, using its celebrated phone app. Uber invested huge sums in its internal AV project; however, was crippled in 2018 when one of its test vehicles struck and killed a pedestrian in Tempe, Arizona. It never really recovered.

Uber also ended up with a 26% ownership interest in Aurora on a fully diluted basis, the company said in a filing.

Aurora and Uber agreed to collaborate to launch self-driving vehicles on its ride-hailing and food delivery network. Uber is also working on building out its freight logistics platform but is not operating its own trucks at present.

The completion of the deal caused Uber’s CEO Dara Khosrowshahi to utter a familiar refrain to Reuters: “This essentially advances our path to profitability.” He said the deal should put the company on track for profitability by the end of this year, largely due to the fact Uber would no longer be investing vast sums of cash into ATG.

Krafcik Leaves Waymo After Five Years as CEO

April 2, 2021 admin

Waymo CEO John Krafcik is way gone, announcing his departure and the company’s plans to move the current COO and CTO into the role of co-CEO.

Add “former” to the title of Waymo CEO John Krafcik, who announced today he’s left the company.

The former Hyundai Motor America chief spent five years heading up the autonomous vehicle subsidiary of Google, which, according to his farewell on LinkedIn, “was called ‘Chauffeur’ internally.”

Tekedra Mawakana and Dmitri Dolgov, of whom Krafcik said “having seen their brilliance, vision, and commitment in play for years — I assure you they are very well suited for this,” take over as co-CEOs of the Mountain View, Calif.-based AI-focused company. As is often the case with senior executives, Krafcik will stay on in an advisory capacity.

“So now, with the fully autonomous Waymo One ride-hailing service open to all in our launch area of Metro Phoenix, and with the fifth generation of the Waymo Driver being prepared for deployment in ride-hailing and goods delivery, it’s a wonderful opportunity for me to pass the baton to Tekedra and Dmitri as Waymo’s co-CEOs,” he wrote.

Next steps

Waymo named former COO Tekedra Mawakana as its new co-CEO to replace Krafcik.

Krafcik didn’t offer many details what the future holds, although it could be that he’s uncertain himself. He said he and his wife, Leila, will take a “coupbatical,” which he described as “a refresh period where we look forward to reconnecting with old friends & family, and discovering new parts of the world.

“After that, we’ve got a few ideas for focus and contribution that we’ll flesh out together and share when the time is right. We’ve already relocated to Austin, Texas, and we look forward to seeing some of you there, or on our travels.”

Krafcik once headed up Hyundai’s U.S. operations, helping lead the brand through an image renaissance and a period of rapid growth. He even earned the “Automotive Executive of the Year” in 2013. However, his run there ended in late 2013 after the South Korean automaker declined to renew his contract — despite the accolade.

However, he quickly landed on his feet, taking over as CEO of TrueCar just as the automotive sales and data website was readying to go public. His tenure there was short, however, as he moved on to Waymo, then-Google’s self-driving car project, just a little more than a year later in September 2015.

Dynamic duo

Waymo CTO Dmitri Dolgov joins Mawakana as co-CEO with Krafcik’s departure.

As for the company, Mawakana and Dolgov now step into new roles. Previously the COO and CTO respectively, they are described as having “complementary skill sets and experiences.” Due to the nature of their roles, they’re already accustomed to working together.

Dolgov, who started in autonomy as part of Stanford’s DARPA Urban Challenge team, joined the company in 2009, when it was still referred to as Google’s self-driving car project. Over time, his influence and responsibility grew. He became CTO late in 2016.

Mawakana, joined Waymo as a policy lead. Prior to joining the company in 2017, she led global policy teams at eBay, AOL, Startec and Yahoo, after beginning her career as Washington, D.C.-based law firm Steptoe & Johnson LLP.

Bow. Wow! One-Bow Design Takes Mercedes EQS in an Entirely New Direction

March 27, 2021 admin

The new Mercedes-Benz EQS battery-electric sedan makes its formal debut April 15.

