Lucid Is Raising Prices After Posting Another Big Loss
Photo: Lucid
Lucid is raising prices, Tesla is trying to build more cars in China, and GM is pushing its new used-car platform. All that and more in The Morning Shift for May 6, 2022.
1st Gear: Lucid
The electric car startup Lucid said Thursday that it lost tens of millions of dollars in the first quarter of 2022. Perhaps related, Lucid also said that it would be raising its prices. Via Lucid’s website, here are the prices as they are listed at this very moment:
Screenshot: Lucid
And here’s what Lucid says they’re are going to be in June:
As of June 1, new reservations will be priced in the U.S. at $154,000 for Air Grand Touring, $107,400 for Air Touring and $87,400 for Air Pure.3 The price for the new Lucid Air Grand Touring Performance model, announced just two weeks ago, will remain priced in the U.S. at $179,000. These prices are for base models, before the potential $7,500 U.S. federal tax credit, and excluding tax, title, license, options and destination fees. Updated pricing for Canada will be available on Lucid’s website, www.lucidmotors.com/en-ca, on June 1, 2022.
Lucid said the increased prices are in large part a function of supply chain issues.
“We also announced today that we are increasing prices of our vehicles that will go into effect at the beginning of June. The world has changed dramatically from the time we first announced Lucid Air pricing in September 2020, but I want to reassure our existing reservation holders that we will be honoring current pricing for them as well as for any new reservations made before the end of the month,” [CEO Peter Rawlinson] added. “Looking forward, we remain intently focused on ramping production and are excited about our product roadmap in 2022 and beyond with Air Grand Touring Performance deliveries expected in June; Air Touring and Air Pure later this year; and with our Project Gravity SUV remaining on target to begin production in the first half of 2024.”
The Lucid Air is a good car and worthy Tesla challenger, and also Lucid is sitting on $5.4 billion in cash, so don’t expect the brand to be going anywhere soon. My question, as always, is whether buyers at this price point even notice another $10,000 or $15,000.
2nd Gear: CarBravo
There are seemingly a million different used-car platforms these days if you’re in the market for buying or selling a used car, a market that has exploded for months because of the scarcity of new cars. And, for years, major automakers were never really interested in the used car market, because major automakers are in the business of selling new cars, and selling used cars is a business for dealers and auction houses and Craigslist urchins.
Except now, with the used market hot and new players like CarMax and Carvana lurking, major automakers, possibly out of boredom, seem interested in used cars. Or at least GM does, out with a new used-car selling platform called CarBravo, which is in pre-launch mode. A GM executive told Automotive News that he likes the way things are shaping up with it so far.
More than 800 dealerships have signed up for CarBravo since GM announced the platform in January, and Steve Carlisle, president of GM North America, hopes that count grows to at least 1,200 before the automaker begins opening regional distribution centers this summer.
The automaker plans to fill the regional centers with eligible GM-brand and non-GM used vehicles to expand inventory available to participating dealers.
“That’s very good coverage if you compare us to Carvana, CarMax or the like,” Carlisle told Automotive News.
Cox Automotive estimates that half of all used retail sales — or about 10.6 million vehicles — were sold by franchised dealers last year. GM aims to list up to 80,000 vehicles on CarBravo this year, spokesman Sabin Blake said.
One aspect of this that I am actually pretty interested in is a possible used-car subscription service, though that sounds like just the beginning of subscription services.
Over time, GM plans to sell software and subscriptions to used-vehicle buyers, as it aims double revenue to $280 billion by 2030 from its five-year average of $140 billion. It expects software and other new businesses to grow nearly 50 percent annually through the end of the decade.
CarBravo “gives us another connect point from a consumer point of view,” Carlisle said.
The automaker can market OnStar and OnStar Insurance, for instance, to GM and non-GM used-vehicle buyers through CarBravo. Eventually, when vehicles in the used fleet have the technology to enable GM’s Super Cruise driver-assist system, GM will be able to offer that feature to customers, along with the over-the-air updates that come with it.
