Author: CNBC Online news

Ford’s 5 big fixes for its troubled international business

Hauke-Christian Dittrich | picture alliance | Getty Images
At Ford's stand at the IAA Commercial Vehicles, an off-road vehicle of the Ford Ranger type is on a Ford Transit van.

Ford reported fourth-quarter earnings that fell short of what investors expected, laying the blame for its lackluster performance on restructuring costs and troubled markets overseas.

Ford's difficulties in Europe, China and South America have been no secret, and executives devoted a fair amount of time on a their earnings call Wednesday explaining the company's weaknesses and what they're doing to address them.

“Ford entered 2019 with a very clear vision and we're building momentum to improve profitability and returns,” said CEO Jim Hackett on a conference call on Wednesday. “We're now in execution mode.”

Its shares rose by more than 3 percent in intraday trading Thursday.

Here are the top five things executives said Ford is doing to turnaround its international sales.

New products

Source: Ford
The Ford Territory, a mid-sized SUV Ford unveiled in China

Ford is revamping its lineups all over the world, focusing on selling only its most profitable models. In the United States, this mostly means pickup trucks and sport utility vehicles. In Europe, this includes pushing the Ranger, its mid-size pickup, and offering higher-performance sports packages for the Fiesta subcompact car and Focus compact car overseas.

Perhaps the biggest push is in China, which is the largest auto market in the world and a sore spot for Ford. Chinese automakers already offer consumers there a lot of options, forcing importers to constantly refresh their lineups or get left behind like Ford.

“China is the largest automotive market in the world and we think it could be twice the size of the U.S. by 2025. So getting our business back on track is essential,” Ford Executive Vice President of Global Markets Jim Farley told investors. “Last year as we discussed you with you, we identified a number of operating shortfalls,” he said, citing dealership profitability, excess inventory and a lack of a fresh lineup of new vehicles as major deficiencies in China.

Last year, the company unveiled a sport utility vehicle that is meant to kick off a slew of new products for the country. This includes a new version of the Escape compact SUV, and Focus. Both vehicles saw transaction prices double in China in 2018. Ford has ten more models on the way, Farley said.

Dealer profitability

Qilai Shen | Bloomberg | Getty Images
A Ford Escort on display at a Ford dealership in Shanghai, China, on Thursday, July 19, 2018.

Keeping dealerships profitable has been a big problem for Ford, particularly in China. The company has taken some steps to address this, and about one third of its dealers in China are now profitable. The company expects the trend to continue upward through the year, Farley said.

Local production

Meghan Reeder | CNBC
Cars roll down the assembly line at the Ford plant in Chongqing, China.

Automakers typically build where they sell, but sometimes import and export vehicles from one country to another. The ongoing trade war has not been kind to the business, primarily driving up the cost of materials. Tariffs alone cost Ford $750 million in 2018.

Ford said it can make money-losing cars more profitable just by focusing more of the supply chain and assembly near the market they're destined for sale.

“Simply by sourcing from a true local Chinese supply base, we will cut our material costs and we are targeting significant reductions in structural costs for consolidated operations,” Farley said.

Ford said Wednesday it needs to “localize” some key imports into China, specifically the Ford Explorer and some Lincoln vehicles, which tend to command high prices and yield profits for the brand.

“The effect of that is pretty amazing when you look at each of the Lincoln products and the Explorer in terms of going from what now are quite substantial losses for those imports to very attractive mostly business cases,” Farley said.

Cutting losses

Oliver Berg | picture alliance | Getty Images
Ford employees assemble the StreetScooter Work XL in North Rhine-Westphalia, Cologne. For the first time, Deutsche Post DHL is not building the street scooter itself, but in cooperation with carmaker Ford.

Unlike rival General Motors, which determined its European business wasn't worth keeping, Ford's problem is that many of its international operations are a mixture of good and bad, said Jeffries analyst Philippe Houchois. It's especially an issue in Europe where it recently announced job cuts and a new partnership with German automaker Volkswagen.

More details about how the two automakers intend to work together need to be revealed, but many industry analysts think collaborating with VW will allow Ford to keep a foothold in Europe, where it currently has successful commercial transit van and pickup truck businesses that has grown in market share for the last five years.