One thing’s for sure: there’ll be no mistaking the new Mercedes EQS sedan when it rolls down the street.

Think of the EQS as the all-electric alternative to the German automaker’s familiar S-Class flagship. But you clearly won’t confuse the two when it reaches showrooms in autumn. Some new battery-electric vehicles share the same design language as conventional, gas-powered products. With EQS, Mercedes goes off in an entirely new direction, one it’s been hinting at with concept vehicles like the 2019 Vision EQS.

The production model adopts what the automaker calls a “one-bow” design. It takes the look of the coupe-like Mercedes CLS to extremes. The result could have rolled off the set of a sci-fi film. But there are practical benefits in terms of range and interior roominess, as well.

“We said we have to go further” than just packing batteries into a conventional looking product,” Steffen Kohl, Mercedes’ director of advanced exterior style, said during a media webinar. The EQS “carries the future of Mercedes-Benz,” he added, noting the “one-bow” language of the EQS will strongly influence other products to come from the new, all-electric Mercedes-EQ sub-brand.

Plenty of power and range

Robert Lesnik led the exterior design effort for Mercedes new EQS battery-electric sedan.

EQS rides on a skateboard-like platform, mimicking virtually all new battery-electric vehicles. Its batteries, motors and other key electrical components sit below the floorboards.

The automaker will reveal full powertrain details during a formal unveiling April 15. But EQS uses twin motors, one on each axle, drawing power from a 108 kilowatt-hour battery pack. That provides about 435 miles of range using the European WLTP test cycle. The EPA rating should come in somewhere about 350 miles, according to industry observers.

The layout moves the sedan’s wheels close to the vehicle’s corners. It also frees up space where a traditional gas or diesel engine would be mounted, providing significant flexibility to the Mercedes design team.

Shorter wheelbase, longer cabin

The cab-forward design features a short nose, the angled, one-piece aluminum clamshell hood rising aggressively to flow into a steeply raked windshield. Instead of a traditional, two- or three-box layout, the look is like that of a single bow line, explained Robert Lesnik, who led the exterior design effort.

The Mercedes-Benz Vision EQS concept provided a framework for the company’s new electric luxury sedan.

“EQS will be the world’s best production car ever in terms of aerodynamics,” with a drag coefficient of 0.20 significantly better than even the sleekest of today’s supercars, he explained.

The effect “looks optically lower than it is,” Lesnik added.

The front end features a new grille with “abstracted, three-dimensional star pattern(s),” according to Mercedes. It’s framed by slit-like headlamps flowing into the front quarter panels.

“When people ask why we need a grille anymore,” Lesnik explains that it is “not an air intake. It’s a face.”

“Coming from the future”

The side panels lack the normal creases found on conventional Mercedes models, though the greenhouse does pinch in towards the trunk, giving the EQS a sense of muscularity.

The new EQS features Mercedes’ newly introduced Hyperscreen technology.

Around back, the most distinctive feature is a light band connecting what Mercedes calls “curved, 3D helix” taillamps.

From nose to tail, the new EQS measures 5.2 meters, or 204.7 inches. That’s about 3.5 inches shorter than the U.S. version of the latest Mercedes S-Class. But the electric sedan has more room for four passengers, its cabin pushed forward into what would normally be the engine compartment.

As distinctive as the exterior might be, the interior takes things even further, said Peter Balko, who oversaw development of the cabin. “We wanted our interior to be modern,” he explained, “as if coming from the future.”

Buyers will have numerous options

Buyers have several key options to choose from. The showpiece layout uses the new hyperscreen concept first shown on the latest S-Class. It features a seamless digital cluster running the entire width of the instrument panel. The organically shaped glass blends three different displays, starting with the digital gauge cluster, the touchscreen infotainment screen and a separate display for the front passenger.

The gauge cluster on the new EQS is configurable based on the wants of the driver.

