Author: CNBC Online news

Walmart taps Udelv for latest driverless car tests to deliver groceries

Source: Walmart
An Udelv car that's being used in Walmart's test in Arizona.

Walmart is expanding its tests of driverless cars as a way to get online grocery orders to shoppers' homes more quickly.

The big-box retailer is now piloting a program to use Udelv autonomous-driving vans to deliver fresh groceries in Surprise, Arizona.

“We want to make sure we stay on the cutting edge of grocery delivery by exploring what's new and next,” Tom Ward, senior vice president of Walmart's digital operations in the U.S., said Tuesday in a blog post.

Walmart has already announced other pilot programs with self-driving car companies, including Ford and Alphabet's Waymo. The company plans to end this fiscal year with an online grocery delivery option in roughly 100 metropolitan areas, reaching more than 40 percent of U.S. households. For 2019, it plans to add that to another 800 stores.

There's good reason for retailers to be investing in online grocery delivery.

Online spending by U.S. consumers for groceries is expected to climb 15 percent this year, according to a survey by Brick Meets Click, an advisory group for grocers. That would push the share of grocery sales that take place on the internet to 6.3 percent of overall sales.

Companies that offer delivery and pick-up options for grocery orders should see even bigger growth, Brick Meets Click said. Those retailers' online sales could grow by 25 to 30 percent in 2019. By the end of the year, roughly 90 percent of U.S. households are forecast by Brick Meets Click to have access to at least one delivery or pick-up service for groceries. Other businesses experimenting in the space include Kroger, Whole Foods (via Amazon) and Albertsons.

Earlier this week, Walmart launched a campaign that aired during the Golden Globes and showed famous cars — like the Scooby Doo mystery machine — pulling up to Walmart stores and using its online grocery pickup service. That's also now available nationally.

Walmart's head of e-commerce in the U.S., Marc Lore, recently said the retailer was focused on taking food delivery to the next level, in addition to its driverless car tests. He envisions a day when food will be delivered to shoppers' refrigerators.

Ousted Nissan exec Greg Kelly released from Japanese jail, but Carlos Ghosn still in custody

Kim Kyung-Hoon | Reuters
Greg Kelly, the former deputy of ousted Nissan chairman Carlos Ghosn, is seen in the car, as he leaves after being released from a detention centre in Tokyo, Japan, December 25, 2018.

Former Nissan executive Greg Kelly got a belated Christmas present as he was released from a Tokyo Detention Center overnight after being held for more than a month over corruption allegations.

Kelly was arrested along with Nissan Motor Chairman Carlos Ghosn as they arrived in Japan via corporate jet on Nov. 19. They were accused of a variety of financial misdeeds, including allegations that Kelly assisted his boss in hiding tens of millions in pay.

Though prosecutors in Japan normally have just 10 days to retain a suspect, they found a way to keep the two men in custody by raising new allegations. Kelly's attorneys finally convinced a court to end his detention, and the executive was released on 70 million yen ($633,699) bail. Ghosn remains in detention and won't have a chance for release until Jan. 1.

According to the Associated Press, Kelly, wearing a beige jacket and glasses, walked out of the detention center and into a waiting black vehicle, where he was seated next to his lead attorney. He was expected to be taken to a local hospital for treatment of a chronic neck problem.

In a video appeal for the one-time Nissan executive's release last week, Kelly's wife, Dee, said he suffered from stenosis, a condition in which the spinal cord is compressed and a person can suffer numbness or shooting pain.

“Release Greg and allow him to come home and have the surgery he needs,” Dee Kelly said. “That is our family's Christmas wish.”

Prosecutors attempted to retain Kelly, along with Ghosn, in custody, arguing they are flight risks. The court rejected that argument, but his release comes amid strictures on his movements. It is unclear how long Kelly will have to remain in the country. No trial date has yet been set.

Kelly did not comment to the crowd of reporters who had gathered outside the detention center to witness his release. He did issue a statement, however. “I believe my innocence will be revealed in the trial,” he said. “I would like to have a judgment of non-guilty and restore my impaired reputation, and then return to my family as soon as possible.”

The arrest of the two once high-flying executives took the auto industry by surprise. Ghosn had been credited with saving a near-bankrupt Nissan in 1999. He then knitted together an alliance with France's Renault. With the 2016 inclusion of a smaller Japanese automaker, the Renault-Nissan-Mitsubishi Alliance has become one of the top-three best-selling auto groups in the industry. But the arrests have revealed serious strains between the French and Japanese side of the alliance.

