Author: CNBC Online news

BMW adds models, boosts production in US

Luke Sharrett | Bloomberg | Getty Images
An employee installs interior accessories inside a BMW X4 sports utility vehicle on the assembly line at the BMW assembly plant in Greer, South Carolina.

BMW Group is rolling out two new models, X3 M and X4 M, high performance versions of the automakers popular SUVs. The models will go into production in April at BMW's plant in Spartanburg, South Carolina.

“The addition of these two all-new models — plus the first-ever BMW X7, which began production last December — is a testament to the performance, passion and pride of the more than 11,000 people working at Plant Spartanburg and serves to further underscore BMW's commitment in the U.S.,” said Knudt Flor, president and CEO of BMW manufacturing.

Those models, along with the seven others built at BMW's sole U.S. plant means the facility will increase production in 2019 and reach close to record levels last seen in 2016. Production this year is expected to top 400,000 vehicles after reaching 356,749 last year.

BMW's U.S. sales climbed 1.7 percent in 2018.

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Tesla’s charging stations are a massive ‘competitive moat,’ Morgan Stanley says

CNBC visits the only Telsa Supercharger station with a lounge
8:59 AM ET Sat, 27 Jan 2018 | 02:20

Tesla has built up a global network of charging stations, which Morgan Stanley analyst Adam Jonas pointed to as a possible “competitive moat” for the company compared to other electric vehicle makers.

“We estimate Tesla's chargers may account for 30 percent to 40 percent of total US charging outlets counted by the US Dept. of Energy,” Jonas said in a note to investors on Tuesday. Jonas is widely followed on Wall Street for his thoughts on Tesla and electric vehicles.

Tesla upped its network of global “supercharger” stations to nearly 13,000 by the end of last year, while also increasing its total “destination chargers” to more than 21,000. Superchargers refuel most Tesla batteries in about an hour, whereas destination charging stations provide longer charging times more suited for long stays at malls or overnights at hotels.

VCG/VCG | Getty Images
A Tesla supercharging station in Tianjin, China.

“Part of the strategic attraction to Tesla is its physical infrastructure footprint, which we believe, over time, can improve the customer experience, reduce friction points, and support the fleet management of many millions of Tesla vehicles on the road and in both captive and 3rd party commercial fleets,” Jonas said.

Morgan Stanley estimates Tesla will expand the supercharger network to 15,000 stations “by 2030 to support a Tesla on-the-road fleet size approaching 13 million units,” Jonas said.

Growth in Tesla's charging network “is far slower than the growth in Tesla's car population,” Jonas said he estimates. The network grew by about 40 percent year-over-year, he said, whereas the number of Tesla's on the road increased by 83 percent. Additionally, the Tesla fleet “has grown far faster than its physical store and service location network, raising investor concerns about strain on the system,” Jonas said.

“While Tesla has made efforts to address issues with service quality (such as increasing its Mobile Service fleet to 411 vehicles), the customer service experience appears to have significant room to improve,” Jonas added.

Tesla shares rose 1.3 percent in premarket trading from Monday's close of $312.84 a share. Morgan Stanley has an equal-weight rating on Tesla and a price target of $283 a share.

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Ford investing $1 billion, adding jobs at Chicago factories as it makes cuts overseas

Tim Boyle | Bloomberg | Getty Images
A worker assembles a 2011 Ford Motor Co. Explorer at a plant in Chicago, Illinois, U.S., on Wednesday, Dec. 1, 2010.

Ford is sinking $1 billion and adding more jobs to plants in the Chicago area to expand production of the redesigned Ford Explorer and Lincoln Aviator sport utility vehicles.

The expansion comes as the automaker makes cuts overseas and shifts its lineup to make more SUVs, crossover-utility vehicles and trucks and away from sedans and sports cars, which have fallen out of favor with American drivers.

The move will add 500 jobs at Ford's Chicago-area Assembly and Stamping plants, bringing the total number of employees at the two factories to 5,800, the company said Thursday. Ford is building a new body shop and paint shop at the assembly plants and plans to make major changes to the final assembly area. The company also plans to install some new manufacturing technology, including 3D-printing tools and robots.