EQS offers a digital gauge cluster and a large, free-floating, Tesla-like infotainment screen for those seeking a more conventional look. The space in front of the passenger can be outfitted with an assortment of different woods and fabrics and even a version of the Star Pattern grille.

The EQS will “touch almost all of your senses,” said Kohl. Among other things, the product development team has come up with three distinctive, user-programmable “soundscapes.”

Sounding off

While battery cars aren’t entirely silent, they are significantly quieter than vehicles with conventional internal combustion engines. Motorists can enjoy the lack of noise or they can opt for one of the soundscapes, “depending upon the emotions of the moment,” said lead sound engineer Thomas Kuppers.

Silver Waves is meant to be soft and soothing;
Vivid Flux is “shimming and explosive,” a bit “techie but (with) warmth,” said Kuppers; and
Roaring Pulse is “pretty raw, with “the growl of thunder,” especially under aggressive driving.

“We haven’t finished yet,” Kuppers added, noting that, “There will be new soundscapes over the life of the vehicle that we will download through over-the-air updates.”

The new EQS will borrow from the conventional S-Class by also appealing to the sense of smell, Mercedes officials noted. The new BEV will have the ability to inject scents into the cabin, including some designed specifically for the new model.

Q&A: Unite Digital Chief Strategy Officer Dave Zuchowski

March 25, 2021 admin

Unite Digital’s Dave Zuchowski offered insight into the future of automotive retailing during his session with TheDetroitBureau.

Since the very earliest days of the auto industry, motorists have shopped for cars much the same way as they do today. Or, at least, how they did until the COVID pandemic struck. During the past 12 months there’s been a massive shift to online shopping and few expect to see a return to the previous “norm.”

That’s setting in motion a dramatic transformation on the retail side of the business, starting with what dealers do and how they make money. It’s also expected to bring a sharp decline in the number of dealers serving the U.S. market, with perhaps 30% of today’s retailers closing shop or selling out to chains like AutoNation in the not-too-distant future, says Dave Zuchowski.

Zuchowski has spent four decades in the auto business, including a run as CEO of Hyundai Motor America. After a few years working as a consultant, Zuchowski took a new assignment last year, signing on as the chief strategy officer for Unite Digital, a startup that works with dealers on the challenges of working in a digital retail environment. He spoke to TheDetroitBureau.com about what he sees coming in the new world of automotive retailing.

Impact of the internet

Shopping online rose during the pandemic, and is likely here to stay.

TheDetroitBureau.com: We see more and more car buyers going online, whether to do their homework or to complete a purchase. What are the challenges for dealers?

Zuchowski: Inertia is a huge issue. Dealers are resistant to change because it’s a high-dollar, top-line business. If all else fails, revenue cures a lot of evils. So, they’re very reluctant to change because what they’ve had has worked for a very long time. They’re very reluctant to walk away from what worked and that, to me, is the biggest problem. (But) what really matters is what the consumer wants and the biggest change is that they’re not putting up with what we put up with all these years.

TDB: COVID clearly sped up change on the retail side, didn’t it?

Zuchowski: You have all the overlying conditions (for change) and what happened is that dealers reported record profits in the midst of the pandemic. They went through the process, line by line, and they renegotiated costs. They consolidated jobs and responsibilities. They cut back on inventory. They flattened and streamlined the organization. That happens in a downturn. But what surprised everybody was that consumers really turned out to like shopping at home, having a single point of contact and contactless delivery and concierge services, all the things that came out of necessity.

Dealers saw marketing and inventory costs come down and that let them have very targeted, customized marketing campaigns rather than broad-based campaigns that are extremely expensive and pressure margins and do bad things. They went from a supply-side model to a demand-side model. And they realized that though volume went down, margins came back up. People are willing to pay more for that personal touch, even as expenses go down. Dealers have done this before when the economy goes down. The difference is that this time, with COVID, customers responded very favorably.

More and more dealers are bolstering their online sales resources.

TDB: So, will the car business go the way of Amazon, with everything done online?