More restructuring

Paulo Fridman | Corbis News | Getty Images
Assembly line of engines for the Ford KA 1.0 3 cylinders at the Ford Engines plant in Camaçari, Brazil.

Ford's $11 billion restructuring plans, which Hackett had largely kept a mystery from investors, are beginning to take shape. He told investors “more details” will be coming on its plans to overhaul its business in South America, where Ford, and many automakers, have historically had uneven performance.

General Motors gears up to ‘electrify’ GMC pickup trucks

Jeff Kowalsky | Bloomberg | Getty Images
2019 GMC Sierra SLT truck is unveiled during an event at Russell Industrial Complex in Detroit, Michigan, on Thursday, March 1, 2018.

With its CEO setting a goal of going 100 percent electric, General Motors is taking a close look at how, if not when, to offer an all-electric SUV, according to the head of the automaker's GMC truck brand.

While it is not clear how far along such plans have come, GM would join a growing list of automakers looking to electrify some of their biggest and brawniest vehicles. A senior Ford executive just last week confirmed that an all-electric version of the F-series pickup is now in the works.

“Certainly, it's something we're considering,” Duncan Aldred, the vice president of the GMC brand, told CNBC when asked about the prospects of an all-electric version of the big Sierra pickup. While Aldred wouldn't confirm if development is already underway, he pointed to comments made by GM CEO Mary Barra last March that the carmaker is on a “path to an all-electric future.”

Source: Ford Motor Company
The Ford F-150 Raptor was modeled in part off desert-racing trucks, and is best suited for “overland” off-roading as opposed to rock crawling.

An all-electric version of the GMC Sierra would all but certainly be accompanied by a battery-electric version of the more mainstream, albeit higher-volume Chevrolet Silverado, said David Cole, director-emeritus of the Center for Automotive Research in Ann Arbor, Michigan. Both trucks share the same underlying platform, as well as conventional internal combustion powertrains. That would increase economies of scale and bring down the cost of developing and producing a battery drive system, several industry observers pointed out.

“They wouldn't be saying this if they weren't really confident about doing it,” Cole said. After having spent time at the GM battery lab recently, Cole said the automaker “wants to be at the forefront of battery-electric technology.”

But there are several key issues driving the company's pace of product development, including the need for batteries that can both deliver better range and come down in price. When the Chevrolet Bolt EV launched in late 2016 product development director Mark Reuss — now GM's president — said it had driven the cost of battery cells down to around $145 a kilowatt-hour. Cole said GM's target is “lower” than $100, a figure that could put its future all-electric drivetrains close to parity with comparable diesel and gas technology. Battery cells generally cost between $150 to $200, according to estimates from researchers at Boston Consulting Group.

How soon that would happen is unclear. For his part, GMC chief Aldred told CNBC that battery technology still carries a fairly hefty premium that makes it difficult to target mainstream segments, unless a carmaker like GM is willing to accept lower margins. As a result, the executive said, automakers would likely target higher end products.

Pickups, on the whole, carry some of the highest profit margins in the auto industry, particularly some of those sold through the GMC brand. But the entire industry has been pushing pickups up-market, adding on more options and luxury touches to drive up the price. Ford is now offering a version of its F-Series loaded with luxury car features that carries a price tag nudging $100,000.

“It's always a mistake to introduce a new technology on a lower-priced product,” said CAR's Cole. “You have a better opportunity to cover costs if it's on a high-end vehicle.”

Ford has not offered any details about the planned all-electric pickup that was announced by its president of global operations at a conference in Detroit last week. But Cole and others believe it will also target a premium, personal use segment of the market, rather than more traditional, commercial users, such as builders and contractors.

Detroit automakers continue to dominate the full-size pickup segment and offer a broader range of options, including powertrains, than import rivals. Company officials have not said whether the third domestic manufacturer, Fiat Chrysler, will also launch an all-electric model, though during a media event at the North American International Auto Show last week, CEO Mike Manley indicated the company will be expanding its electrified portfolio.

Tesla
Tesla Chief Executive Elon Musk unveils a sketch of a pickup truck at an event in Hawthorne, California on November 16, 2017.

Whether Toyota and Nissan — the other two full-size truck manufacturers — will follow suit is unclear. But there will soon be new competition from several upstart brands. Tesla CEO Elon Musk previewed a prototype all-electric truck in 2017 and the company could have it ready to join current offerings like the Models S, X and 3 by sometime in 2020, he has indicated.