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It's also spending $40 million to upgrade the facilities for employees, including new LED lighting and cafeteria updates, new break areas as well as parking lot security upgrades.

In addition to the Explorer and Aviator, the plants make Ford's Police Interceptor, an SUV modeled on the Explorer.

Ford is undergoing an $11 billion restructuring that will shrink its salaried workforce of 70,000. It is also cutting thousands of jobs in Europe, where Ford has struggled to maintain solid footing.

Ford is not the only automaker that has had to reshape its business in the face of a changing industry. Rival General Motors is in the process of cutting production at plants in the United States and Canada as part of its own turnaround plan.

GM has been faced with underutilized factory capacity in plants that had heavily focused on building less popular sedans and compact cars. GM said it has offered jobs to hundreds of hourly workers at new plants building vehicles in growing segments, such as SUVs and crossovers.

Paul Eisenstein/CNBC
Joe Hinrichs, Ford president of global operations, speaks with Chicago Mayor Rahm Emanuel after the automaker announced it was investing $1 billion in Chicago area factories.

One of Tesla’s largest investors just increased its stake

VCG/VCG | Getty Images
A Tesla Model 3 car is on display during the Auto China 2018 at China International Exhibition Center on April 25, 2018 in Beijing, China.

Tesla shareholder Baillie Gifford & Co. has just increased its stake in the electric car maker, according to a regulatory filing Friday.

The U.K.-based investment management firm, Tesla's second-largest institutional shareholder, bought 108,931 of the company's shares during the fourth quarter, according to the filing and data compiled by FactSet.

It now owns just over 13.2 million shares valued at roughly $4 billion. Its stake increased from 7.64 percent at the end of the third quarter to 7.71 percent as of Dec. 31.

Tesla's third-largest shareholder ready to pony up more capital
5:03 PM ET Mon, 29 Oct 2018 | 01:17

A partner at Baillie Gifford praised Tesla CEO Elon Musk in October, and said the firm “would be willing to back him” if Musk needed more capital.

Investors have kept a close eye on Tesla's cash position. The company has had to go to markets several times since its 2010 initial public offering to fund its ambitious plans to rapidly scale battery and auto production.

However Musk had said in recent months that he expects Tesla to be profitable and cash flow positive starting in the third quarter of 2018. So far, Tesla has hit that target, delivering two profitable quarters in a row for the first time in its history as a public company.

Neither Tesla nor Baillie Gifford were immediately available for comment.

WATCH: Former Tesla CEO on electric vehicle growth

Former Tesla CEO on electric vehicle growth
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Tesla’s largest institutional investor just cut its stake in half

John Leyba | The Denver Post | Getty Images
Tesla fans standing in long lines to preorder the new Tesla in March, 2016.

T. Rowe Price cut its stake in Tesla in half during the fourth quarter, according to a government filing.

The international money manager owned 8.98 million Tesla shares by the end of last year, according to a filing at the Securities and Exchange Commission. The new, smaller stake represents 5.2 percent of the electric auto maker's common shares outstanding at the end of December. The Baltimore-based fund group reported in a prior filing that it owned 17.4 million shares, or a 10.2 percent stake, as of Sept. 30.

T. Rowe Price was the electric car maker's second-largest shareholder behind CEO Elon Musk at the end of the third quarter of 2018. The firm had $962 billion in assets under management as of Dec. 31.

Tesla shares rose almost 26 percent during the fourth quarter and were up 2.7 percent Monday afternoon, above $314 per share.

T. Rowe Price declined to comment for this story, while Tesla did not immediately responded to CNBC's request for comment.

Tesla’s electric vehicle dominance is about to have ‘serious competition,’ Morgan Stanley says

Former Tesla CEO on electric vehicle growth
2:44 PM ET Thu, 7 Feb 2019 | 04:06

Tesla's domination of the electric vehicle market is “unsustainable” and will soon be disrupted by start-up Rivian, Morgan Stanley analyst Adam Jonas said Monday.

