Rivian Won’t Join The EV Price War Anytime Soon
Happy Wednesday! It’s August 9, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are all the important stories you need to know today.
Tesla’s Cybertruck Is Really Late to the Electric Party
1st Gear: Don’t Bank On A Rivian Price Cut
Ever since Tesla started slashing prices for its electric vehicles, carmakers around the world have been following suit, sparking something of a price war among EVs. Following in the footsteps of Tesla, Ford slashed prices of its Mustang Mach-E and Lucid announced cuts for its Air sedan. But now there’s one EV startup that won’t be taking Tesla’s lead: Rivian.
According to company boss RJ Scaringe, demand for the automaker’s electric pickup and SUV is “strong” and Rivian sees no need to cut its prices anytime soon. Reported by Automotive News, the company boss said he feels “very confident in the continued backlog,” Rivian faces, which currently leads through 2024. The site reports:
“We take a very methodical and thoughtful approach to how we look at our vehicle pricing,” Scaringe said, pointing to vehicle configurations that can significantly raise or lower the price, creating a broad price band for the R1 products.
“As we think about the positioning of the product, the capabilities of the product — on-road, off-road, dynamically — and the feature set that’s in the vehicles, we feel quite comfortable with the positioning of what we’ve done,” Scaringe said in response to an analyst question about price-cutting.
As it stands, the automaker’s models currently start at $74,800 for the R1T pickup truck, and $79,800 for the R1S SUV.
With prices set at this level for the foreseeable, the EV startup has raised its projections for 2023, when it expects to produce 52,000 vehicles over the course of the year. That’s up from the 50,000 units it projected earlier this year.
2nd Gear: UAW Trashes Stellantis’ Latest Offer
The United Auto Workers is currently caught up in bargaining between the big three automakers as it fights for a new contract for workers at plants across the U.S. After outlining its ambitions for the talks last week, which included pay rises across the board and a switch to a four-day working week.
But now, union boss Shawn Fain has shared the response from Jeep owner Stellantis, which it’s safe to say he isn’t all too impressed with. As reported by the Detroit Free Press, Fain has taken the contract proposals from the Chrysler and Dodge owner and thrown them into the trash. The site reports:
Fain, a populist leader elected by members in January, hosted a “special bargaining update” to voice anger about Stellantis and warn the other Detroit Three automakers in the midst of negotiating a four-year labor contract.
Fain said Stellantis seems disinterested in addressing wage disparities among factory workers.
“Stellantis isn’t listening,” he said. “Stellantis knows our members deserve more.”
In an update to union members streamed live on Facebook, Fain explained that Stellantis refused to “take seriously” UAW demands. Instead, it came to the table and proposed cuts to medical coverage, reduced vacation days for some workers, expanded its ability to force workers into overtime, and cut 401(k) contributions. Not good.
The UAW contract with Ford, GM and Stellantis expires on September 14, so there’s still time for the parties to reach a middle ground. But this sounds like a rocky start for sure.
3rd Gear: Things Don’t Look Good At Lyft
Remember a few years ago when everyone was talking about how great it was that Airbnb didn’t own any holiday homes, WeWork didn’t have a single office to its name and companies like Lyft and Uber didn’t own any taxis? Well now, the struggles of these businesses are plain to see.
At ride-sharing app Lyft, investors have new doubts about the company’s future as it chases to compete with arch rival Uber. In a new report from Reuters, the site warned that shares have dropped seven percent after the company announced it was focused on “competitive pricing to gain market share,” which Reuters claimed could “muddy its path to profitability.” The site reports:
“While Lyft appears to be regaining ground with a more competitive offering, the profit outlook in the out-years remains murky,” said BTIG analyst Jake Fuller.
Uber (UBER.N) said last week that its rider volumes were back to pre-pandemic levels in North America on an industry-wide demand uptick due to a gradual return to work and travel demand.
Meanwhile, Lyft’s pricing strategy, which rendered average per-mile fare to be 10% lower when compared with last year, helped the number of active riders on the platform grow about 8% in the quarter.
What’s more, the report warns that Lyft hasn’t managed to diversify its business in the same way that Uber has, which also offers freight options and food delivery as well as its signature taxi service. In its back pocket, Lyft has its scooters and bikes unit, but in New York the future of its deal with the CitiBike scheme is also looking rocky.
After the drop in share price as a result of the news, Lyft shares now sit at around $11.
4th Gear: Things Do Look Good At Honda
But if Lyft is the bad news bear today, things are looking much better for Honda, which just posted a 78 percent rise in quarterly profits.
According to Reuters, the Japanese automaker said its operating profit reached 394.4 billion yen ($2.76 billion) for the three-month period through June 2023. The rise was attributed to increased sales in the North American market and a weaker yen. Reuters reports:
Like other automakers, Honda said it benefited from strong sales to retail customers in the key U.S. market, posting a 44.7% year-on-year jump to 347,000 units, as the impact of post-pandemic disruptions in the supply of parts and chips eases.
That contrasted sharply with a steep 5% drop in sales in China to 309,000 vehicles that Honda reported for the quarter, faced with growing local competition and a rapid shift to electric vehicles in the world’s biggest car market.
Despite facing challenges in China, Honda maintained its forecast for the year, including a targeted operating profit of 1.0 trillion yen – which is about $7 billion.
Reverse: Way To Make An Exit
Neutral: Enough Pickup For Me
Hello, how are you? Been up to anything exciting? I’m back home after a hefty drive through Washington, Idaho, and Montana in a pickup truck. It was my first time driving one and, I’ll be honest, after 1,000 miles I still don’t get it? Can anyone explain the appeal?
