James DysonLarry Busacca | WireImage | Getty ImagesDyson, a British manufacturer best known for vacuums, fans, air purifiers and hand dryers, could add electric vehicles to its product portfolio, the company confirmed this week, releasing images of new patents it has received.
“We've been researching motors, batteries, aerodynamics, vision systems and robotics for 22 years. Now the time is right to bring all our knowledge and experience together into one big project – an electric car,” founder and CEO Sir James Dyson said in a statement on the company's website.
The UK firm has been dropping hints of its interest in electric vehicles since mid-decade, last November revealing plans to set up an assembly line in Singapore, with Dyson indicating the project will cost around $2.7 billion to bring to market.
The patent images, among other things, show what looks like a three-row crossover-utility vehicle that follows the latest industry approach to electric vehicle design, with its battery pack and motors mounted below the floorboards. But while the patents “provide a glimpse” of what the company is working on, the Dyson founder wrote that they “don't reveal what our vehicle will really look like or give any specifics around what it will do.”
Launched in 1991, Dyson Ltd. today offers a broad array of products, mostly consumer household goods like the vacuums and fans that are widely advertised. But Dyson has done little to hide his interest in getting into the auto industry.
In 2015, he underscored his commitment with the purchase of Michigan-based Sakti3, a start-up that was developing a new type of battery known as solid state. Proponents contend the technology could offer significant advantages over the more familiar lithium-ion technology in widespread use today by boosting range and reducing charge times, particular pluses for electric vehicles, but also useful for the cordless appliances Dyson has been shifting towards.
Questions about the vehicle program cropped up last year when Dyson wrote off £46 million, or about $60 million, of its £58 million investment in the University of Michigan spin-off due to problems with the technology. But it subsequently announced new details that made it clear the automotive venture was moving forward. That included word that it would build an assembly plant in Singapore, which the company now says will be complete next year.
“Singapore has a comparatively high cost base, but also great technology expertise and focus,” CEO Jim Rowan told employees in a letter last November. “It is therefore the right place to make high quality technology loaded machines, and the right place to make our electric vehicle.”
The founder's latest e-mail revealed that the project is centered at the old RAF base at Hullavington Airport, 2.5 hours west of London and employees about 500 workers, though with testing set to accelerate next month, that job count is expected to grow.
“Our bespoke automotive development site at Hullavington, UK is a £200m investment in the Dyson electric car. It's 517 acres house restored hangars, with some of the most advanced Research, Design and Development (RDD) labs in the world,” the company says on its website.
Dyson said the patent filings reveal an “androgynous vehicle,” rather than a specific product under development. But he did offer a few hints at what is coming.
“Significantly, many of our competitors base their electric vehicles on existing formats and adapt them for electric propulsion systems,” Dyson wrote in an email to employees. “Such an approach is cost effective, however, it tends to miss opportunities for mass-reduction and aerodynamic improvements which would improve the energy efficiency of the vehicle. Another approach has been to focus on smaller vehicles, as this generally keeps the mass of the vehicle low which can extend driving range. However, the size and ride comfort of such vehicles tends to limit their attractiveness and utility.”
Referencing the patent renderings, Dyson did note that the basic shape, a bit lower than today's typical SUV and CUV, would reduce aerodynamic drag while “the long wheel base could be employed, increasing the driving range and enabling a larger cabin capacity.”
Based on comments James Dyson has made over the last year and reports in various news outlets, the expectation is that three vehicles are in various stages of development, company officials indicating production should launch by 2021. They have offered no details on pricing nor where they plan to launch the product line, though Dyson is expected to set up its own dealer network.
The outspoken company founder has, meanwhile, taken a publicly proactive position in support of a proposal now being studied by Britain's government that would eliminate the sale of all new gas and diesel vehicles. The original concept set a target date of 2040 but British regulators have begun considering the option of pushing that up to 2035. Dyson, for his part, would like the ban to go into effect in 2030.
Similar measures are under study in a number of countries, including China, India, Germany and France. In Norway, where electric vehicles currently account for more than half of the new car market, a ban has already been approved.
Such a move would improve the odds that start-ups like Dyson could carve out a market niche, though traditional automakers like Daimler AG, General Motors and Volkswagen, are intent on reclaiming market dominance. That said, the arrival of upstart Tesla has shown the potential for new entrants, of which plenty more are looking to launch, such as Rivian and Faraday Future. There is also Apple, the technology giant working on its own vehicle program, though it has sent a number of conflicting signals about what it is developing in recent years.