Some skeptics have gone as far as to suggest that corporate politics are playing a central role in the case. Nissan CEO Hiroto Saikawa has made it clear he opposed the full takeover of his company by Renault, which currently holds a 43.4 percent stake in the Japanese partner. Nissan, in turn, holds 15 percent of the French automaker's stock.

Japanese prosecutors have denied those allegations and have, in turn, been expanding the list of charges, particularly those facing Ghosn. He was originally accused of hiding about $36 million in income through 2015, while also misusing corporate funds for, among other things, the purchase of homes in Lebanon and Brazil.

Prosecutors added charges of breach of trust on Friday, allowing them to extend Ghosn's detention until at least Jan. 1. The government has not said if it will then try to continue his stay in custody. The latest charges allege Ghosn shifted personal trades to Nissan to cover losses of 1.85 billion yen ($16.7 million).

Ghosn has indicated through his attorney that he will hold a news conference following his own release and will stress his innocence.

If tried and convicted, Ghosn could face up to 10 years in prison on each of the corruption charges. Kelly faces similar penalties.

Analyst adds Ferrari, Penske to list of top auto stocks for 2019

There is a lot of opportunity in auto dealers, says Consumer Edge analyst
5:08 PM ET Wed, 26 Dec 2018 | 02:48

Brands like Penske and Ferrari could be some of the top auto stocks to buy in the new year, Consumer Edge Research's Jamie Albertine told CNBC on Wednesday.

The automotive research analyst's recommendation follows his November call that higher used-car sales could extend into 2019 “in a major way.”

Carrying a high return on invested capital, or ROIC, Penske Automotive Group has begun moving into the used car retail business, he said. The Bloomfield Hills, Michigan-based company is looking to attract customers seeking value on the used car market, allowing Penske to compete with platforms like Carmax and Carvana, which Albertine said last month has taken advantage of an industry under pressure from tariffs and changing consumer tastes.

“Penske's getting into standalone used sales [with] a lot more force,” he said on CNBC's “Closing Bell,” adding that he has seen a “pivot” among consumers “from new- to late-model used vehicles as the off-lease supply comes back to market.”

Penske shares climbed 2.59 percent on Wednesday amid a marketwide surge, but the stock is down more than 16 percent for the year.

Italian luxury sports car manufacturer Ferrari's stock is another one to watch as the company ramps up production from the 9,000 units it makes annually to north of 14,000 a year, Albertine said. The company is planning to boost car production by as much as 55 percent over the next seven years, he added.

“From a brand perspective, [Ferrari has] one of the most protected customer-loyal brands in the history of luxury, broadly,” he said.

“So, again, focus on quality there, but also some key EBIT margin expansion [and] production expansion, over the … near to medium term,” he said, referring to earnings before interest and taxes, a corporate profitability measure.

Ferrari bounced from a 52-week low Wednesday morning and gained more than 2 percent intraday. The stock is down more than 6 percent from the start of 2018.

Albertine also mentioned General Motors as a stock to watch as the company makes progress in the autonomous vehicle sector with Cruise Automation. Shares of the embattled automaker rose 3.55 percent Wednesday, but have lost over 18 percent for 2018.

Toyota pushes hybrids despite slowing gas-electric auto sales

Toyota

Don't tell Toyota the once hot gas-electric hybrid vehicle is losing its appeal.

The automaker is planning to leverage its dominance in hybrid autos as it grows the number of full- and hybrid-electric vehicles sold in the U.S. and around the world.

“We are working on an entire portfolio of hybrids which we have been selling since 1997, plug-in hybrids, full battery electric vehicles as well as our fuel cell vehicles,” said Bob Carter, executive vice president of sales for Toyota North America. “Those vehicles represent about 9 percent of our sales in 2018. We have set a goal that it will be 15% of our sales next year in 2020.”

Toyota's emphasis on hybrids comes at a time when U.S. demand for the traditional gas-electric vehicle is dropping. LMC Automotive estimates full hybrid sales in the U.S. fell 6 percent last year, while Toyota's hybrid sales dropped 5 percent.

The lower price of gasoline gives potential buyers less incentive to opt for a hybrid over a model powered by an internal combustion engine. Another factor: The growing number of electric models for sale gives eco-friendly buyers the option to plug in and stop pumping gas. In that area, Tesla, not Toyota has become the clear leader.

“Whether it is just sales numbers, whether it is image and awareness and appeal, I think Tesla owns that [the EV market] now,” said Karl Brauer, analyst with Kelley Blue Book. “I think there are plenty of people who wonder if Toyota could or should be further along in the pure electric field.”