Zuchowski: Digital retailing doesn’t mean 100% of the people will do 100% of the transaction online. It means we need to create a parallel path, replicating every sales process that can be done in the store and make it available online. Then you let the consumer decide how much to do in the store and how much to do online. I don’t think 100% will want to do everything online but I think it’ll be the distinct majority in the not-too-distant future. I’m talking three to five years.

Other changes in retailing

TDB: It’s not just the pandemic forcing change in automotive retailing, though. What about the coming age of the electric vehicle? We’ve seen Volvo, for one, say they expect to sell all their future battery-electric cars entirely online.

Zuchowski: The traditional retail model has been push, rather than pull. It’s supply, rather than demand oriented. In other industries, it’s completely the opposite. Traditional dealers have a lot of staff. They’re top heavy, with an average of two managers for every sales person. It’s a structure that’s very expensive and no longer what the consumer wants. They want a single point of contact. They don’t want to go into a store and deal with a salesperson, then negotiate with somebody else and then deal with somebody handling (finance and insurance). They want someone who can handle things, soup to nuts.

TDB: They also want a set, single price, don’t they?

Nissan@Home now allows consumers to handle the entire purchase of a new vehicle online.

Zuchowski: I think “one price” is a misnomer but we certainly have to decrease the variability between transaction prices. Customers know from the internet what a dealer paid for the vehicle so there isn’t nearly as much dependence on negotiations.

The dealership of the future

TDB: What does this mean in terms of the number of dealerships going forward and the number of employees?

Zuchowski: A great question. I firmly believe the 30% of dealers who don’t get it and are slow to react will go out of business or get consolidated. The new number will be 70% of what we have today.

When I started out in 1980 there might have been 24,000, maybe 25,000 dealers and now there’s 17,000. (Long term) it’s probably closer to 12,000. You’ll have dealers controlling entire market areas with one central facility and maybe inventory in a storage area, service in a commercial area and maybe a few boutique-style showrooms in high-traffic areas. You’ll have fewer stores with smaller inventory, fewer service bays. The stores will look different and they’ll go to different locations for different functions. There’ll be fewer individual owners and more dealer groups owning a bunch of stores.

TDB: Will things be different for those dealers who remain?

All pure electric Volvo models to be available online only

Zuchowski: There’s always going to be an important role for the dealer in this country. But that role will change. Dealerships essentially will turn into delivery and service centers. I would be very reluctant to make huge investments if I were a dealer, say, for a new, $5 million facility. The way a dealer will make money down the road will change. And there will different ways to get revenue. But even with volumes going down, margins could go up. They won’t have to carry 1,000 cars in stock and spend $100,000 a month on advertising, for one thing.

TDB: Let’s wrap up by talking used versus new.

Zuchowski: It’s a mistake not to look at the business holistically. Every year about 45 million to 50 million vehicles are being sold and when new cars are doing well used cars are off. And when used cars are doing well new car sales are off.

We’ve had an affordability problem for some time but there’s always been a way around it. We’ve now stretched out payments as far as you can go. And we’ve played with rates, now with the lowest interest rates on record. How many people can afford a $40,000 vehicle, especially if your interest rates aren’t at zero percent? Now, all the new technology isn’t free and there are all the regulations to comply with, and you have to add all that to the price of a vehicle. But we’re running out of ways to manage payments. I think used will gain more steam because new vehicle affordability will become a bigger and bigger problem as interest rates go up.

Angry Shareholders Sue Lordstown Motors

March 22, 2021 admin

Lordstown Motors CEO Steve Burns is named in the recently filed lawsuit against the EV startup.

Angry shareholders filed at least three lawsuits against Lordstown Motors for fraud in U.S. District Court, demanding compensation from the cash reserves the company says it is planning to use to launch its battery-electric pickup truck this fall.

The startup company, housed in an old General Motors plant to produce its truck, has yet to file a response to any of the lawsuits. The first suit against Lordstown was filed March 18.