Author: CNBC Online news
Shares of Mercedes-maker Daimler fall as rumors fly of a Chinese stake build-up
An employee at a Mercedes-Benz car dealership.Dmitry Rogulin | TASS | Getty ImagesShares of Daimler dipped Monday following a report that a Chinese partner firm is building a stake in the German automaker.
Reuters reported Friday, citing three sources familiar with the matter, that China's Beijing Automotive Industry Holding Co. (BAIC) has been buying up shares in the Mercedes-Benz carmaker on the open market, with a view to consolidating a stake of around 4% to 5%. CNBC couldn't independently verify the report.
Shares of Daimler are up 20% so far in 2019, but retreated around 3% Monday amid a wider sell-off for European benchmarks.
One source, cited by Reuters, suggested that the buying this year had been underpinned by BAIC's ambition and that Monday's selling may denote that the buyer is nearly finished acquiring stock.
Building a 5% stake in Daimler at its current stock value would cost a buyer around $3.4 billion.
BAIC builds Mercedes cars in China through their joint venture, Beijing Benz Automotive. Daimler has reportedly been looking to secure a controlling interest in the alliance.
Li Shufu, the chairman of rival Chinese carmaker Zhejiang Geely, is Daimler's biggest individual stakeholder, holding nearly a 10% slice of the German firm.
After being contacted by CNBC, Daimler said it had no comment to make.
VW’s $2 billion penalty for diesel scam, Electrify America, builds electric chargers across US
Source: Electrify America
Electrify America charging station
Almost a year to the day after opening its first charging station, Electrify America says it is rolling out the country's fastest-growing network of fast chargers.
Funded by $2 billion from Volkswagen's 2016 diesel emissions settlement, it has a goal of building hundreds of stations and putting nearly 2,000 chargers in place by the end of this year.
Many of those will let battery-electric vehicle, or BEV, owners charge up nearly as quickly as they could fill a gas tank. Charging speed — along with the lack of a national network of charging stations — has been cited as a key obstacle to the widespread public adoption of electric cars.
“Longer range and faster charging times are critical to the widespread adoption of electric vehicles,” said Brendan Jones, the chief operating officer at Electrify America, during a conversation at the company's headquarters in Reston, Virginia. It's the equivalent of the classic chicken-and-egg problem.
EVs go mainstream
Extended-range vehicles, offering anywhere from 200 to nearly 400 miles per charge, are starting to roll out in large numbers from mainstream brands such as Daimler, Ford, General Motors and Volkswagen, as well as start-ups such as Tesla and Rivian.
Setting up a nationwide infrastructure is the next big challenge, according to many analysts. An August study by McKinsey & Co. projected it will cost as much as $50 billion to ensure public charging stations are as easily accessible as gas stations in three key markets — the U.S., Europe and China. The U.S. alone is expected to require an investment of as much as $11 billion, McKinsey estimated.
Several key players have entered the field and are starting to ramp up efforts to fill the broad gaps that exist across the country. These include Tesla, which has already put into operation 1,441 Supercharger stations across North America, the vast majority of them along U.S. roadways. Those facilities are only available to Tesla owners, but companies such as EVgo and ChargePoint are targeting the rest of the market. So is Electrify America.
Emissions settlement
Electrify America must spend that $2 billion by the end of 2026. The company, based in the suburbs of Washington, D.C., was created as part of Volkswagen's diesel emissions settlement with U.S. and California regulators.
The company is spending that money on a mix of consumer education and infrastructure, the latter drawing the vast majority of the funding. Though Electrify America is housed in the same faceless office complex as Volkswagen's U.S. headquarters, the settlement calls for it to operate as an independent entity. That was underscored by a network television ad the organization ran last year that featured a number of different electric vehicles, including those from Nissan, BMW and General Motors, but none from VW.
Electrify America's charging stations are being outfitted to allow any plug-based vehicle to connect, though Tesla owners will need an optional, proprietary adapter.
The first of its charging stations opened for business about a year ago. Since then, more than 160 have come online, with dozens more in various stages of completion. Each station features an average of four to five chargers, with a maximum of 10 at what are expected to become high-volume locations.
Building out
The goal is to have about 2,800 Level 2 and more than 2,000 Level 3 chargers in operation around the U.S. by the end of this year, said Electrify America CEO Giovanni Palazzo. To put that into perspective, the U.S. Department of Energy said a total of 54,638 public Level 2 and 3 chargers were in operation across the country at the end of 2018.
Electrify America's initial focus is on regions with high levels of EV ownership such as California and parts of the East Coast, he said. But it eventually plans to have charging stations that are no more than 70 miles apart along all major roadways in most states. Urban areas where EV ownership is expected to peak will have more of them.