Then there's Rivian, a suburban Detroit start-up that previewed its own full-size prototype at the Los Angeles Auto Show in November. If it lives up to its initial billing, the truck could match, and even exceed the expectations of many pickup buyers, in fact.

The company says it will deliver 400 miles of range, with four individual motors allowing for all-wheel-drive. The truck is expected to make “close to 800 horsepower,” Rivian CEO R.C. Scaringe said during a press conference at the show. He also said the R1T will be able to hit 60 in 3 seconds and tow up to 11,000 pounds. That would make the Rivian the world's fastest pickup and give it towing capacity equal to some of the beefiest versions of the Ford F-150, GMC Sierra 1500 and Chevrolet Silverado 1500 now on the road.

Paul Eisenstein/CNBC
Rivian CEO R.C. Scaringe with R1T electric pickup at the 2019 LA Auto Show.

Disclosure:
Paul Eisenstein
is a freelancer for CNBC. His travel and accommodations for this article were paid by General Motors.

Apple just dismissed more than 200 employees from its autonomous vehicle group

Brendan McDermid | Reuters
Tim Cook, CEO, Apple

Apple dismissed just over 200 employees this week from Project Titan, its stealthy autonomous vehicle group, people familiar with the matter told CNBC.

An Apple spokesperson acknowledged the lay-offs and said the company still sees opportunity in the space:

“We have an incredibly talented team working on autonomous systems and associated technologies at Apple. As the team focuses their work on several key areas for 2019, some groups are being moved to projects in other parts of the company, where they will support machine learning and other initiatives, across all of Apple,” the spokesperson said.

“We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever,” they added.

In August 2018, Apple enlisted a Tesla engineering vice president and Apple veteran, Doug Field, to lead the Titan team alongside Bob Mansfield. This week's dismissals from the group were seen, internally, as anticipated restructuring under the relatively new leadership.

Other employees who were impacted by the restructuring of Project Titan are staying at Apple, but moving to different parts of the company.

Of late, Apple CEO Tim Cook has touted his company's initiatives in health as the key to its future growth. “I believe, if you zoom out into the future, and you look back, and you ask the question, “What was Apple's greatest contribution to mankind?” it will be about health,” Cook told CNBC's Jim Cramer.

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Meanwhile, Apple executives have remained mum in recent months on the company's car prospects, which appear to have been scaled back from the initial rumored vehicle to a focus on software. In 2016, Apple laid off employees from the same group, shifting its strategy. Fully self-driving cars remain experimental, even for major players in the field such as Waymo, Cruise and Tesla.

Venture investors and strategic investors from the traditional automotive world have poured billions into start-ups developing self-driving vehicles including: Zoox, Pony.AI, Aurora, May Mobility, Embark and others.

— Paul Eisenstein and CNBC's Jordan Novet contributed to this report.

Ford misses profit estimates as pension and layoff costs erode earnings

Daniel Acker | Bloomberg | Getty Images
A Ford Motor Co. Explorer Hybrid sports utility vehicle (SUV) is displayed during the 2019 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S., on Monday, Jan. 14, 2019.

Ford's reorganization plans showed up in its fourth-quarter earnings Wednesday as pension and layoff costs eroded the company's profit and caused it to miss earnings estimates — despite posting stronger-than-expected sales.

The Detroit automaker has been struggling overseas, and that was apparent in the fourth quarter. While Ford grew its revenue in North America by $1.7 billion, it fell in every other region across the globe. It lost market share in every major market in South America except Peru. Unfavorable exchange rates and a drop in sales volume also hurt Ford's bottom line, especially in Europe and Asia.

Ford also said it faced financial headwinds of $750 million from tariffs, another $1.1 billion from commodities costs, $750 million in unfavorable foreign exchange, and $775 million related to recalls announced last year in North America, said Ford Chief Financial Officer Bob Shanks on a conference call after the automaker released results.

Here's how the company did compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

— Adjusted earnings per share of 30 cents vs. a forecast of 32 cents per share

— Automotive segment revenue: $38.7 billion vs. a forecast of $36.88 billion

Ford took a $1.18 billion charge for “special items” that were excluded from its adjusted earnings. The charges stem mostly from pension and layoff costs. On an unadjusted basis, Ford lost $116 million, or 3 cents a share, during the fourth quarter. It generated a profit of $2.52 billion, or 63 cents per share, a year earlier.