Last year, Toyota sold just under 28,000 plug-in electric vehicles in the United States. All of them were the Prius Prime, a plug-in hybrid-electric model. By comparison, the auto website Inside EVs estimates Tesla sold just over 191,000 electric vehicles in the United States. (The company doesn't report specific sales for the country.)

Tesla's lead in electric cars is not insurmountable, but Brauer said it will be “highly difficult” for Toyota to change the perception Tesla is the industry leader in EVs.

Adding to the challenge is the coming wave of electric cars that will give buyers more options. Later this year, Audi will start selling its first full electric model, the e-tron. “Americans are going to want vehicles that are electrified,” Mark Del Rosso, CEO of Audi of America, told reporters last week.

Despite the growing competition and growing questions about their game plan, Toyota executives are undaunted. They are developing full electric vehicles and Carter promises more announcements about future models. But for now, Toyota is leveraging the expertise it developed with the Prius. “That hybrid technology in the short term is the best application for consumers today,” said Carter.

— CNBC Producer Meghan Reeder contributed to this report

Here’s why gas prices are falling, and why drivers shouldn’t get too used to them

Gas Gauge
11:37 AM ET Mon, 31 Dec 2018 | 02:55

Crude oil's sharp fall in 2018 has helped put some extra money in consumers' pockets, in the form of falling gas prices.

According to AAA, nine states saw prices at the pump drop below $2 a gallon late this week, a gift for drivers this holiday season. Over the last 90 days, retail averages have dropped 83 of the past 90 days, with the downward trend expected to continue into early next year, the organization said.

Over the last two years, Russia and the cartel of the world's largest oil producers known as OPEC have been managing the global petroleum supply, in order to rebalance the market after a prolonged and punishing oil price downturn.

While there are many factors driving down energy prices, it raises the question of whether the drop is linked to supply and demand. According to one veteran oil market watcher, a more technical factor could be behind the move.

“I think it's mostly supply and it's something that tends to happen between October and April when gasoline becomes the unwanted hydrocarbon,” said Tom Kloza, global head of energy analysis at fuel price service OPIS.

Kloza explained that during this period, refiners are moving to more profitable diesel, heating oil and jet fuel production, and away from gasoline.

“We just manufacture too much of it,” Kloza told CNBC's On The Money in a recent interview, “and we just came out of a couple months where OPEC producers were producing more crude than what they pledged to in January.”

However, Kloza predicted the low prices at the pump will head back up in the springtime. “I think the bottom line is 2019 and the end of 2018 will be bookended with cheap prices, but in the middle we're going to go considerably higher than that and you've got to be aware of that, ” Kloza told CNBC.

“When the baseball season's on, you're going to see higher prices,” he added. Nevertheless, Kloza predicted that “demand for gasoline is probably going to be flat actually for the next few years. The thing that keeps refiners going is export demand.”

With travelers still hitting the friendly skies, and airlines also deriving a benefit from cheaper fuel prices, Kloza said.

Yet flyers shouldn't get their hopes up for cheaper travel costs.

“Lower jet fuel prices don't mean lower airfares, we've learned that in the last ten years,” Kloza added.

–CNBC's Tom DiChristopher contributed to this report.

On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.

Tesla shares tumble 10% as company misses Wall Street vehicle delivery estimates, cuts prices

Tesla shares tumble after lackluster delivery numbers
12:54 PM ET Wed, 2 Jan 2019 | 01:07

Tesla disappointed investors Wednesday, announcing that it delivered 90,700 vehicles during the fourth quarter — short of Wall Street forecasts despite its efforts to ramp up production.

Tesla also said it boosted production during the quarter, churning out 86,500 vehicles, up from 80,142 during the third quarter.

The electric car maker's shares fell by as much as 10.2 percent in morning trading Wednesday. Its stock rebounded somewhat by the afternoon to about $313 a share, down by about 6 percent from Monday's close of $332.80.

“Tesla shares tend to a have a lot more noise and volatility than most, but we think investors who are willing to take a longer-term view of the story will be rewarded handsomely and continue to believe Tesla is on track to post one of the market's most robust year-over-year earnings increases in 2019,” said CFRA analyst Garrett Nelson.

The company also announced that it's cutting prices on all of its models by $2,000 to help offset a reduction in federal tax credits for drivers who buy electric vehicles. The $7,500 federal tax credit for Tesla cars was cut in half as of Tuesday.

Although the delivery numbers were 2,000 fewer than expected in a FactSet survey of analysts, Wedbush Securities analyst Dan Ives told CNBC they were consistent with his prediction. He said the cut in prices was likely weighing on the stock.