The Level 2 systems, much like those that electric-car owners can install at home or find at many shopping centers and offices, provide 240-volt current at a rate that normally requires anywhere from four to 10 hours for a long-range vehicle to fully recharge. In many instances, Electrify America is targeting locations where owners who live in multifamily dwellings may not have on-site access to a charger.
The real transformation, industry observers believe, is the emergence of a Level 3 network. Around mid-decade, only a handful were open to the public in the entire country, but they are believed to now number in the 100s of stations and expanding rapidly, according to Palazzo and other experts.
Level 3
The first of these punched out 50 kilowatts of direct current, something that allowed for much more rapid charging — a Chevrolet Bolt EV, for example, can replenish about 80% of its charge in an hour or so.
Moving forward, Electrify America's new Level 3 systems will almost all provide a minimum of 150 kilowatts at 400 volts and many will push even further, taking that up to 250 kW and 800 volts. That's far more than most of the current crop of electric cars can handle. The new Porsche Taycan will be the first to be able to make full use of the technology, which can add about 20 miles of range per minute.
Source: Porsche
2019 Porsche Taycan
“That will let it recharge in about 10 minutes,” said Jones, “about the same amount of time as it takes to fill up a gas tank.”
To make things easier and speed up the charging process, Electrify America this week is rolling out a new smartphone app that can be used to locate its charging stations and see how long it will take for someone already hooked up to finish charging.
At the company's technical center, a short drive from its Reston headquarters, chief engineer Seth Cutler demonstrated to reporters last week what he hopes will further improve the customer experience and shave another minute or two off the charging process.
Tricky pricing
Normally, a user has to plug their vehicle in and go through a set-up process similar to paying for a tank of gas. But this time, as Cutler plugs a car into a charger prototype, everything is handled automatically. New software allows the charger to query the vehicle's on-board controller to find out how much power it can handle and how to bill it.
Pricing is still a bit of a challenge for EV owners. At home, based on typical U.S. energy rates of around 11 cents a kW, a vehicle like the Chevy Bolt, with a 65 kilowatt-hour pack, will cost less than $10 to “fill up.” And many owners are eligible for time-of-day rates that drop substantially when charging overnight.
That's why industry data show that about 80% of EV owners currently charge either at home or at an office during the day, noted Electrify America's Jones.
But the forecast is that more and more buyers won't have ready access to those Level 2 systems, while others will tap out their batteries while traveling longer distances, requiring them to plug into a commercially operated charging station.
Pricing can vary from company to company and even from one state to another. Charging companies typically offer discounted subscription services, but they also penalize nonsubscribers with “hook-up” fees of as much as $5.
More than gas
More often than not, motorists are billed on a per-minute basis, and that can add up if a vehicle is slow to charge, as I found out plugging in a Hyundai Kona EV to an EVgo charger in Ferndale, Michigan, earlier this year. After about 50 minutes, the battery crossover had gained only 80 extra miles of range on the 50 kW Level 3 system. The bill? Around $16, or 20 cents a mile. At the time, Michigan gas cost around $2.30 a gallon. A gasoline-fueled Kona, with mileage of 23 city and 28 highway, would have averaged less than 10 cents a mile.
While faster Level 3 chargers operated by Electrify America and other companies levy a higher fee when pumping out more current, the premium is modest, so it still works out to a lower final price. And that's before factoring in the convenience of not having to wait around for an hour or so.
Electrify America is now dropping its prices by 20%, which should make running an electric car while having to use public charging stations more cost-competitive with a gasoline vehicle, said Jones.
Yet another step some charging companies are taking will let their systems talk to one another and, in the process, accept competitors' subscribers without charging exorbitant hook-up fees.
Such steps will be critical to gaining acceptance for battery-electric vehicles, said Palazzo and Pasquale Romano, the CEO of ChargePoint.
In the red
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Elon Musk is wrong on robotaxi timing, Uber CEO Dara Khosrowshahi says
Uber CEO Dara Khosrowshahi: I disagree on Musk's robo-taxi timing expectations
1 Hour Ago | 01:09
Uber CEO Dara Khosrowshahi told CNBC he agrees with Tesla CEO Elon Musk that the future of mobility is electric, but he disagrees with Musk that truly autonomous “robotaxis” will next year.
In an interview that aired on Uber's IPO day on Friday, “Squawk Box” co-host Andrew Ross Sorkin asked him what the future of mobility looks like.
“First of all, it's got to be electric,” the CEO said. “We think that's a no-brainer. It's good for the environment. It's where the world is going. And we're playing our part, for example, in London to move it electric.” He added that Uber, of course, thinks the future of mobility also has to be “shared.”