Jonas, whose thoughts on electric autos are widely followed on Wall Street, expects Rivian will be “the next serious competition from a 'clean sheet' start-up with access to talent & capital focused on the fastest growing segments of pickup trucks & SUVs.” He estimates that Tesla makes about 80 percent of the U.S. EV market, capturing as much as 90 percent of U.S. electric vehicle revenues.

Rivian, based outside Detroit, previewed its R1T electric truck prototype at the Los Angeles Auto Show in November. Rivian said the R1T will deliver 400 miles of range, with four individual motors allowing for all-wheel-drive. Additionally, Rivian CEO R.C. Scaringe said the R1T will be able to hit 60 mph in 3 seconds and tow up to 11,000 pounds.

Bloomberg | Bloomberg | Getty Images
RJ Scaringe, founder and chief executive officer of Rivian Automotive Inc., unveils the R1T electric pickup truck, left, and R1S electric sports utility vehicle (SUV) during a reveal event at AutoMobility LA ahead of the Los Angeles Auto Show in Los Angeles, California.

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.”

Rivian is also building the R1S, an electric seven-passenger SUV. Rivian says the R1S will also have a range of over 400 miles.

Jonas said Morgan Stanley has a “strong belief that all-electric vehicle architecture will need a truly 'clean sheet' approach” to take on Tesla, rather than “adapting existing legacy [original equipment manufacturer] architecture.”

“We believe companies like Rivian will take elevated importance in investors' minds as EVs become the focus of OEM investment and strategy,” Jonas said.

– CNBC correspondent Paul Eisenstein and CNBC's
Michael Bloom
contributed to this report.

Fiat Chrysler shares plummet 12 percent on weak outlook

Rebecca Cook | Reuters
Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Fiat Chrysler shares crashed by more than 12 percent Thursday morning after the Italian-American automaker forecast a weak outlook for 2019.

The automaker said it expects results in the first half of the year to be down over last year, in part, because the company will not be selling two generations of the Jeep Wrangler side-by-side, as it did in 2018. It is also planning some Wrangler production downtime to retool factories for launch of the plug-in hybrid version of the iconic off-road machine in early 2020.

The company also said continued actions to manage dealer inventories will also hit its finances in the first half of the year. It is also facing higher-than-expected capital expenditures, shelling out roughly 500 million euros in connection with U.S. diesel emissions cases. It's also paying an effective tax rate that's about 25 percent higher than it was in 2018, mostly due to changes in the U.S.

Fiat Chrysler said expects the second half of the year to pick up from sales of its recently released Jeep Gladiator mid-size pickup truck and its heavy duty Ram pickup trucks, introduced at the Detroit auto show.

The automaker said it expects total industry sales for North America to decline in 2019 to 17.2 million, down from 17.7 million in 2018, the automaker said in a presentation to investors.

Amazon just invested in self-driving car company Aurora

Leonard Ortiz | Digital First Media | Getty Images
Jeff Bezos, founder and CEO of Amazon, speaks to a group of Amazon employees that are veterans during an Amazon Veterans Day celebration, to honor the Warriors@Amazon, a group of employees who have served in the military and their spouses, in an event outside a hanger at the Long Beach Airport in Long Beach on Monday, November 12, 2018. The event included the unveiling Amazon's 40th airplane named Valor in honor of the group. (Photo by Leonard Ortiz/Digital First Media/Orange County Register via Getty Images)

Self-driving car startup Aurora announced on Thursday that it has raised more than $530 million in funding, from investors including Amazon, Sequoia and the investment arm of energy giant Shell.

“This funding and partnership will accelerate our mission of delivering the benefits of self-driving technology safely, quickly, and broadly,” Aurora said. Aurora's management has a lot of experience in the automotive industry.

The company's CEO and co-founder Chris Urmson is the former CTO of self-driving cars at Alphabet, which owns the autonomous vehicle firm Waymo. Co-founder and chief product officer Sterling Anderson led the design and launch of the Tesla Model X, according to Aurora's website. Drew Bagnell, Aurora's chief technology officer and co-founder helped found Uber's Advanced Technology Center.

“We are always looking to invest in innovative, customer-obsessed companies, and Aurora is just that,” Amazon told CNBC in a statement. “Autonomous technology has the potential to help make the jobs of our employees and partners safer and more productive, whether it's in a fulfillment center or on the road, and we're excited about the possibilities.”

