Rivian is getting a discount on its future office space, Stellantis is picking up the pieces of German luxury automakers’ car sharing joint venture and many Ford Explorers have been recalled. All that and more in today’s Morning Shift for Tuesday, May 3, 2022.
The electric truck and SUV startup will build its second factory just east of Atlanta, and it’s just received a pledge of $1.5 billion worth of state and local incentives and tax credits to make it happen, Reuters reported late Monday.
The $5 billion plant is expected to employ some 7,500 workers once up and running. Workers will be paid an average annual salary of $56,000, Georgia’s Department of Economic Development said in a statement.
A Rivian spokeswoman in a statement said the company aimed to open the plant in late 2024, pending permit applications and approvals.
Under the agreement with the state, Rivian has until the end of 2028 to meet the 7,500 jobs target and $5 billion investment target and receive the full amount of incentives and tax savings.
Georgia’s economic development commissioner, Pat Wilson, in a statement called the plant, which also includes a battery cell production site, a historic win, putting Georgia “at the forefront of the electric vehicle revolution.”
Whether this should be considered “a historic win” is debatable, though it is certainly historic if nothing else: Georgia has never offered another company as large an incentive package, WHOI reports.
It’s a bit of good news for a manufacturer that hasn’t enjoyed a whole lot of it in recent months. The company halved its planned production output for 2022 from 50,000 units to 25,000; it also reported almost $2.5 billion in losses for the first quarter of the year, and its stock is currently worth about six times less than its $180-per-share peak last November. It’s for these reasons Rivian might have tried to bleed more money from prospective customers who’d already preordered their trucks with last-minute $10K price hikes, though the company was forced to walk those back after justifiable outrage.
And it could still get worse, because Rivian’s 180-day post-IPO lockup, where early investors are initially blocked from selling their shares, will end this coming Monday. Amazon currently owns roughly 18 percent of the EV maker, while Ford owns 11. Will they reduce their investments? Why don’t you ask Ford CEO Jim Farley? Courtesy of The Street:
Neither Amazon nor Ford will say whether they intend to reduce their stakes in Rivian. Asked about the matter, Jim Farley, CEO of Ford, declined to comment.
“As we near the, I think, 180-day lockup expiry on your investment in Rivian, how are you thinking about the options available to you in terms of this investment going forward?” J.P Morgan analyst Ryan Brinkman asked Farley during the earnings’ call.
“Are you maybe more inclined to retain some or all of the stake given the recent decline in Rivian shares?”
“Unfortunately at this point, we’re not going to comment on Rivian,” Farley responded.
The Georgia plant site is planned to be operational before the end of 2024. What shape will Rivian be in by then? Hopefully it won’t have to become a tenant in its own factory.
The White House plans to allocate $3 billion in EV battery manufacturing incentives, per an announcement made by the Department of Energy on Monday. From Reuters:
The funds will be allocated by the Department of Energy from the $1 trillion infrastructure bill President Joe Biden signed last year. Among the initiatives will be processing of minerals for use in large-capacity batteries and recycling those batteries, the agency said in a statement.
Biden wants half of vehicles sold in the U.S. to be electric by 2030, a goal he hopes will boost unionized manufacturing jobs in key election battleground states, thwart Chinese competition in a fast-growing market, and reduce climate-changing carbon emissions.
This ties into our dependence on other countries for our energy too, of course:
The administration is also positioning the measures as a step to secure energy independence and cut long-term inflation pressures exacerbated by Russia’s Feb. 24 invasion of Ukraine.
“As we face this Putin price hike on oil and gas, it’s also important to note that electric vehicles will be cheaper over the long-haul for American families,” Mitch Landrieu, the White House infrastructure coordinator, told reporters in a briefing, referring to Russian President Vladimir Putin.
It’s a nice thought, but of course the idea that these incentives might herald a new age of American energy independence falls apart the moment you consider that China owns the bulk of the world’s supply of the raw materials that are required for battery assembly, no matter where that final assembly ultimately happens. And even if we do carve out our own slice of the pie, it won’t be pretty.