The company's total revenue was $41.8 billion during the quarter, slightly higher than its $41.3 billion in revenue during the same quarter last year.

“While 2018 was a challenging year, we put in place key building blocks to build a more resilient and competitive business model that can thrive no matter the economic environment,” Shanks said in a statement.

Despite the losses, Ford expects to be able to fully fund its business and capital needs in 2019, while keeping cash and liquidity at or above target levels, Shanks said.

On an adjusted basis, the company earned 30 cents a share, which missed analyst expectations of 32 cents per share, according to analysts surveyed by Refinitiv. It was also less than the 39 cents a share the company reported in the same quarter of 2017.

Ford's shares have been under pressure all year, tumbling by about 22 percent over the last 12 month, closing at $8.34 a share Wednesday.

The automaker is undergoing an $11 billion restructuring plan that has so far involved trimming back international operations, making investments in new mobility technologies, and realigning its portfolio around more profitable vehicles.

That strategy includes doubling down on segments where Ford has historically been strongest — trucks, utilities, and muscle cars. The automaker unveiled a refreshed version of its best-selling Explorer sport utility vehicle at the Detroit auto show and is also broadening its Mustang lineup.

Ford also said it is partnering with German automaker Volkswagen on a number of initiatives, shortly after announcing job cuts across its European operations. The first agreement the two firms signed appeared to benefit VW more than Ford, said Jeffries analyst Philippe Houchois. But it allows Ford to remain in its most profitable businesses in Europe while cutting costs and pulling out of areas where it is failing.

“The issue that Ford has had around the world is that everywhere they operate, Ford's business is a mix of good and bad,” Houchois said in an interview Tuesday. Ford's position in Europe is different from that of rival General Motors, which decided nothing in Europe was worth salvaging when it sold its operations in the region to French automaker Groupe PSA.

“For Ford it is more complicated,” Houchois said. Ford's commercial van business is significantly smaller than its F-150 pickup truck franchise, but it's probably the company's second-most profitable product and its market share in Europe is key. “So they can't just pull out of Europe. They have to find ways of being sustainable there, which is more complicated, but could have some benefit long term.”

The company is holding a conference call with CEO Jim Hackett and other executives at 5:30 p.m. ET to discuss the results.

This story is breaking news. Please check back for updates.

Porsche doubles production of the electric car it hasn’t even released yet in run for Tesla’s market

Source: Porsche
2019 Porsche Taycan

Porsche is already having to double its production plan on the electric car it hasn't even released yet.

The German car maker known for its sports cars and racing heritage said stronger-than-expected demand has led it to boost production on its electric Taycan car from 20,000 to 40,000 units, the company confirmed to CNBC on Wednesday.

Source: Porsche
2019 Porsche Taycan

“We had been ready for it,” said Andrew Lennon, a manager of product communications for Porsche. “We had the ability to increase capacity from the beginning, and executives recently made the decision to go ahead.”

Porsche announced a second variation of the vehicle based on the Cross Turismo concept in October. The company began taking orders last summer and expects the car to be available for sale in the U.S. by the end of the year.

Source: Porsche
2019 Porsche Taycan

The Taycan is yet another example of several high-end electric cars expected to enter the market over the next few years. For example, Jaguar launched the I-Pace electric crossover last year, Audi plans to soon roll out its e-tron sport utility vehicle. Even Ford plans to offer a high-performance electric inspired by its Mustang sports car.

The sports car is expected to give Tesla a run for its money, or at least a run for its customers. Tesla sold 245,240 vehicles last year, 145,846 Model 3 sedans and a combined 99,394 Model S sedans and Model X SUVs.

Source: Porsche
2019 Porsche Taycan

The Taycan, which the company says roughly translates to lively young horse, is expected to start at around $80,000 according to Electrek magazine.

Porsche sold 57,202 vehicles in 2018, almost half of which were its Macan cross-over utility car. Its popular SUV, the Cayenne, had 10,733 in sales and its signature 911 sports car sold 9,647 units. Sales of its 718 entry-level sports car and Panamera sedan made up the rest.

The Jaguar I-PACE is its first, all-electric vehicle.

