Author: CNBC Online news

Fire at Tesla factory in Fremont contained, won’t impact production

CNBC | Lora Kolodny
Tesla's car plant in Fremont, California features a large tent where the company produces some of its Model 3 electric sedans.

A fire broke out at Tesla's car plant in Fremont, California, on Saturday night, in an area where the company stores some hazardous materials outside.

While Tesla can manage some fires with its own internal brigade, the one on Saturday was contained within a few hours by the local Fremont Fire Department, and required a hazardous materials unit, Fremont Deputy Fire Chief Amiel Thurston told the East Bay Times.

Tesla confirmed that no employees were injured and the fire would not impact vehicle production.

The company has a history of frequent fires at this facility, including a significant one at its paint shop in April last year that temporarily halted electric vehicle production, and another outdoor fire (near a tent on the south side of the factory) in August.

This latest fire comes at a time when Tesla is defending its workplace safety record before California's Division of Occupational Safety and Health.

In January, Cal-OSHA cited and fined Tesla for allegedly violating six different worker safety regulations in their “GA4” — or general assembly 4 — production line. GA4 is where workers produce some of Tesla's Model 3 electric sedans under a giant tent structure. Tesla plans to appeal those citations.

Electric truck start-up Rivian announces $700 million investment round led by Amazon

Source: Rivian
Rivian R1T electric pickup truck

Electric truck start-up and potential Tesla rival Rivian announced a $700 million investment round led by Amazon on Friday.

The announcement comes just months after the Michigan-based company unveiled both an electric pickup truck and sport utility vehicle at the LA Auto Show in November.

“This investment is an important milestone for Rivian and the shift to sustainable mobility,” said RJ Scaringe, Rivian Founder and CEO. “Beyond simply eliminating compromises that exist around performance, capability and efficiency, we are working to drive innovation across the entire customer experience. Delivering on this vision requires the right partners, and we are excited to have Amazon with us on our journey to create products, technology and experiences that reset expectations of what is possible.”

The news confirms a Reuters report on Tuesday that Amazon had invested in the firm. Reuters had also reported that automaker General Motors had made an investment in Rivian, but neither GM nor Rivian has confirmed this yet.

The round included investments from Rivian's existing shareholders. It will remain an independent company. Rivian currently has more than 750 employees located in several locations, including Plymouth, Michigan; San Jose and Irvine, California; Normal, Illinois; and Surrey, England.

It plans to launch its R1T pickup truck and R1S sport utility in the U.S. in 2020, and begin introducing them overseas in 2021. The company has modeled both vehicles on what it calls a “skateboard” platform, which it says it flexible enough to accommodate several different vehicle body styles.

Some industry analysts have speculated that Amazon could be interested in Rivian's platform for developing vehicles for its massive global logistics needs.

“We're inspired by Rivian's vision for the future of electric transportation,” said Jeff Wilke, Amazon CEO Worldwide Consumer. “RJ has built an impressive organization, with a product portfolio and technology to match. We're thrilled to invest in such an innovative company.”

This is Amazon's second investment in transportation this month. The online giant recently put money into Aurora, an autonomous vehicle technology company run by Waymo and Tesla alumni.

Trucks and SUVs are also increasingly more popular with U.S. consumers than cars, and customers seem willing to pay more for them, meaning more profits for automakers. The business case for an electric pickup or SUV could be stronger than one for a sedan, given how much money companies have had to sink into electric batteries and motors and how difficult it has been for companies to make money on electric cars.

Morgan Stanley analyst Adam Jonas said in a note this week that a successful electric pickup from an upstart such as Rivian or Tesla could pose a serious threat to Detroit automakers, who depend heavily on sales of truck-based vehicles.
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Ford CFO Bob Shanks expected to retire by end of year, sources say

Jeff Kowalsky | Bloomberg | Getty Images
Bob Shanks, chief financial officer of Ford Motor Co.

Ford CFO Bob Shanks plans to retire in 2019, sources familiar with the matter told CNBC on Thursday.

Shanks is expected to stay through the end of the year, according to sources familiar with the matter. His replacement will likely begin transitioning into the role in the second half of the year.

“As all boards of responsible companies do, our board of directors regularly reviews executive succession plans to ensure we have access to the best talent available and are prepared for orderly transitions to take place should the need arise,” Ford said in a statement.

Shares of Ford were up less than 1 percent Thursday afternoon.

General Motors starts taking orders for its electric bicycle

Source: General Motors
The ARĪV Meld is a compact eBike

General Motors just unveiled its electric bicycle in a bid to arm itself against an uncertain future for cars.