“It was a move that was within the realm of possibility, but it caught investors off guard,” he said.

Bearish investors are likely interpreting the price cut as an attempt to stimulate demand, but Ives said it was more of a way to soften the blow from the tax credit drop.

David Paul Morris | Bloomberg | Getty Images
Tesla Model 3 vehicles are loaded onto a truck for transport at the company's manufacturing facility in Fremont, California, on Wednesday, June 20, 2018.

The company delivered 8 percent more vehicles during the quarter, a new all-time high, but the numbers were fewer than expected by Wall Street. The company said it delivered 63,150 Model 3s, 13,500 Model S sedans and 14,050 Model X SUVs. Wall Street analysts had forecast 92,000 total deliveries — 64,900 for the Model 3, 14,200 for the Model S and 13,600 for the Model X, according to average estimates analysts compiled by FactSet. The numbers vary since FactSet tracks nine analysts on total deliveries, but not all analysts break out the data for each model.

FactSet does not compile average estimates on Tesla's production.

Tesla's own internal tracking of Wall Street analysts show that its deliveries were in line with or above estimates, spokesman Dave Arnold said. The company tracks 22 analysts that forecast an average of 91,046 deliveries during the quarter, according to data compiled by Tesla.

Reuters | Stephen Lam
A tent is seen at the Tesla factory in Fremont, California, U.S. June 22, 2018.

Tesla previously gave investors hope that its production rates would improve, saying that the number of labor hours to build the Model 3 fell by more than 30 percent from the second to the third quarter. The company also told investors in late October that it took less time to build than the Model S sedan and Model X sport utility vehicle — another first for the company.

“We will focus even further on cost improvements while continuing to increase our production rate” during the fourth quarter, the company said at the time.

CEO Elon Musk announced Oct. 23 that the company planned to limit certain options on its higher-end Model S sedans and Model X SUVs to streamline production. The company also announced plans during the fourth quarter to start selling a $45,000 version of the Model 3, before raising the price $46,000. It has yet to produce the base Model 3, which it has promised for a price of $35,000 before incentives.

WATCH:
This man was so fed up trying to get his Tesla fixed that he ended up doing it himself

Tesla owner frustrated so repairs his own Model S and says it's easy as 'Legos'
1:58 PM ET Tue, 28 Aug 2018 | 05:16

Why you should buy a Volvo or an Audi instead of the 2019 Infiniti QX60

Why you should buy a Volvo or an Audi instead of the 2019 Infiniti QX60

Mack Hogan | CNBC

Mack Hogan | @macklinhogan

8:48 AM ET Wed, 2 Jan 2019

Infiniti is often forgotten in the luxury market. Created by Nissan as the Japanese company's premium brand, it plays in the near-luxury space alongside Acura and Buick. One of its most important products is the QX60.
For the many who aren't familiar with Infiniti parlance, the QX60 is the company's three-row crossover that slots between the gargantuan QX80 and the all-new QX50. It's a family crossover aimed squarely at segment stalwarts like the Acura MDX.
There's one problem, though: It doesn't feel like a proper luxury product.

The Good

As first impressions go, the QX60 isn't bad. Despite being the sort of massive crossover that American families crave, it still manages to look svelte. Some credit must go to the combination of gun-metal gray accents and lovely deep Bordeaux paint fitted to $65,930 Luxe model I tried.
I was impressed by creamy leather that's quilted to look more upscale. The breeziness of the cabin is magnified by a light wood trim and moon roofs stretching to the third row, helping the QX60 to feel bigger than it actually is. An accomplishment for sure, as the QX60 is no small beast.

Mack Hogan | CNBC

The third row is suitable for seating adults, while still offering a reasonable 16 cubic feet of cargo space behind the back row. It's also easy to move about the cabin, with seats that fold without any hassle and create large passageways for the kids to pile through.

Mack Hogan | CNBC

Finally, it's hard to complain about the on-board equipment. My tester had rear-seat entertainment, a Bose stereo, heated and cooled front seats, heated second-row seats, automatic emergency braking, adaptive cruise control, automatic high beams, a surround-view camera and the aforementioned surplus of moon roofs. In a three-row luxury crossover, that's not a negligible list of kit for $65,930.