Tesla slashed Model S and X staff in recent layoffs

Noah Berger | Bloomberg | Getty Images
An employee works on a Telsa Motors Model S sedan as it makes its way along an assembly line at company's assembly plant in Fremont, California.

New details are emerging about Tesla's second round of layoffs in just seven months.

Deep cuts occurred in its sales, delivery and Model S and Model X production teams, according to current and newly laid off workers. These people also said that Tesla has suspended night time production of its Model S sedans and Model X SUVs at its Fremont, California car plant.

According to a separation agreement obtained by CNBC, salaried Tesla employees whose roles were terminated will receive a minimum of 60 days of pay and benefits, regardless of whether or not they sign the agreement. Those who sign can also get some of their COBRA healthcare paid for by Tesla after their coverage ends in March, with additional severance pay depending on the amount of time they worked for the electric vehicle maker.

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Laid off employees must accept or reject their severance package from Tesla within seven days of receiving it, with many getting their “pink slip” on Saturday.

Two dismissed employees said layoffs resulted in their losing stock options they were promised but had not vested yet. They scored the options as part of seemingly lucrative bonuses during their tenure at Tesla, but were disappointed the shares were worth hundreds instead of thousands of dollars due to the layoffs and vesting schedules.

Two other former employees, dismissed in a prior round of layoffs, described the same impact to their income from bonuses, too.

These people noted that full-time equivalent hourly workers let go by Tesla received different packages, and in the recent layoff, some were only granted two weeks' pay.

Which groups were affected

According to an ex-employee who was involved in Tesla's delivery operations, and a current employee who works for Tesla in Fremont, the layoffs appear to have impacted workers across every department and region from factory workers to recruiters and receptionists. But deep cuts apparently hit Tesla's delivery, sales and Model S and X production teams.

Laid off workers from the company's battery plant near Reno, Nevada, and car plant in Fremont, California, as well as one of its delivery centers, say they were walked out by security or by their managers on Friday, some after working a full shift.

At least a half-dozen security professionals were let go from “GF1,” in a continued re-configuration of that department following the departure of Jeff Jones last year.

A current Tesla employee in Fremont said that Model 3 production staff and software engineers seemed least likely to be cut. This person also said that in recent weeks, Tesla moved a handful of workers from the group that makes Model S sedans and Model X SUVs in Fremont into new shifts, or new positions involved in Model 3 production or logistics.

As part of its restructuring and cost-cutting measures, Tesla eliminated nighttime production of Model S and X vehicles, according to a laid off employee familiar with the matter. The company let go of at least a half-dozen maintenance techs on the night shift there, and moved others into a day shift, this person said.

A Deutsche Bank analyst, Emmanuel Rosner, wrote in a note to investors on Friday: “We think the job cuts are mostly driven by efficiency gains in manufacturing and continued opex discipline to ultimately enable profitability on the entry level Model 3.”

A former Tesla engineer agreed that the company made significant improvements to its Model 3 production process in recent months. But Tesla has long debated whether or not it should “sunset” either the Model S or X, or move production of these vehicles out of the crowded Fremont factory, this person added, noting there is no “upgrade” team in place to refresh either the S or X yet.

A Tesla spokesperson said:

“We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3. As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly. At the same time, these changes, along with continuing improvements, give us the flexibility to increase our production capacity in the future as needed. We'll be providing more details on our earnings call next week.”

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A current employee said that Fremont factory workers were in the dark about the company's broader strategy, but felt it was clear Tesla wouldn't be able to cut costs massively, or cram a new Model Y line inside of that plant while also making the same volume of S, X and Model 3's there.

Tesla said it has no plans to sunset the S or X lines.

Separation agreement details

Among other things, Tesla asked laid off employees via separation agreements to:

Promise not to “disparage Tesla” including the company's officers, directors, employees, shareholders, agents, affiliates, subsidiaries, and products in any way that's “Likely to be harmful to them or their business, business reputation or personal reputation.”Refrain from sharing details about their separation agreement with the public, or with other current or former Tesla employees and contractors.Cooperate with Tesla in connection to claims against or by the company– this means laid off employees would share names or correspondence with Tesla if called on, and appear in court or be deposed without the company issuing a subpoena.Resolve disputes around the separation agreement through arbitration, instead of in a class action suit for example.

