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  • Lucid Motors SPAC Company Churchill Sees Big Valuation Drop

    Lucid CEO Peter Rawlinson 2020

    Lucid Motors CEO Peter Rawlinson was effusive in his praise of his soon-to-be publicly traded company.

    Weeks after revealing plans it was going to go public using a blank-check company, nascent EV maker Lucid Motors released the details about the multi-billion dollar venture late yesterday rolling the dice with the public today.

    The California-based company’s reverse merger with Churchill Capital Corp. IV started with a valuation of $24 billion. However, shares of Churchill rose as high as $65 once the deal was revealed a few weeks back. But potential issues brought the stock back to earth today where it closed at about $35 a share.

    Seen as a viable competitor to Tesla Inc., Lucid walks away with about $4.4 billion in cash in the tentative deal. The automaker will use that money to get its first product, the Lucid Air, into full production. The remainder will be used to develop the company’s next vehicle.

    Tough few trading days for EV makers

    The Arizona factory, known as AMP-1, initially will have the capacity for 30,000 vehicles annually, but expansions could take that up to 400,000.

    Tesla, long the darling of investors, saw its stock taking a hit the past few days. After floating above $900 a share for a while, it’s dropped into the mid-$670 range and a market capitalization of about $647 billion. The king of EV makers isn’t alone, virtually all publicly traded electric vehicle companies have fallen in recent days.

    Joining Tesla in a slide are Nio, Lordstown Motors, Nikola Corp., Kandi and others. After opening at $15, Lucid finished the day at around $39 a share. It ran higher than that, but slid back after it was revealed that Lucid’s first model won’t going into production until the fourth quarter of this year. It was initially slated to being production this spring.

    Lucid also revealed it would take the company five years to reach its full production rate of 250,000 vehicles annual — Tesla put out almost 500,000 in 2020 — and it won’t be cash-flow positive until 2025.

    The future is now for Lucid

    Prior to the introduction of the stock, Lucid’s CEO Peter Rawlinson, a former top executive at Tesla, was effusive in his support of his company.

    Commercial production of the Lucid Air was set to launch this spring, but officials pushed that back to the fourth quarter of this year.

    “Lucid is proud to be leading a new era of high-technology, high-efficiency zero-emission transportation,” he said in a lengthy statement. “Through a ground-up rethinking of how EVs are designed, our in-house-developed, race-proven technology and meticulous engineering have enabled industry-leading powertrain efficiency and new levels of performance.

    “Lucid is going public to accelerate into the next phase of our growth as we work towards the launch of our new pure-electric luxury sedan, Lucid Air, in 2021 followed by our Gravity performance luxury SUV in 2023.

    “Financing from the transaction will also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield purpose-built EV manufacturing facility in North America and is already operational for pre-production builds of the Lucid Air. Scheduled to expand over three phases in the coming years, our Arizona facility is designed to be capable of producing approximately 365,000 units per year at scale.

    “Lastly, this transaction further enables the realization of our vision to supply Lucid’s advanced EV technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial and utility segments.”

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  • Ford Loses $2.8B in Q4 as Restructuring, Pandemic Hit Bottom Line

    Ford CEO Jim Farley expects the company’s restructuring will begin to produce positive results.

    Ford Motor Co. ended 2020 posting a loss for the final quarter of the year as well as for the full year as the pandemic wreaked havoc on the company’s already difficult financial position.

    The automaker reported a net loss of $2.8 billion, or 70 cents per share, on revenue of $36 billion during the fourth quarter, pulling the full year’s results down to a net loss $1.3 billion, or 32 cents per share, on revenue of $127.1 billion.

    In the midst of a corporate-wide restructuring process to improve its profitability, the company was also hit hard — like most automakers — by the COVID-19 pandemic. While the numbers weren’t great, it’s a means to an end.

    “We are profoundly changing the trajectory of our earnings power,” said John Lawler Ford’s chief financial officer, “unlocking the tremendous value Ford can create for customers, shareholders and other stakeholders.”

    Sticking to the plan

    Ford CFO John Lawler said the automaker could lose 10% to 20% of its Q1 production due chip shortages.

    That earnings power is focused on securing an 8% adjusted EBIT margin, specifically 10% in the U.S. and 6% in Europe with the rest of the company’s regional operations turning a profit too. Lawler said the company’s third and fourth quarter results “provided evidence of progress” in the company’s effort to improve profitability.

    Despite the losses, Ford did improve its overall liquidity, finishing 2020 with $31 billion in cash and a total liquidity of almost $47 billion.