The lawsuits, which was filed in the U.S. District Court for the Northern District of Ohio’s Youngstown Division, comes on the heels of disastrous week for the fledgling electric vehicle company. It began with the devastating research report by Hindenburg Research that sent the company’s stock tumbling.

The company followed that with an unsatisfactory earnings call during which the executives failed to answer the issues raised in the report.

Plaintiffs hit EV startup hard

Burns said during the company’s earnings call he believed his company was the only one to begin automated assembly this early in the pre-production process.

The lawsuit, filed on behalf of Matthew Rico, who identifies himself as Lordstown shareholder, “Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company’s purported pre-orders were non-binding; (ii) many of the would-be customers who made these purported pre-orders lacked the means to make such purchases and/or would not have credible demand for Lordstown’s Endurance; (iii) Lordstown is not and has not been ‘on track’ to commence production of the Endurance in September 2021; (iv) the first test run of the Endurance led to the vehicle bursting into flames within 10 minutes; and (v) as a result.”

Rico also is asking that his lawsuit be certified as a “class action” that would cover all of Lordstown shareholders damaged by the company’s misconduct.

Hindenburg Research, a short-seller group, claimed the EV truckmaker either faked or overstated claims that it has advance orders for 100,000 of the electric pickups it plans to launch later this year. Further, the group described Lordstown CEO Steve Burns as a “con man.”

The tenor of the Hindenburg report echoes a study it put out last year on Nikola Corp., which also used a SPAC deal to go public, initially generating a big run up in its share price while also lining up a proposed alliance with General Motors.

Lawsuit targets Lordstown executives

CEO Burns expressed enough confidence in his team that he upped the expected production levels to 60,000 units.

The lawsuit names several Lordstown executives, starting with CEO William Burns, as defendants. The suit is built around the statements, including documents the company filed with the Securities and Exchange Commission and various press releases by the company that “were materially false and misleading at all relevant times.”

“The Individual Defendants, because of their positions at the Company, possessed the power and authority to control the content and form of the Company’s annual reports, quarterly reports, press releases, investor presentations, and other materials provided to the SEC, securities analysts, money and portfolio managers and investors,” contend in the filing.

Instead, the lawsuit said Lordstown executive “authorized the publication of the documents, presentations, and materials alleged herein to be misleading prior to its issuance and had the ability and opportunity to prevent the issuance of these false statements or to cause them to be corrected,” going back to when the company went public via a SPAC in August 2020.

The SPAC generated $675 million in cash, money it is using to finish development of its new Endurance model. Lordstown officials claimed they received more than 100,000 non-binding production reservations from commercial fleet users, which the aforementioned Hindenburg report contends is untrue.

The lawsuit added the defendants from Lordstown “knew that the adverse facts” had not been disclosed and were being concealed from the public and that the positive representations being made were false and misleading, making them liable for damages suffered by shareholders.

Jeep Brings Back the Legendary Wagoneer and Grand Wagoneer

March 11, 2021 admin

The legend is back for 2022. The Grand Wagoneer returns to the Jeep line-up after more than three decades away.

The Jeep Wagoneer and Grand Wagoneer are back – and luxurious.

The long-awaited debut of what will now be the brand’s flagship model is scheduled to take place in Los Angeles Thursday morning and what awaits those who turn is a full sized, 8-passenger luxury vehicle ready to challenge names like Navigator and Escalade, among others, for the big dollars spent in the segment.

“We announced we were going to bring an American icon back and expand it into the premium world,” said Christian Meunier, Jeep brand CEO, during an earlier background webinar about the vehicles. The new models, aside from the names, share very little in common with their predecessors. The original Wagoneer was a go-anywhere and haul a lot of stuff while doing it vehicle.

The new Wagoneer and Grand Wagoneer are supposed to deliver a unique customer experience, separate from their more rugged, off-roading siblings. Thee models are not “simply another Jeep,” Meunier explained. They’re definitely not as these are the first Jeeps that are not trail-rated, although officials attribute that to the size of the vehicle more so than their capability.