The ride-hailing giant will make its debut on the New York Stock Exchange on Friday, pricing its IPO on Thursday night at $45 per share.
Tesla CEO Elon Musk recently told investors he is ready to take Tesla into a new, driverless era. The company should have a million vehicles capable of functioning as driverless robotaxis on the road by the end of 2020, he said. He also told investors that self-driving technology and services will help his electric car company grow to a $500 billion market cap.
When the Uber CEO first heard Musk's predictions about this, Khosrowshahi said, “I thought: If he can do it, more power to him. Our approach is a more conservative approach as far as sensor technology and mapping technology. The software's going to get there. So I don't think that his vision is by any means wrong. I just think we disagree on timing.”
Spencer Platt | Getty Images
The inside of a Tesla vehicle is viewed as it sits parked in a Tesla showroom and service center in Red Hook, Brooklyn on July 5, 2016.
Musk has also promised investors and fans that Tesla's self-driving cars will be able to work 100 hours a week, generating tens of thousands of dollars in income for their owners. He has also said that Tesla should be able to win regulators over to approve Tesla robotaxis for commercial use in the near future, at least in some locales.
Tesla and Uber have seen their semi-autonomous vehicles involved in fatal crashes in recent years.
Khosrowshahi struck a more sober tone about a driverless future.
“I think it will be quite a few years beyond,” he said.
While media coverage and industry conversations have focused on the dramatic notion that robots will steal jobs from people, the Uber CEO said he believes automation will always work better to augment humans' work. The better things are robots and humans together. Hybrid is always better, and hybrid states can continue for a much longer period than you think.”
In addition to its sizable ride-hailing business, Uber offers bike and scooter rentals, food delivery and operates a freight marketplace that links senders to shippers. Uber is developing self-driving vehicle technology through its Advanced Technologies Group.
Post-IPO Uber has a market capitalization over $80 billion. Tesla's market cap currently stands around $43 billion.
Uber CEO Dara Khosrowshahi: We want long-term investors
2 Hours Ago | 02:46
As Uber goes public, profitability will be the next challenge
As Uber goes public, profitability will be the next challenge
Uber is hitting the public markets on Friday and it's valuation could top $90 billion. The world's biggest ride-hailing business is debuting six weeks after smaller rival Lyft.
But Uber is far from making money. It reported an operating loss of $3 billion in 2018 after losing more than $4 billion the previous year. Still, not all investors are scared away from Uber's red ink. Some analysts predict it will eventually turn a profit.
Watch the video to learn how Uber spends money and what it will take for the business to become profitable.
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Here’s the autonomous robot Ford built. It’s one of the company’s newest factory workers in Spain
Ford just introduced an autonomous robot to one of its factories
40 Mins Ago | 01:03
The Ford Motor manufacturing plant in Valencia, Spain has a new delivery employee — an autonomous robot named “Survival.”
The self-driving robot uses LiDAR (light detection and ranging) technology to visualize its surroundings and deliver spare parts to where they're needed in the facility. It was manufactured by Ford engineers and is the first of its kind to be used at one of the company's European plants.
Ford said Survival gives employees at the facility more time to undertake more complex tasks.
“When it first started you could see employees thinking they were in some kind of sci-fi movie, stopping and staring at it as it went by,” Eduardo García Magraner, manufacturing manager at the Valencia factory, said in a statement. “Now they just get on with their jobs knowing the robot is smart enough to work around them.”
Survival made its debut at Ford as workers around the world become increasingly worried their jobs will one day be stolen by technology.
Nearly half of the world's jobs face some risk of being automated in the future, according to research by the Organisation for Economic Co-operation and Development. Workers in America risk losing work to robots too, a report by the Brookings Institution says, warning that a quarter of Americans are at high risk of losing their jobs because of automation.
Workers in food services, manufacturing, administrative support, farming, transportation and construction have the greatest likelihood of being replaced by robots.
In 2018, there were a record number of robots that were put to work in North America. According to the Robotic Industries Association, 35,880 robots were shipped to the U.S., Canada and Mexico that year, with 53% of the shipments going to work in the automotive industry.
But Ford said workers at the Valencia plant don't need to fear Survival taking their job.
The company said delivering spare parts to different areas of the plant is “time consuming and relatively mundane,” adding that Survival saves up to 40 working hours for employees and does not replace anyone on the job.
AAA study finds Americans warm to electric vehicles, but most aren’t ready to buy — at least not yet
Getty Images
Americans aren't ready to buy electric vehicles and don't think their neighbors are either, according to a new study by AAA.