The Wall Street Journal said last year that Amazon has a team dedicated to building autonomous vehicle technology. Amazon also announced a partnership with Toyota last year that will help Amazon explore ways to use self-driving cars to deliver food. Earlier this week, CNBC reported that Amazon is already hauling cargo in self-driving trucks developed by Embark.

Rather than manufacturing its own vehicles, Aurora is working with incumbents like VW and Hyundai, as well as Byton in China, to develop self-driving cars. It competes with Waymo, other venture backed autonomous vehicle start-ups like Zoox, and self-driving companies that were acquired by Ford and GM, Argo.AI and Cruise, respectively.

Neither Amazon nor Aurora revealed just how much of the new funding round came from Amazon. The e-commerce titan's investment in Aurora follows its addition of risk language in its 10K filings, that Amazon views “transportation and logistics services” as competition.

Amazon's delivery costs exceeded $27 billion in 2018. Using advanced driver-assistive technology, or fully self-driving vehicles, could help it curb delivery costs.

-CNBC's Deirdre Bosa and Lora Kolodny contributed to this report.

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Amazon Echo is a key part of company's future, says NYT columnist
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Toyota debuts new Tacoma to protect its crown as No. 1 midsize pickup from encroaching US rivals

Source: Toyota
2020 Toyota Tacoma TRD Off-Road

The pickup wars are spreading.

Toyota refreshed its best-selling Tacoma mid-size pickup trucks with Apple Car Play, larger touch screens and other features drivers have come to expect in today's utility vehicles, the company said Thursday. The Japanese automaker's move comes as American automakers — not content to rule the full-size segment —release smaller trucks that threaten the one category where Toyota has managed to hold its own with the Big 3 in Detroit.

Source: Toyota
2020 Toyota Tacoma Limited

The Tacoma has led the mid-size pickup segment in sales in the U.S. for the last 14 years, and the company is anxious to hold onto that crown. Ford just brought back the Ranger mid-size pickup truck, and Chevrolet has been successful with its Colorado.

Even Jeep is getting into action. Fiat Chrysler's brand known mostly for sport utility vehicles launched the Gladiator pickup at the Los Angeles Auto Show late last year. As the historical leader in the segment, Toyota has the most to lose.

The good news is this segment is growing overall, as the broader market turns toward utility vehicles. Mid-size pickup sales are expected to grow from about 3 percent of the total market in 2018 to 4 percent by 2021, according to data from LMC Automotive, a firm that tracks the auto industry.

Source: Toyota
2020 Toyota Tacoma Limited

The number of models is also expected to grow, reversing a multi-year pullback in the segment. In 2010, there were 11 mid-size pickup trucks to choose from, according to LMC. But there were only five models from 2014 to 2018. But again, by 2021, that is expected to more than double again back to a total of 11.

Source: Toyota
2020 Toyota Tacoma TRD Off Road

Toyota's refresh is not a dramatic redesign, said IHS Markit analyst Stephanie Brinley. But it's adding some key upgrades, such as an improved infotainment systems with Apple Car Play, and a few other features that customers have come to expect in new vehicles. A larger touchscreen in the truck's console will come standard on every model. Each trim level will come with upgrades specific to that variant, such as new grille designs and new headlights and taillights.

Source: Toyota
2020 Toyota Tacoma TRD Pro

In addition to overhauling the Tacoma, Toyota is beefing up its TRD Pro off-road racing lineup, adding a TRD Pro version of its three-row Sequoia sport utility vehicle. Toyota already makes TRD Pro versions of its Tacoma and Tundra pickups and its 4Runner SUV.

Source: Toyota
2020 Toyota Tacoma TRD Pro

Off-road and sporty on-road variants of pickup trucks and SUVs have been around for a long time, but automakers seem to be beefing up their selection of packages and options. Automakers are looking to leverage the shift to trucks and SUVS as an opportunity to find new ways to package features and capabilities to net a few more customers wherever they can.

“Every type of vehicle, every capability, every price point is looking to be exploited,” Schuster said. “It is a fight for customers and a fight for market share.”