The largest U.S. automaker on Thursday released the name of its bike, Ariv, and said it will start taking orders in select countries in Europe.

The name is the result of a crowdsourced campaign announced in November. There are two versions: the Meld, a compact e-bike, and the Merge, a folding e-bike.

GM is launching the bikes in Germany, Belgium and the Netherlands, where lithium-ion battery-powered e-bikes are popular. In Belgium and the Netherlands, the Ariv Meld starts under $3,200 and the Ariv Merge is around $3,800. Prices will be slightly lower in Germany. GM expects to begin shipping to customers in the second quarter.

It is another move by a major automaker to broaden its portfolio to protect against the uncertainties of a changing market. GM and rivals have expanded into scooters, ride-sharing and self-driving cars in an effort to stay relevant in an era where consumers' transportation choices are changing. Even motorcycle maker Harley-Davidson has unveiled lightweight electric two-wheeler concepts as fears of declining ridership grow.

“I think both GM and Ford are both exploring nontraditional transportation opportunities because their overall vehicle sales have been declining,” CFRA analyst Garrett Nelson said. “We view GM's e-bike and Ford's recent e-scooter investment [in Spin] as an attempt to appeal to a younger and more urban demographic, whose transportation needs are proving to be considerably different than prior generations.”

With ride-hailing companies and similar businesses spreading, some industry watchers wonder whether broad swaths of future generations will even consider car ownership at all.

“Carmakers are highly concerned about the implications of this ongoing shift in consumer preferences on their long-term car sales, particularly with the rise of Uber, Lyft, and various ride-sharing options which weren't available several years ago,” Nelson said. “Their fear is that this demographic may not need — or want to — purchase a vehicle at all.”

Morgan Stanley: An electric pickup from Tesla or Rivian is a ‘serious problem’ for Detroit

With competition heating up, is Tesla losing its dominance?
15 Hours Ago | 09:06

The auto industry's electric vehicle revolution has only just begun, Morgan Stanley told investors in a note on Thursday, and the highly profitable pickup truck market is next.

“An electric pickup truck successfully launched by a new player (i.e. Rivian or Tesla) could be a serious problem for the Detroit based [traditional automakers],” Morgan Stanley analyst Adam Jonas said in a note to investors. Jonas is widely known on Wall Street for being one of the first to recognize the significance of Tesla and electric vehicles to the auto industry.

Jonas called reports that General Motors and Amazon are in talks to invest in Rivian, if true, “the biggest news in US autos so far this year.” Without such investments, he said, GM and Ford are losing the opportunity for a “first mover advantage” in producing all electric pickup trucks. Jonas also says Rivian has a competitive advantage from building its truck from the ground up, with little prior conception of an internal combustion engine truck to cloud its view.

“Both GM and Ford have the technical capability to develop and produce and all electric pickup … but we believe design, software, electrical architecture, and brand may be best coming from the 'outside,'” Jonas said.

Additionally, Morgan Stanley said “investors may find it surprising that nearly 9 years after Tesla's IPO there are only 2 pure play EV manufacturer stocks trading publicly in the US market.” The other electric vehicle company that Jonas is referring to is Nio, a Chinese company that listed shares on the New York Stock Exchange in September.

Tesla may unveil an electric pickup truck this summer, CEO Elon Musk said during the company's fourth-quarter conference call. In December, Musk talked extensively on Twitter about what he would like to include in a pickup truck design, including all-wheel drive with “crazy torque & a suspension that dynamically adjusts for load.”

Phillip Faraone | Getty Images Entertainment | Getty Images
Rivian CEO RJ Scaringe attends and speaks at Rivian unveiling of R1T All-Electric Truck.

Rivian showed off prototypes of its R1T electric truck and its seven-passenger R1S sport utility vehicle in November. Rivian CEO R.J. Scaringe said the R1T and R1S will deliver 400 miles of range, with four individual motors allowing for all-wheel-drive. The R1T will be able to hit 60 miles per hour in 3 seconds and tow up to 11,000 pounds.

Morgan Stanley had already featured Rivian twice this week: once as “the next serious competition for Tesla” and again when reports of Amazon and GM's investment surfaced. If GM does invest, Jonas said, it would be “another sign of GM's prescient strategic vision.”

“From an industrial strategy perspective, while many other [traditional automakers] are playing checkers, GM seems to be playing chess,” Jonas said.

Finally, even without the possible investment, Morgan Stanley believes Rivian represents one of the top challengers to Tesla's dominance in the global electric vehicle market.