That said, as many as 40 million Americans say they will at least consider a battery-electric vehicle, or BEV, for their next vehicle, the automotive group found. And the public may be more interested in battery-based vehicles as a flood of new models comes to market, but only four in 10 people believe that the majority of vehicles will be electric by 2029. The majority of Americans actually expect that most new cars will be able to drive themselves within the coming decade.
“Today, more than 200,000 electric cars can be found on roads across the country as almost every manufacturer sells them,” said Greg Brannon, AAA's director of automotive engineering. “But, like other new vehicle technologies, Americans don't have the full story and that could be causing the gap between interest and action.”
Battery-based vehicles of all forms, including conventional hybrids, plug-in hybrids and BEVs, accounted for barely 5% of the American new car market last year. But plug-based models, BEVs in particular, saw sales roughly double, according to industry data. And the numbers are expected to continue growing rapidly as more long-range offerings, such as the Audi e-tron crossover, the Tesla Model Y SUV and the Porsche Taycan sports car come to market. By mid-decade, industry analysts such as LMC Automotive anticipate well over 100 options for potential buyers.
But the AAA study shows that Americans haven't been keeping up with the rapid rate of change reshaping the electric vehicle market, including the shift from first-generation models barely capable of running 100 miles on a charge to new and updated offerings that are now approaching 400 miles per charge.
“Many consumers are not sure what to expect from an electric vehicle,” a summary of the AAA report found, such as what sort of conditions typically yield the best range. As with hybrids like the Toyota Prius, electric vehicles can recapture energy lost during braking and coasting, which means they actually do better in stop-and-go traffic than on the highway – the opposite of what's true for conventional, gas-powered vehicles.
There remains plenty of confusion about what electric vehicles can and can't do, and not only in the United States. A survey of British motorists last year found 42% saying a BEV can't be driven through a car wash. It can. Some new models, like the Jaguar I-Pace, can even ford moderately deep levels of water.
The AAA study found that a growing number of Americans are at least considering BEVs and other electrified models, with millennials at the forefront. Other findings show:
Sixteen percent of those surveyed said they are likely to buy an EV next time they shop for a new vehicle.Concern about the environment is the primary motivator, cited by 74% of those surveyed; lowering vehicle operating costs is mentioned by 56% of those surveyed.There are fewer worries about the traditional obstacles to widespread adoption. The study found 11% fewer respondents pointing to a lack of places to charge up than raised that concern in a 2017 study.Significantly fewer respondents pointed to higher purchase prices and repair costs than in the 2017 AAA study.
Limited range, higher costs and the lack of a public charging infrastructure are traditionally seen as the key obstacles to mainstream adoption of battery-electric vehicles. But a number of new models now cost under $40,000. And the AAA found 44% of buyers would be willing to pay up to $4,000 more for an electric vehicle than a gas model, with 23% willing to pay even more of a premium.
A potential selling point is that the range of the second-generation models now coming to market routinely top 200 miles. Tesla is now offering an extended-range pack for its Model S sedan capable of 370 miles.
Concerns about charging nonetheless remain a major issue, with six in 10 of those surveyed raising that issue as a reason they are unlikely to buy, or are unsure about buying, a BEV. Fifty-seven percent said they think electric vehicles aren't suitable for long-distance travel.
Public charging is still limited, especially in the middle of the country, but companies including ChargePoint, EVgo and Electrify America plan to invest billions over the coming decade to fill that gap. And the latest versions of their high-speed Level 3 chargers are capable of delivering as much as 20 miles of range per minute, meaning a “fill-up” can be cut to around 10 minutes on some vehicles, roughly matching what it takes to fill a gas tank.
“These vehicles are a big part of the future of transportation since self-driving cars, when they do arrive, will likely be electric,” AAA's Brannon said. “The difference, of course, is that electric vehicles are already here (and) have become an even more viable option for many Americans.”
The first Chinese automaker sets sights on US with start-up Zotye taking on big rivals in Detroit
The Zotye Auto debut at Shanghai auto showH/O: Zotye AutoWhen Guangzhou-based GAC Group rolled out a concept vehicle at the North American International Auto Show last January it was just the latest among a procession of Chinese automakers laying out plans to enter the American car market.
To date, however, the only Chinese-made vehicles to reach U.S. shores have been imported by General Motors and Volvo. But Zotye Auto, a small, privately held carmaker from Yongkang, Zhejiang, China, is determined to be the first domestic Chinese car company to reach American shores — and in as little as 18 months from now.
With a name that few Americans will likely know how to pronounce — it's Zoh-tee, not Zot-yee — a small budget and even less brand equity than bigger Chinese brands like BYD, Geely or Great Wall, there are plenty of skeptics. Americans “have a bad perception of Chinese vehicles, overall” cautioned Augusto Amorim, a senior analyst with LMC Automotive. And Zotye is particularly unknown, he said.