It’s a new day for Jeep

The new 8-passenger full-size SUV sets a new benchmarked for the Jeep brand.

The new models are “born from Jeep, but their character is different from the rest of the brand,” he said, noting their development stems from the four C’s: culture, consumer, category and character. The culture comes from the brand’s history of innovation and craftsmanship Jeep looks to replicate with the new models. The company targeted a specific type of buyer — the consumer — for the new luxury utes.

“These people live life to the fullest. They enjoy every bit of it. They don’t let friends, status symbols or someone else’s expectation define them, or limit them,” Meunier noted. “No, they are in charge, and they are free. They are free to follow their own path and change it as many times as they want. They don’t seek the perfect life.

“Perfection to them is cold, because it is something unremarkable rational and repeatable. Their life is beautiful because it’s unique, it’s emotional and it’s intense. In a collection of imperfect moments that become memorable experiences. When you leave such a fulfilling life you choose a vehicle with a personality.”

Jeep achieved “category,” the second C, a long time ago as the Wagoneer was a founding father of the large, sport-utility segment. The name carries with it a certain connotation or expectation. The company is confident the new versions of the vehicle will carry forward a unique and notable reputation like its ancestors, but different.

Volkswagen Ponders Porsche Offering to Fund EVs

February 18, 2021 admin

Volkswagen reportedly is considering an offering of Porsche stock to help fund its $86 billion EV plan.

Bringing EVs to market costs big money, forcing some automakers to go public to raise cash – Volkswagen possibly being next.

Reports suggest that VW is pondering a listing of Porsche AG. The money raised designed to help with the roll out more than $86 billion in electric vehicles set to come mid-decade. German business publication Manager Magzin reported the plan is only in the discussion stage.

The listing, which reportedly could net as much $30 billion, would only be for part of the sports car maker and wouldn’t occur until next year, the publication reported. Some analysts believe if Porsche AG were to be spun off entirely it could be worth more than $120 billion.

Volkswagen’s not alone

VW says it will roll out 50 electrified vehicles across all its brands by 2025.

The rumor comes on the heels of Daimler AG’s move to separate its truck unit into its own separate company in the third quarter of this year. The idea is to “unlock the full potential” of the businesses, which some analysts believe means some sort of offering to raise cash.

Once the split occurs, the car unit will need to fund its ongoing expansion of its electrification effort and that could conceivably come in the form of issuing new shares. The new business will be named Mercedes-Benz AG.

Plenty of other automakers have benefitted from IPOs, notably Ferrari and Aston Martin. However, with the influx of new EV makers moving closer to production around the world, the final push to the finish line requires a massive amount of cash.

EV makers raising money

Nascent electric vehicle companies have been scurrying around looking to add more money to their coffers, the latest company added to the list is Rivian. The company raised more than $8 billion from private investors since the start of 2019, including a recent round netting the company $2.65 billion in fresh money.

Volkswagen has designated $86 billion to bring more than 50 EVs to market in the next few years, including the ID.4.

However, as the company is closing in on building pre-production and early run production electric trucks and SUVs at its plant in Normal, Illinois, the idea of having enough liquidity to get through the process must weigh heavy on the top minds there.

With all of the other EV makers raising money through reverse mergers with blank-check companies and getting listed and a fat check, Rivian appears to be on board. Reports suggest the company is preparing for a conventional IPO this fall that could net it as much as $50 billion.

Other EV companies that have secured additional funding through offerings include Fisker, Lordstown Motors, Faraday Future, Lucid Motors and Nikola Motors. Also, the king of EV mountain repeatedly offered new shares to raise funds.

Stellantis Enjoys Warm Welcome from European Investors

January 18, 2021 admin

Stellantis Chairman John Elkann is meeting with the media tomorrow to talk about the company’s future.

Not every merger involving an automaker these days involves a blank-check company. The newly minted tie-up between Fiat Chrysler Automobiles N.V. and Peugeot S.A. was finalized over the weekend and the resulting company, Stellantis N.V., is enjoying a warm welcome.