Friday's move marked the second time in seven months that Tesla dismissed thousands of its full-time employees, outside of regular performance review-related terminations. It laid off about 9 percent of its employees in June 2018 in a separate restructuring.In an e-mail to all employees at that time, CEO Elon Musk said: “We are making this hard decision now so that we never have to do this again.”

Tesla also dismissed a number of employees in the final months of 2018, following its annual performance reviews, according to three people who worked for Tesla at that time.

Current employees said that performance reviews for many full-time employees started in November 2018, but reviews of associates were now underway, and they expected additional terminations to follow the layoff.

Since the layoffs announcement Friday ahead of trading, Tesla's stock has declined about 20 percent.

WATCH
: Tesla shares fall after layoff announcement.

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Ghosn’s bail is again denied as he faces a long stretch in jail

Marlene Awaad | Bloomberg | Getty Images
Nissan's former chairman Carlos Ghosn was denied bail by a Tokyo court on Jan. 22, 2019.

For the second time in a week, Carlos Ghosn lost a court fight to be granted bail. The latest defeat came Tuesday in Tokyo when a judge denied an appeal from the former Nissan CEO.

The decision means Ghosn will likely remain in detention until early March.

In his latest petition for bail, the 64 year old offered to pay a higher amount, put up his Nissan stock as collateral and surrender his passports.

“I want to emphasize that I will reside in Japan and respect any and all bail conditions the Court concludes are warranted,” Ghosn wrote in a statement. “I will attend my trial not only because I am legally obligated to do so, but because I am eager to finally have the opportunity to defend myself. I am not guilty of the charges against me and I look forward to defending my reputation in the courtroom; nothing is more important to me or to my family.”

Ghosn has been in jail in Japan since November as Japanese authorities have investigated allegations he and another Nissan executive, Greg Kelly, did not disclose the full amount of Ghosn's compensation over several years. While in detention in a Japanese jail, Ghosn has not been allowed to have direct contact with his family. He remains incarcerated while awaiting trial on charges he committed financial crimes while serving heading Nissan.

At a bail hearing earlier this month, Ghosn spoke publicly for the first time about his detention and denied the charges against him.

“I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations,” Ghosn told the judge at his hearing.

Last week, Ghosn's wife released a letter she sent to Human Rights Watch decrying the treatment her husband has faced while detained and investigated.

“For hours each day, the prosecutors interrogate him, browbeat him, lecture him, and berate him, outside the presence of his attorneys, in an effort to extract a confession. No human being should be detained under conditions so harsh that their only plausible purpose is to coerce a confession,” Carole Ghosn wrote.

Toyota brings back the Supra sports car after almost two decades

Toyota reveals the first new Supra in the US in 21 years
9:48 AM ET Mon, 14 Jan 2019 | 01:22

With the new Supra sports car, Toyota is bringing back a car that is probably one of the Japanese automaker's most beloved names.

But don't expect it to be a huge seller, say analysts.

That is not because the car is a dud. It is expected to be a higher-end product and has been reported to have engines sourced from German manufacturer BMW.

But production is expected to be lower volume, and the car is likely to cater to enthusiasts and serve as a halo vehicle to create buzz for the rest of Toyota's lineup.

Source: Toyota
2020 Toyota Supra

The Supra is a resurrection of a car Toyota has not made since 2002. It began as a variant of Toyota's now also defunct Celica in 1978, but was spun off as its own model in 1986. It became known as one of the most famous Japanese tuner cars of the '80s and '90s.

Apart from the reputation it earned on its own, the Supra also was famous for being featured in “The Fast and the Furious” movie franchise, in which it was driven by the late actor Paul Walker.

The car will go on sale this summer. It will have a 3.0-liter turbo six-cylinder 335-horsepower engine and an automatic transmission with paddle shifters. Toyota says the car should be able to go from 0 to 60 miles per hour in 4.1 seconds. It will have an electronically limited speed of 155 mph.

Buyers will have their choice of two trim levels, the base 3.0 model and a 3.0 Premium.

Toyota's President Akio Toyoda tested the car himself on the famed Nurburgring track in Germany, as well as elsewhere around the world.

The car will likely not come cheap, and it is not meant to be a high-volume car, said LMC Automotive President of Global Forecasting Jeff Schuster.