But the team of industry veterans who are leading the Zotye launch effort are confident they can pull it off, including seasoned salesman Duke Hale, 69, who sold his first car as a teenager and has spent decades working with automakers as diverse as Isuzu, Lotus and Land Rover. Hale said he's confident his “seven Ps” strategy will clinch the deal.
The list includes such things as “processes,” as well as “product.” The first model expected to enter Zotye's U.S. line-up debuted barely a month ago at Auto Shanghai. The T600 is a compact crossover that will be aimed at the likes of the Toyota RAV4 and Honda CR-V. It will be followed in 2022 by the midsize T700 crossover and, about a year later, by a three-row model.
The Zotye Auto debut at Shanghai auto showH/O: Zotye AutoBut while the T600 has generated some positive press, Hale believes the brand's biggest selling point will be “price.”
“Think in terms of 20% less than the targeted competition,” notably including the likes of Hyundai, Kia and Toyota, Hale said over dinner with journalists at the Detroit Renaissance Center on Thursday night.
That's an even bigger discount than Hyundai offered buyers when it came to the U.S. market 30 years ago — and with a name that was equally baffling to American consumers. And it would come at a decidedly opportune time, industry officials like Joe Hinrichs, Ford's president of automotive operations, have openly worried about the rising cost of today's new vehicles. The average sticker price of a new car hit a record $34,000 at the beginning of the year, according to data compiled by industry research company LMC Automotive.
Industry observers note that translates into a typical monthly payment of around $550, enough to price millions of potential buyers out of the market, especially millennial and Gen-Z motorists, many already straining to pay off student loans.
Jan Thompson, a former marketing executive with Mazda and Toyota who's now handling that role for Zotye, believes the Chinese brand's primary buyers will be young shoppers who don't want to buy a used car. But with an estimated 42 million used vehicles sold in 2019, nearly three times more than new, customers could come from every market demographic, she said.
2019 Honda CRV with camper tent accessories.Adam Jeffery | CNBC “I tell my neighbors in Tennessee I'm going to sell a Chinese car and they all say they're not interested,” she said. “Then I tell them the price and they all ask where they can sign up.”
Unlike Hyundai, Kia and the many new automotive start-ups coming on the scene, Zotye won't actually run the show, if and when its cars come to the U.S. The marketing operation actually lifts a page from the strategy several Japanese automakers used in decades past when they tried to pry open the door to the U.S. market. Subaru, Mazda and even Toyota initially relied on independent American distributors — the Japanese giant still represented by one in a number of Southern states.
Hale's HAAH Automotive Holdings negotiated a deal to import and distribute Zotye's products in the U.S., a plan the Chinese carmaker was more than glad to accept, he said, considering it currently has capacity to build 1.2 million vehicles annually but only sold about 400,000 last year.
The arrangement gives HAAH plenty of flexibility and, in fact, “There are probably more brands to be announced in the future,” he said Thursday, suggesting his privately held company is negotiating with several other Chinese wannabe exporters.
Of course, the real question is whether HAAH will get past the bright idea stage. There have been plenty of attempts to set up new brands in the U.S. over the past 20 years but only Tesla has so far succeeded. Notable failures include India's Mahindra & Mahindra which even had lined up a network of dealers, early in the decade, before throwing in the towel.
The good news for HAAH and Zotye is that they claim to be generating strong interest from dealers, with several dozen now signed on representing 60 “points” in 15 states, and negotiations are well underway with about 20 others, according to sales chief Bob Pradzinski, who has spent decades working for Asian automakers including Hyundai, Mazda and Toyota.
What might surprise buyers is that despite record new vehicle prices, the typical automotive retailer loses about $331 for every car, truck or crossover they sell, according to the National Automobile Dealers Association. They have to try to make that up by pushing finance, insurance and service.
Hale and his team is trying to make it easier — more profitable — for dealers. Zotye plans to use a “no haggle/no hassle” approach to pricing, like Saturn. And dealers will be offered large geographic franchises in which they could set up multiple outlets. That could include showrooms in malls, something Tesla has done.
Hale and his team acknowledged there are plenty of potential obstacles, like meeting U.S. emissions, mileage and safety standards, for one. The trade war between the U.S. and China is also an issue, although Hale said he's confident it will be resolved well before the first Zotye is ordered in the U.S.
“They seem serious about getting into the market and are clearly trying to understand what buyers want,” said analyst Amorim. While it will likely be a challenge for any Chinese makers, especially in a market already crowded with so many brands, he believes Zotye and HAAH could “have a higher chance of being successful” if they can execute the plan Hale and his team have put together.