At least on the stock market.

The new company’s stock trades on three exchanges and it finished the day on the Paris exchange up nearly 7%, closing at €13.14. It also jumped up 7.7% on the Milan exchange.

The New York Stock Exchange, the third exchange it’s traded on, was not open today due to the Martin Luther King Jr. holiday.

(Chrysler is no more as Stellantis comes to life.)

CEO Carlos Tavares has a lot on his corporate plate now that the merger is complete.

The $52 billion merger of near equals creates a massive enterprise with operations on six continents, employs about 400,000 people, sells – at least for the time being – 14 vehicle brands and sells 8.1 million vehicles annually, making it the fourth-largest automaker in the world behind Volkswagen, Toyota and the Renault-Nissan-Mitsubishi Alliance.

With all of those possibilities, it’s going to take a press conference Tuesday to start revealing what Stellantis will look like now that’s it’s a living, breathing entity. What brands will stay? How many workers will keep their jobs?

People are nervous because the CEO of the new enterprise, Carlos Tavares, has a history of being fearless when it comes to eliminating unprofitable operations and processes in the pursuit of corporate profit. One need only look at how what he did with former General Motors’ subsidiary Opel. A money-loser for a decade, he had it in the black in one year.

(FCA CEO Manley gets new assignment following Stellantis merger.)

“Stellantis faces a mixed outlook as U.S. stimulus plans may buoy Chrysler vs. a more uncertain outlook for Peugeot in Europe,” Michael Dean, BI automotive analyst told Bloomberg. “Former PSA CEO Carlos Tavares takes the helm and, similar to his handling of PSA’s takeover of Opel in 2017, we anticipate a new strategy in the first 100 days of his stewardship. All regions face a difficult 1H amid continued lockdowns.”

Quirky name aside, investors gave Stellantis a warm welcome when it began trading Monday.

The two companies have worked to allay fears of major cutbacks in France and Italy. While top managers have outlined plans to trim costs by $6 billion following the merger, they insist they will be able to do that without closing any plants. They have outlined 40% of those cost savings coming from purchasing, 40% from combining product development efforts, and 20% from marketing and other operations.

However, it’s unclear how Tavares plans to tackle other issues such as improving the company’s performance in China, the world’s largest automotive market, and bolstering its electrification efforts, especially in the aforementioned China as well as in the U.S. Just addressing those two issues are likely to require billions of dollars and euros. Some of plans for these things and more may get touched on Tuesday, Marco Santino, a partner at consulting firm Oliver Wyman, told Reuters.

(Fiat Chrysler and PSA not exactly a “merger of equals.”)

“He has proven to be the kind of person who prefers action to words, so I don’t think he will make loud statements or try to over-sell targets,” he said.

FCA-PSA Set to Kick Off New Year With Completion of Merger

January 4, 2021 admin

Fiat Chrysler and PSA shareholders are expected to approve the merger of the two companies forming Stellantis, the world’s fourth-largest automaker.

This story has been updated to reflect the merger’s approval in separate votes by Fiat Chrysler and PSA investors.

The deal is done; shareholders at both PSA Group and Fiat Chrysler Automobiles now have voted to approve a merger creating the world’s fourth-largest automaker by sales volume, Stellantis.

Shareholders overwhelming approved the deal that was first announced in late 2019 — but only received final regulatory approval late last year. The $58 billion deal won an “Aye” vote from 99.15% of FCA shareholders, while 99.85% of PSA investors approved of the deal during an online meeting. Following the vote, the two companies said the merger process is expected to be completed by January 16.

Officials with the two companies have promised that the merger will yield a significantly stronger automaker, helping drive down manufacturing costs while also making it easier to prepare for the many changes set to sweep through the auto industry in the coming decade, notably the shift to electrified and autonomous vehicles. But the merger also raises numerous questions, starting with the broad range of brands each of the new partners bring to Stellantis. There has been widespread speculation that the new company could eliminate some of the weaker marques, including FCA’s namesakes, Fiat and Chrysler.