The Biden administration has, to its credit, set aside another $60 million for battery recycling initiatives. $60 million doesn’t sound like a lot of money, but it’ll be imperative that we get the absolute most out of every battery, once, twice or three times over.
BMW and Mercedes-Benz once joined forces on a car sharing service called ShareNow. If you don’t recognize that extremely vague name, it’s because ShareNow gave up on making a dent on our shores in 2019. Now the two German makes have given up on ShareNow entirely and found Stellantis willing to pick up the pieces. From Reuters:
Formed last year through the merger of Fiat Chrysler and Peugeot maker PSA, Stellantis wants to become a global leader in car-sharing, using this acquisition announced on Tuesday to expand its existing business in the area.
The deal reflects different approaches by carmakers who are trying to tap new sources of revenues beyond selling vehicles, most notably in the developing area of mobility services.
“We think this reinforces our belief that premium OEMs (manufacturers) like BMW and Mercedes will focus on private car ownership and less on fleet services,” Royal Bank of Canada analyst Tom Narayan said.
“Conversely, it makes sense that volume players like Stellantis are pursuing these alternative revenue streams.”
No financial details were provided for the transaction. Italian daily la Repubblica said it was worth around 100 million euros ($105 million).
It’s worth noting that BMW and Mercedes will still operate FreeNow and ChargeNow — electric mobility and charging services — while Stellantis already had something similar to ShareNow called Free2Move, and the combination of both businesses will greatly expand the company’s car-sharing reach in terms of European cities. Good for everyone involved — I merely ask that they all choose less identical names for these things.
Approximately 250,000, due to the potential for the rear axle horizontal mounting bolt to fracture. If the vehicle is in park when this happens, it’ll roll away and be free to explore — as is its nature. Look, you can’t keep these things cooped in garages, on tight leashes. They were born to roam!
This recall extends to 2020 to ’22 model year Explorers in all their forms, from the hybrids to Police Interceptors. From Automotive News:
The defect is caused by the rear axle horizontal mounting bolt fracturing during acceleration. The fractured bolt causes a severe noise that customers describe as “loud, grinding, binding, or clunking,” NHTSA said.
If the bolt breaks, it can cause the driveshaft to become disconnected, resulting in a loss of transmission torque in the rear wheels.
NHTSA said this torque is needed to hold vehicles in park, and without it, vehicles may roll away while parked. This can cause an increased risk of crashes or injuries.
Ford said it was not aware of any reports of accidents or injuries related to the condition. It reported 235 warranty claims involving the rear axle bolt since December 2019.
If you happen to own one of the affected vehicles, you will be notified in June. Or you could just pop your VIN into the NHTSA’s recall website and see for yourself.
The German automaker and American semiconductor giant will partner on self-driving technology, according to a report from German media on Monday, courtesy of Reuters:
The car giant will use Qualcomm’s system-on-a-chip (SoC), developed specifically for automated driving, across all brands worldwide starting in 2026, the newspaper said citing company sources.
Volkswagen CEO Herbert Diess travelled to Qualcomm’s headquarters in San Diego in mid-April, where they agreed to the conditions of the deal, which sources say will cost VW around 1 billion euros, according to Handelsblatt.
To be clear, this isn’t an exclusive deal — Qualcomm’s chipsets are in a variety of vehicles from many automakers, and will continue to be. This is sort of akin to a battery partnership, like GM has with LG, or Ford has with SK. Nvidia and Intel are also active in this space.
Every now and then I pop over to eBay to see what arcade games I could get for a reasonable amount of money, briefly ponder what my life would be like if I purchased them and never make a move. Don’t be like me. There’s a Sega F1 Super Lap cabinet for for sale for under $900 in Tennessee. Delicious sprite-scaling early-’90s F1 action for under a grand. How much is your happiness worth?