“It's absolutely for enthusiasts,” he said. “The name is one of those names that has some history to it. Obviously, not as much as a Mustang or a Challenger, but in its space of more of the super-tuner type of vehicle it carries a lot of weight. There is no question it will get a lot of buzz around it. But for all intents and purposes it is meant to be a small volume vehicle, at least from our expectation.”

Disclosure: “The Fast and the Furious” movies were produced by Universal Studios, which like CNBC is owned by Comcast.

CORRECTION: This article was updated to correct the car's history. It was last produced 17 years ago.

Tesla will need to make cheaper Model 3s by the second half of 2019

James Glover II | Reuters
Elon Musk

Tesla needs to get cracking on a cheaper car.

The electric vehicle maker said Friday it plans to cut about 7 percent of its workforce, which by the last company headcount would equal about 3,100 jobs. The plan is to cut costs and get closer to making the $35,000 Model 3 the company has been promising since it first unveiled the car in 2016.

Right now the cheapest Model 3 available is the midrange rear-wheel-drive model, which starts at $44,000. A long-range all-wheel-drive model starts at $51,000, and the performance model starts at $63,000.

The sales boost from the $7,500 U.S. federal tax credit is running out, and that stands to hurt demand in the United States.

One of the primary reasons for the job cuts is the fact that the cars Tesla makes are still “too expensive for most people,” CEO Elon Musk said in an email to employees announcing the reductions.

For now, Tesla has Europe to lean on, Wedbush analyst Dan Ives told CNBC. The company began allowing European reservation holders to configure their Model 3 orders in early December and plans to begin delivering some versions to the region by next month.

Tesla was not available for comment.

“If you think about the trajectory, the first half of 2019 is really Europe coming onboard,” said Wedbush analyst Dan Ives. That strength in demand will likely offset relative weakness in demand in the U.S., in large part to the waning tax credit and Tesla's relatively high prices. “But then ultimately in the second half you need the mid-range Model 3 to really start to kick in.”

Toward the end of 2018, Tesla finally seemed to have pulled itself out of the “production hell” it had been submersed in since it began Model 3 production in the summer of 2017.

With the company clearing Musk's stated goal of producing 5,000 Model 3s per week, Tesla began focusing on reducing costs and improving efficiency. Tesla's third-quarter results were surprisingly strong, making good on Musk's expectation that Tesla would be profitable and cash flow positive from the second half of 2018 onward.

There is still debate on Wall Street over whether Tesla will need to raise capital in the next 12-18 months, Ives said, adding that he thinks there is about a 30 to 35 percent chance the company will need to return to markets for cash. Tesla does have about $1.5 billion in debt due in 2019 — one tranche due in March and another in September.

Read more: Here's what every major Tesla analyst had to say about the cuts.

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Tesla has $920 million in debt that’s coming due — and it could wipe out a large chunk of its cash

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2:47 PM ET Fri, 18 Jan 2019 | 06:39

Tesla has a billion dollar debt coming due, and it could wipe out nearly a third of the company's cash if the stock price doesn't improve.

About $920 million in convertible senior notes expires on March 1 at a conversion price of $359.87 per share. But Tesla's stock hasn't traded above $359 for weeks. If the shares are about $359.87, then Tesla's debt converts into Tesla shares. If not, Tesla will have to pay the debt in cash.

Tesla reported cash and cash equivalents of $3 billion at the end of its September quarter. The company continues to reveal pressure to maintain profitability, and announced Friday it would cut 7 percent of its full-time workforce.

Shares fell more than 10 percent Friday following the announcement to trade around $310 per share.

Musk said during the company's third quarter earnings call that Tesla plans to honor the original maturation date.

“The current operating plan is to pay off our debts and not to refinance them but to pay them off and reduce the debt load and overall leverage of the company,” Musk said at the time.

Tesla had previously notified bondholders they could be paid out in a 50-50 mix of cash and common stock, according to Bloomberg. But if the stock doesn't recover above $359 — a gain of 16 percent from Friday's intraday price — by the conversion date, Tesla won't have a choice.

Correction: Tesla reported cash and cash equivalents of $3 billion at the end of its September quarter.

WATCH: Tesla is laying off workers. Here's what investors need to know.

Tesla is laying off workers. Here's what investors need to know.
8:44 AM ET Fri, 18 Jan 2019 | 05:26

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