(FCA CEO Manley won’t be on the board after merger with PSA is completed.)

Carlos Tavares, PSA (left) and Mike Manley, FCA, shake hands following the signing of the merger agreement between the two companies in 2019.

“Stellantis will be a sort of conglomerate of brands, some great and some not so good and most very regional,” wrote Jefferies analyst Philippe Houchois. “The merger will be a good opportunity for a reset.”

The auto industry has been facing enormous pressures in recent years and FCA’s former CEO, the late Sergio Marchionne, began looking for an additional alliance partner even before completing the merger that formed Fiat Chrysler Automobiles a decade ago. During his tenure the plan was rebuffed by some of the industry’s giants, including Volkswagen and General Motors. It was Marchionne’s successor, Mike Manley, who took things a step further.

Manley came within hours of completing a merger with the largest French automaker, Renault, but the deal unraveled just before it was set to be announced. Months later, FCA made the surprise announcement that it was talking with PSA, parent of brands including Peugeot, Citroen, Opel and Vauxhall.

A formal plan was announced in December 2019 but it faced a variety of challenges, including issues raised by the coronavirus pandemic. Nonetheless, the process moved forward, the proposed partners clearing the last regulatory hurdles as 2020 drew to a close.

Under the agreement, FCA’s Chairman John Elkann – heir to Fiat’s founding Agnelli family – will retain that title at Stellantis. So too will Carlos Tavares, the highly regarded CEO who has been credited with turning around the French company since joining it six years ago, keep his role. Significantly, PSA was able to put the Opel/Vauxhall unit into the black

FCA CEO Mike Manley will not retain a seat on the board of directors after the merger.

within a year after acquiring the German-based operation from General Motors. Under GM, Opel had been in the red for nearly two decades.

(FCA, PSA pick name for post-merger company: Stellantis.)

Nonetheless, PSA has plenty of challenges of its own. Among other things, it is trying to find the formula for returning to the critical U.S. market it left nearly three decades ago.

As Stellantis, the new enterprise will need to move quickly to catch up with key competitors racing to bring electric vehicles to market. These include not only established manufacturers such as VW and GM but new entrants like Tesla and Lucid.

The partners set some tough goals going into the final phase of the merger. Early on, officials estimated they could squeeze out savings of 3.7 billion euros, or $4.5 billion, through various efficiencies. They later upped that to 5 billion euros, or about $6.1 billion. But the pandemic has made the business of forecasting, whether unit sales, revenues or earnings, exceedingly difficult. And the expectation of analysts, such as IHS Markit, is that it will take to nearly mid-decade before global sales come close to pre-pandemic levels.

The industry has been seeing an acceleration of mergers, acquisitions and less overarching joint ventures and alliances in recent years. But FCA provides a textbook example of how they don’t always pan out. The U.S. side, Chrysler entered into a supposed “merger of equals” in 1998 but, a decade later, found itself discarded by the German side of DaimlerChrysler AG. It would have been allowed to go bankrupt by the Obama administration in 2009 were it not for Fiat pulling together a rescue plan.

Fiat Chairman John Elkann will retain the same role in a merged company.

Then, under CEO Marchionne, FCA spent years chasing an even bigger alliance.

Curiously, the company that originally defined the concept of “bigger-is-better” reversed course following its own brush with Chapter 11. GM not only sold off the endlessly struggling Opel unit but also pulled out of an assortment of once important markets, including Australia, Russia and South Africa. After the formation of Stellantis, GM will slide back one spot and become only the world’s fifth-largest automotive manufacturer.

(FCA, PSA formally lock merger into place.)

“The auto industry has been chasing size and consolidation for years, but it’s been slower in coming than many would like to see,” Jefferies analyst Philippe Houchois told investors. “The question is whether GM, Toyota and Renault-Nissan have provided evidence that there may be limits to this strategy.”

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