Designers at Ford are using virtual reality tools to work with colleagues remotely
FordEmployees at Ford have started to use a 3D virtual reality (VR) tool that enables them to work on designs with colleagues remotely in real time.
The technology has been developed by Gravity Sketch, in collaboration with Ford. It sees workers wear headsets and use controllers to “draw, rotate, expand and compress a 3D sketch.”
A feature in the system, called Co-Creation, allows designers around the world to work on and evaluate designs in real time while being in different offices. The Gravity Sketch platform negates the need for an initial 2D design process, allowing designers to work with a 3D model from the start.
In a statement earlier this week Michael Smith, design manager at Ford, said that the Co-Creation feature added “more voices to the conversation in a virtual environment, which results in more efficient design work that may help accelerate a vehicle program's development.”
Ford said that designers in five Ford studios around the world were experimenting with Gravity Sketch, looking at both “workflow feasibility” and capabilities relating to “real-time co-creation and collaboration.”
As technology develops, VR is starting to be used across a wide range of industries. In April 2019, for example, it was announced that Qatar Airways had partnered with Rolls-Royce to trial a VR training tool.
The technology, which uses HTC Vive equipment, has been designed to give engineers virtual refresher training with Rolls-Royce's biggest engine, the Trent XWB.
A few months earlier, in February, the British Army awarded a £1 million ($1.3 million) contract to a software developer to “explore how virtual reality can be integrated into soldier training.”
The Ministry of Defence said the pilot scheme would look to test a range of virtual reality applications. These include high resolution virtual reality headsets; avatars that can be customized to replicate facial features and body shapes; and technology that offers data capture and analysis to help soldiers “better understand their own performance.”
Here’s what Wall Street is saying about Lyft’s first report: ‘A good first step’ to profitability
Lyft President John Zimmer (R) and CEO Logan Green speak as Lyft lists on the Nasdaq at an IPO event in Los Angeles March 29, 2019.Mike Blake | ReutersDespite heavy bottom line losses, Wall Street analysts were largely optimistic on Wednesday about Lyft's first quarter earnings report, which was also the ridesharing company's first as a publicly-traded company.
“Overall, we view the 1Q update as positive as the company progresses towards its long-term goals,” Stifel said.
The first quarter results, as well as Lyft's 2019 earnings forecast, was “a good first step for the company to provide evidence toward that goal” of profitability, Credit Suisse said.
“Long term, we still see shared transportation as a market with a long runway for secular growth, potentially more rational industry competitive dynamics as maturity approaches & broader positive impacts on society,” UBS said.
JMP Securities urged investors to “take advantage of the recent pullback in shares,” the firm said, as Lyft has fallen more than 24% since its IPO.
Lyft shares were 3.6% lower in premarket trading from Tuesday's close of $59.34 a share. Its IPO price was $72.
Here's what every major Wall Street analyst said about Lyft's results.
UBS' Eric Sheridan – Buy rating, $82 price target “With its first earnings call/report, LYFT mgmt (in our opinion) laid out a positive LT vision for the industry, downplayed recent worries on competition and talked up the long term transportation oppty. In addition, we think a Q1 and upside forward commentary should also focus investors back on the potential upside. Long term, we still see shared transportation as a market with a long runway for secular growth, potentially more rational industry competitive dynamics as maturity approaches & broader positive impacts on society.”
Credit Suisse's Stephen Ju – Outperform rating, $95 price target “We note that as the potential for margin expansion (and particularly the long-term margin targets) has been a sticking point for LYFT shares among investors, we view the better-than-expected Adj. EBITDA margins reflected in the 1Q19 results, as well as the 2Q19 and 2019 guidance parameters as a good first step for the company to provide evidence toward that goal.”
Jefferies' Brent Thill – Buy rating, increased price target to $90 from $86 “Lyft delivered a clean ride out of the gate in its first qtr since the IPO, with a convincing beat and raise. Lyft showed: 1) strong momentum in rev & metrics; 2) significant progress in reducing losses; and 3) heading off a L-T concern with a partnership with Waymo. Valuation is attractive at 4.0x CY20 EV/S, and we expect stock to recover as Lyft executes and misconceptions clear.”
J.P. Morgan's Doug Anmuth –Overweight rating, increased price target to $86 from $82 “Overall, we believe Lyft's results & outlook were strong, & mgmt addressed a number of key points that we believe will bolster shares: 1) more details & confidence around leveraging insurance over time; 2) 2019 as the peak loss year; 3) core ridesharing losses improving; & 4) competition receding & ridesharing becoming increasing rational. Our 2019 & 2020 revenue estimates are increasing 3-4% & our EBITDA losses also improve notably. We continue to believe there is strong secular growth in TaaS, that Lyft's singular focus on transportation & emphasis on product innovation will driver further share gains, & that ridesharing will become profitable as the industry becomes more rational over time.”