“The increased legitimacy and capitalization of new/startup EV firms, like Rivian, pose a compounding competitive threat to Tesla. All else equal, a potential GM-Amazon-Rivian tie up could be a clear negative for Tesla in our view,” Jonas said.

Self-driving truck start-up achieves unicorn status in funding round that values it at $1 billion

Imaginechina | AP Images
A self-driving TuSimple truck is on display during 2018 World Artificial Intelligence Conference in Shanghai, China.

Autonomous trucking company TuSimple has achieved unicorn status on Wall Street with a fresh funding round that values the start-up at $1 billion.

The company said Wednesday it raised $95 million in a series D funding led by Sina Corp. and Composite Capital, a Hong Kong-based investment firm, as it prepares to expand its testing of self-driving semis on highways in Arizona, New Mexico and Texas.

“By the end of 2020 or early 2021 we think we think we can take the driver out of the cab on trucks,” said Chuck Price, chief product officer of TuSimple.

San Diego-based TuSimple is developing technology to allow shipping companies to operate self-driving class 8 tractor-trailers, potentially eliminating the need for drivers, the biggest expense facing trucking firms today, especially in a tight labor market. On average, shipping firms spend $2 per mile hauling goods, a cost TuSimple believes it could cut by 30 percent by eliminating the driver with autonomous trucks.

The money will help TuSimple expand its fleet of 12 test trucks to more than 50 by June. The company is currently testing autonomous semis on routes between Phoenix and Dallas.”

The extra cash will also help the company develop joint production of autonomous semis with truck manufacturers. TuSimple is currently working with two tractor-trailer makers, which it is not naming.

There are just under 3.5 million semis on the road in the U.S., according the American Trucking Association. They are the heartbeat of an $800 billion freight shipping industry TuSimple executives believe will continue growing.

“With e-commerce growing by double digits every year, freight shipping is not slowing down,” said Cheng Lu, CFO of TuSimple

Most of the attention surrounding the development of autonomous vehicles has been focused on self-driving cars and the race to build autonomous ride-hailing companies. Alphabet subsidiary Waymo, General Motors subsidiary Cruise and Uber are just a few of the companies that have dominated headlines with their work on self-driving cars. By comparison, the potential of autonomous semis has not received as much attention.

That could change as TuSimple and others demonstrate tractor-trailers can drive autonomously from shipping depot to shipping depot. “A big milestone will be showing that on one route we can take out the driver completely,” said Price.

TuSimple is not alone in the push to develop self-driving semis. Embark Trucks, Ike, Starsky Robotics, Thor Trucks and Udelv are also working on autonomous trucks.

Correction: This story was revised to correct the date of TuSimple's announcement to Wednesday.

Two ways GM and Amazon can make money on Rivian’s electric pickups

Why Rivian may be a threat to Tesla
2 Hours Ago | 02:28

The reported investment automaker General Motors and online giant Amazon made in an electric pickup truck major could yield two very different payouts for such different companies, say two auto industry analysts.

Neither Amazon nor General Motors commented on reports on Tuesday that each company had taken a stake in the Michigan-based startup that wants to be the first automaker to bring an electric pickup to market. GM and Amazon each may have its own unique uses for Rivian's electric platform. Their investments together would value the company between $1 billion to $2 billion, Reuters reported.

Investing in Rivian Automotive's planned electric pickup could help GM rapidly bring an electric powertrain into its top-selling and profitable pickup truck line, giving the automaker a better chance at selling an electric vehicle that can lure buyers and yield profits, said Edmund's analyst Jessica Caldwell.

Pickup trucks are one of the most successful types of vehicles in the market right now. Sales are growing and transaction prices are typically higher than those of cars and rising. In January, average pickup truck transaction prices were just below $50,000, Caldwell said.

“That's a lot of money,” she said. “So I think companies think there could be margins. We've seen electric vehicles not take off on the small vehicle side, so maybe the solution is something bigger, something we know that people will pay a lot more for.”

Meanwhile Amazon could use the company's platform for its extensive logistics needs, said Michelle Krebs, an analyst for Autotrader, an online marketplace for vehicles.

“We know that Amazon wants to reinvent its delivery system,” she said.

Pickup trucks are not a typical vehicle used for deliveries — cargo vans or heavier trucks are far more common. But underpinning the Rivian truck is a kind of “skateboard” platform that can carry a variety of different body shapes, she said.

“They could put any kind of body type on it,” Krebs said. “So it could be a van, a sport utility vehicle. They've talk ed about that. So it has a lot more flexibility in terms of body style.”