Mack Hogan | CNBC

The Bad

But you can put all the kit you like on a luxury crossover and still get nowhere; it has to feel like a premium product. And the QX60 simply doesn't.
Part of the blame has to be assigned to the working-class roots of the QX60. Underneath, it shares most of its architecture with the Nissan Pathfinder. Plus, we haven't seen an all-new model in over five years.
Neither of those factors is disqualifying in and of themselves. Lexus cars often share bits with Toyota but still manage to feel luxurious, for instance. But the QX60 certainly doesn't. See, offerings from the newest generation of three-row family haulers manage to shrink around you. Buyers don't want to feel like they're commanding a battleship when they're parking outside of Target.

Mack Hogan | CNBC

Yet the QX60 hearkens back to that era. Pulling it into my garage felt like steering a Nimitz-class aircraft carrier through the Panama Canal. On the freeway, it's ponderous and floaty with no discernible connection between the steering wheel and the front wheels of the vehicle. Yes, it's quiet and comfortable, but so are the three-row haulers from Toyota, Mazda, Chevy and even Nissan.
If you're thinking that the tech justifies the price, I'm afraid that isn't the case. While active safety features are on board, they aren't as advanced as the ones on Nissan's Rogue, an SUV that is a full class below the QX60 and doesn't even make an attempt at being a luxury SUV.

Mack Hogan | CNBC

You're also getting a navigation system that was designed during the Bronze Age and that's flanked with acres of gray plastic that has no place in a $65,000 SUV.
As for the powertrain, it's an utterly forgettable combination of Nissan's 3.5-liter V-6 with the company's standard Continuously Variable Transmission (CVT). If there's any life in this engine, the CVT sucks it out.

Mack Hogan | CNBC

Final Thoughts

If you've never driven an honest-to-goodness luxury car, the QX60 probably feels nice. You could probably buy one and be entirely satisfied. But some day, your friend is going to offer you a ride in their new Volvo XC90 or Audi Q7. And when you find out that you could have had one for the same price as your Infiniti, you'll never enjoy it again.
In sum, the QX60 doesn't feel any more special than your run-of-the-mill Highlander, CX-9, Pilot or Durango. In some ways — like in the infotainment department — it's far behind even those choices.
Infiniti, though, charges a luxury price for a definitively mainstream crossover. I suggest you look elsewhere.
Rating:
Exterior: 4
Interior: 2
Driving Experience: 1
Value: 1
Overall: 2
Price as tested: $65,930

Mack Hogan | CNBC

more from Tech Guide

Tesla cuts prices on all models by $2,000 to offset reduction in federal tax credit

Tesla's fourth quarter deliveries 'a big disappointment,' says Gene Munster
9:11 AM ET Wed, 2 Jan 2019 | 07:22

Tesla is cutting the prices on all of its models by $2,000 to help offset a reduction in federal tax credits for drivers who buy electric vehicles.

The $7,500 federal tax credit for electric cars was cut in half as of Tuesday.

The company announced the price cut Wednesday as it released delivery results for the fourth quarter that disappointed investors and sent shares south by more than 9 percent.

Tesla said it made the move to soften the impact of falling federal tax credits. But some bearish investors are likely interpreting it as a move to stimulate demand, said Wedbush analyst Dan Ives.

“It was a move that was within the realm of possibility, but it caught investors off guard,” he said.

Reuters | Stephen Lam
A tent is seen at the Tesla factory in Fremont, California, U.S. June 22, 2018.

General Motors’ US sales slip as it places big bet on pickup trucks

Daniel Acker | Bloomberg | Getty Images
Attendees stand under a General Motors Co. 2017 Sierra 2500 Denali HD pickup truck during the Chicago Auto Show in Chicago, Illinois, U.S., on Thursday, Feb. 9, 2017.

General Motors' sales slipped in the U.S. during the fourth quarter, but the automaker said Thursday there's still strong demand for pickup trucks, sport utility vehicles and crossovers.

The largest U.S. automaker said its Chevrolet and GMC brands led the industry in pickup sales for the fifth-consecutive year.

Overall, U.S. sales fell 2.7 percent during the fourth quarter of 2018 from a year earlier, the Detroit automaker said.

“We feel confident heading into 2019 because we have more major truck and crossover launches coming during the year and the U.S. economy is strong,” said Kurt McNeil, U.S. vice president of sales operations at GM.

The sales figures are the automaker's first such report since GM announced plans to cut 14,000 jobs amid waning consumer demand for passenger cars. GM plans to shift more of its production toward trucks, SUVs and crossovers, which are currently more popular than ever among buyers. These vehicles tend to fetch higher prices (and bigger profits) for automakers, which GM desperately needs as it sinks money into new businesses such as ride sharing, and new technologies such as self-driving cars.