Piper Jaffray's Michael Olson – Overweight rating, $78 price target “The company indicated that, while it continues to spend aggressively on various initiatives, the competitive pressure on rider incentives for core ridesharing has receded to some degree, which is a sign of a rational duopoly between Lyft and Uber for the time being.We believe Lyft will be both a catalyst and beneficiary of the growth of ridesharing and autonomous tech over the next 10+ years. LYFT may not be the right fit for all investors, given the company's current materially unprofitable state, but for those with a long-term view, and patience, we recommend owning shares at these levels.”
Raymond James' Justin Patterson – Outperform rating, $85 price target “We leave the quarter feeling incrementally better about Lyft's ability to win driver and customer loyalty via product innovation and service, and sustain >50% contribution profit growth into 2020E … the peak loss year is less steep than envisioned. Lyft will still generate EBITDA losses in excess of $1B this year…but that is an improvement from $1.3B previously. The incremental margin improvements demonstrated in 1Q suggest that Lyft can reduce cash burn as it exits 2019.”
Stifel's Scott Devitt – Buy rating, increased price target to $70 from $68 “The company's FY:19 revenue guide was set ~3% above our prior expectation at the midpoint. Adj. EBITDA margin for the full year is expected to be -35.4% at the midpoint, approximately 700bps better than our prior expectation. Management noted it is seeing a reduction in rider incentives across the industry and believes overall the current competitive market is rationalizing. Overall, we view the 1Q update as positive as the company progresses towards its long-term goals. We are raising our target price to $70 as a result of higher estimates.”
Canaccord Genuity's Michael Graham – Buy rating, $75 price target “Lyft delivered a textbook first public quarter, with modest upside on all key metrics, and solid guidance relative to consensus both for Q2 and 2019. Management sees the competitive landscape in key US cities becoming increasingly rational, which should be a positive signal for investors worried about the potential for near-term pressure from driver incentives and pricing. Lyft is now contribution-margin positive in nearly every market, and the core ridesharing business is showing enough operating leverage to offset even more of the 2019 investment in bikes and scooters. We continue to see Lyft offering the hallmarks of an attractive growth equity investment, including a large addressable market with an attractive duopoly structure, a strong value proposition that should get better with scale, and a business model that holds solid room for upside.”
JMP Securities' Ronald Josey – Market outperform rating, $78 price target “While acknowledging the concerns around competition, investments, and greater losses in 2019, given strong top-line growth, contribution margin expansion to ~50% in 1Q19 from 35% in 1Q18, Sales and Marketing leverage, and improving losses, we would take advantage of the recent pullback in shares; since Lyft's day 1 closing price post its IPO, shares are down 24% compared to +1.8% for the S&P 500. Importantly, with ~30-40% share of the domestic ridesharing market, a market we believe accounts for ~1% of miles driven, we believe Lyft is at scale and that its TAM could ultimately be significantly larger than the $1.2 trillion annual personal transportation market / TAAS market.
KeyBanc's Andy Hargreaves – Sector weight rating, no price target “Lyft reported solid 1Q results with better than expected rider and revenue growth. We believe Lyft is performing well and retains a strong top-line growth outlook. However, the ride-sharing market appears to be slowing and the degree of longterm profitability remains uncertain, preventing a more positive outlook on the shares.”
Atlantic Equities' James Cordwell – Underweight rating, increased price target to $52 from $50 “Q1 revenue and adjusted EBITDA were ahead and, encouragingly, management commented that promotional intensity had eased, aiding profitability. However, Q2 and FY19 revenue guidance imply a steep deceleration, and while not completely unexpected, could bring to the fore concerns regarding how much growth remains in the US ridehailing market under the current operating model … we remain Underweight given the slowing growth profile and our view that Lyft has insufficient scale to ultimately deliver attractive returns.”
Guggenheim's Jake Fuller – Neutral rating, no price target “The key debate into the release of LYFT's first quarterly results as a public company has been whether it could both sustain rapid growth in Active Riders and do so while showing improvement in unit economics. Growth in Active Riders was modestly ahead of consensus and we saw a sequential step-up in revenue/rider and contribution margin. After seeing Uber's preliminary 1Q results, we worried over the potential for mounting competition to undermine those metrics. While detail in the release and accompanying slide pack was sparse, the lack of obvious competitive pressure is encouraging.”