When GM announced CarBravo in January it said it would launch sometime this spring, though if you go to its website, it doesn’t seem up and running just yet. Even when it does, obsessively crawling through Craigslist will likely remain the best used-car buying option, for those with the constitution.
3rd Gear: Tesla Is Trying To Get Back On Track In China
Tesla’s plant in Shanghai has reduced production over the past several weeks because of pandemic lockdowns there, but by mid-May it plans to get back to pre-lockdown production levels, with the help of Chinese authorities.
According to Reuters:
Tesla, which is now only running one shift, plans to add more at its Shanghai plant from May 16 to achieve the goal, the memo reviewed by Reuters showed.
That would bring weekly output to 16,900 vehicles based on Tesla’s established work week at the facility, according to Reuters calculations.
There is some suggestion here that Chinese authorities are playing favorites.
Tesla assembled 55,462 vehicles in March at its Shanghai plant when it paused production for six days in the month, data from China Passenger Car Association showed.
The reopening of its Shanghai factory was heavily publicised by state media and was undertaken with the support of authorities who helped Tesla transport more than 6,000 workers and carry out disinfection work, Reuters reported this week.
Tesla’s progress, however, comes as a survey showed that Japanese companies are struggling to reopen factories in Shanghai, indicating difficulties with the municipal government’s push to help key businesses get back to work.
Tesla CEO Elon Musk has always described the China factory as the least headache-inducing, compared to its factories in California, Germany, and Texas. At issue, usually, is Tesla’s relationship with governments.
4th Gear: CATL, Which Makes Batteries For Tesla, BMW, And Ford, Is Planning Battery Factories In The U.S.
Reuters has the hot exclusive.
Contemporary Amperex Technology Co (CATL) is in talks to open plants that would serve BMW AG (BMWG.DE) and Ford Motor Co (F.N), and potential sites include South Carolina and Kentucky, where those automakers have assembly plants, according to [two people with knowledge of the plans], who asked not to be identified because the talks are ongoing and private.
In the case of the potential South Carolina plant, the goal would be for battery production to begin in 2026, one of the sources said. BMW is already a customer of CATL.
CATL, whose other customers include Tesla (TSLA.O) and Volkswagen (VOWG_p.DE), declined to comment.
Chairman Zeng Yuqun said on Thursday the company was exploring possibilities to localize production for overseas automakers in their countries.
[…]
BMW said in a statement that it was “intensively examining the possibility of establishing a battery factory” in North America and buying battery materials in the region. “We are in talks with several partners about this,” the company said.
Ford, which declined to comment, announced plans last September to build two battery plants, jointly owned with SK, in Glendale, Kentucky. Ford also has two vehicle assembly plants in Louisville, Kentucky.
If you are one of those people that prefers to pretend like EVs don’t exist, that is fine. But every major automaker is making large bets otherwise.
5th Gear: Stellantis Won’t Split Its EV And Gas-Engine Businesses
This has been sort of mini-trend among automakers, from Ford to Mahindra. Stellantis said Thursday that it wouldn’t be following suit.
From The Wall Street Journal:
The chief financial officer of auto-making giant Stellantis STLA -4.89%▼NV said he doesn’t see a need to separate out the company’s electric-vehicle business, adding that there are benefits to sticking with a unified operation.
In a call with analysts Thursday, Stellantis CFO Richard Palmer said the company isn’t anticipating any big structural changes as it boosts investment in EVs, in part because the cash flow generated by its gas-engine vehicles is critical for funding the technological transition.
[…]
“I don’t honestly see huge benefits to doing that,” Mr. Palmer said. “I think we need to manage the company and the assets we have through this transition.”
The WSJ story, written by someone named Fyan Relton, also notes that Stellantis CEO Carlos Tavares had previously mocked Ford’s move as being for investors and not for consumers, which might have been news to Stellantis’s investors, who might appreciate someone in Tavares’s position looking out for them.
Reverse: Handsome Harry
Neutral: How Are You?
Alternate side parking two days a week was recently reinstated in New York, which made a lot of people mad, because before it was incredibly inexpensive and easy to own a car in New York City or something.