Ford issues 3 recalls covering about 1.5 million Ford and Lincoln vehicles, citing accidents

Mike Fuentes | Bloomberg | Getty Images
Ford Motor Co.'s 2013 F-150 pickup truck sits on display at an event in Bruceville, Texas, U.S., on Monday, June 4, 2012.

Ford is issuing three recalls covering about 1.5 million Ford and Lincoln vehicles, citing an unintended downshift to first gear in certain F-150 pickups that's caused at least five accidents, among other safety concerns, the company said Wednesday.

“Depending on vehicle speed, a downshift to first gear without warning could result in a loss of vehicle control, increasing the risk of a crash,” Ford said in a statement announcing the recalls.

Ford is issuing a safety recall on select 2011 to 2013 Ford F-150 vehicles with six-speed automatic transmissions, 2017 to 2019 Lincoln Continental vehicles, and select 2019 Ford Mustang, Lincoln Nautilus and Lincoln Navigator vehicles.

Ford bets big on trucks, Fiat Chrysler issues weak 2019 guidance
6:44 PM ET Thu, 7 Feb 2019 | 02:18

The roughly 1.48 million F-150 trucks have a defect that can cause the truck to temporarily downshift into first gear. Ford is aware of five reports of accidents, including one report of “whiplash” potentially related to this condition.

About 27,000 Lincoln Continental vehicles may have a problem with silicon contamination in the door latch, which can prevent it from fully engaging. This means the door could open while driving. Ford is not aware of any accidents connected to this recall.

About 4,200 Ford Mustang, Lincoln Nautilus and Lincoln Navigator vehicles may have a defect that causes the instrument cluster to be blank while the video starts up. Ford is not aware of any of any accidents connected to this recall either.

Read Ford's full statement here.

WATCH: Ford will get worse in China before it gets better

Ford will get worse in China before it gets better, says CFRA analyst
5:34 PM ET Wed, 23 Jan 2019 | 02:59

Ford executive raises doubts about VW deal for electric vehicles

Bill Pugliano | Getty Images
Jim Farley, Ford Motor Company Executive Vice President and President of Global Markets, reveals the 2020 Ford Mustang Shelby GT 500 at the 2019 North American International Auto Show during Media preview days on January 14, 2019 in Detroit, Michigan.

Ford and Volkswagen appear increasingly unlikely to pull together a deal to work together on battery-electric vehicles, a senior executive with the Detroit automaker said this week.

The two companies announced plans last month to team up on the development of light commercial vehicles and confirmed that other projects were under consideration. It has been widely reported that a key focus was on battery-electric vehicles, a move that could help Ford and VW save billions of dollars by sharing R&D efforts.

But their programs are out of sync, “almost like snowboarding and skiing,” Jim Farley, Ford's president of global markets, said Monday during a taping of the local TV show “Autoline Detroit.”

Automakers around the world have begun looking for ways to partner with erstwhile rivals in order to address an increasingly challenging environment. Many of these alliances focus on the development of new technologies, such as electrification and autonomous driving, areas in which Ford and Volkswagen aim to take a lead.

But the two carmakers are taking markedly different approaches with their electrification programs, said Stephanie Brinley, principal auto analyst with IHS Markit and a participant in the “Autoline” panel discussion.

“They have two very different strategies,” Brinley said, and the “timing issues that just won't mesh.”

America is falling back in love with trucks and SUVs, and that's causing big changes at big car companies
10:38 AM ET Tue, 5 Feb 2019 | 04:45

VW has committed over $50 billion to develop more than 50 pure battery-electric vehicles by 2025. They would be sold through the German automaker's dozen passenger car brands, including Porsche and Audi, as well as the flagship Volkswagen marque.

But the majority of the products will target mainstream markets using a high-volume vehicle platform known as the MEB. “This is meant to be a car for the millions, not millionaires,” Matthew Renna, vice president of e-Mobility for Volkswagen's North American Region, said during a media briefing last week at the Chicago Auto Show.

Ford was itself an early proponent of electrification but initially focused on hybrids, plug-in hybrids and relatively short-range battery-electric vehicles. It now plans to introduce its first long-range model in 2020, and then expand its lineup over the course of the coming decade.

While VW is primarily targeting low-cost, passenger car segments with its battery-car program, “Ford's bet is on commercial vehicles and performance vehicles,” said Farley.

There is still the possibility they could eventually find common ground, “if we could find platforms where it makes sense,” said Farley, but, at least for now, “we're in different timing.”

VW declined to comment about Farley's remarks.