    On an adjusted basis, the company’s EBIT of $1.7 billion, up from $485 million during the year-ago period. The automotive EBIT margin was 3.8%. The company noted that the gains were “broad-based and largely resulted from improved pricing and lower structural costs, as well as the overlap with UAW contract-ratification costs in 2019.”

    Company officials acknowledged the year wasn’t what they hoped and were optimistic about 2021. Ford’s Lawler said the company was on course to earn $8 billion to $9 billion in adjusted EBIT – including a $900 million non-cash gain on its investment in Rivian – and generate $3.5 billion to $4.5 billion in adjusted free cash flow in 2021.

    Semiconductor shortage may hit bottom line

    This optimism comes despite an ongoing issue with semiconductor availability. Lawler said the company was diligently monitoring the situation, but it is “so liquid” that it’s tough to determine what the impact on the bottom line will be.

    He did estimate the company could lose as much as 20% of its first quarter production as plants are forced to shut down temporarily, and that those losses could continue throughout the first half of the year. It’s possible to make up some of that in the second half, he noted, but it was too early to tell.

    The shortages could lower Ford’s 2021 adjusted EBIT by $1 billion to $2.5 billion, he said. He added the company expects full-year cash and EBIT effects to be about equal – with quarterly cash implications more volatile, given the mechanics of company working capital.


  • FCA CEO Manley Gets New Assignment Following Stellantis Merger

    FCA CEO Mike Manley apparently will settle into a new role after the merger with PSA is complete: Head of the Americas.

    Mike Manley, the CEO of Fiat Chrysler Automobiles and one of the architects of FCA’s merger with PSA Group, will take a new role as Head of the Americas once the deal is completed.

    There have been numerous questions about what, if any, role the 56-year-old Manley would play after the creation of Stellantis as John Elkann, currently the chairman of FCA, will retain that post at Stellantis while PSA chief executive officer Carlos Tavares will become the new organization’s CEO. Senior officials at both of the carmakers had indicated Manley would get a new role, undefined until today.

    Crediting Manley for “having led the profound transformational and exceptional development” of both the Jeep and Ram brands, while guiding FCA through “the rough terrain of the past couple of years,” Elkann announced Friday in a letter to employees that “Mike will be asked to take up the role of Head of Americas” once the merger is completed.

    (FCA CEO Manley won’t be on the board after merger with PSA is completed.)

    Carlos Tavares, PSA (left) and Manley shake hands following the signing of the merger agreement. Manley now has a position in the new company.

    The deal, which now has cleared a number of critical hurdles, including a regulatory probe by the European Union, is expected to close sometime during the first quarter of 2021.The merger will create the world’s fourth-largest automaker by sales volume.

    The British-born Manley started his career as a trainee at UK car financing firm Swan National. He subsequently spent time working on the retail side of the business at Renault and Peugeot dealerships before joining what was then DaimlerChrysler in 2000. Three years later, he was transferred to the United States.

    Following the breakup of DaimlerChrysler and Chrysler’s subsequent push through bankruptcy, Manley found himself one of the key players in the tight-knit group of executives surrounding Sergio Marchionne, the architect of the automaker’s merger with Fiat.

    It was as the new head of the Jeep division that Manley came into the spotlight, however. The brand’s name often was used as a synonym for SUV but, despite the surging demand for utility vehicles overall, Jeep sales remained relatively stagnant. Under Manley, the brand saw demand nearly quadruple, from around 323,000 in 2009 to 1.2 million in 2015 – the numbers reaching 1.5 million last year. Manley also was given the leadership role for truck brand Ram which has seen a surge in sales of its own.

    Manley was clearly positioned as Marchionne’s top lieutenant when the two led a presentation of a new five-year plan in June 2018. But, barely a month later, Manley was elevated to the CEO spot following Marchionne’s unexpected death during surgery.

    (Fiat, PSA set to get EU go-ahead to complete Stellantis merger.)

    Manley headed up Jeep after holding several posts within the company.

    If anything, the British native continued to follow the playbook laid out by his predecessor – which included a goal of finding a new merger partner. Marchionne had, during his tenure, approached an assortment of competitors, including both Volkswagen and General Motors, repeatedly being turned down.

    FCA and PSA had already established ties by the time Manley was named CEO, jointly working on several projects. And there were rumors early in 2019 that something more substantial might be in the works. Instead, that spring Fiat Chrysler announced plans to merge with PSA’s French archrival Renault. The deal was scuttled at the last minute by the French government which worried it might cause the collapse of the Renault-Nissan-Mitsubishi Alliance.

    Months later, Manley confirmed that FCA was talking with its old ally PSA, whose list of brands include Peugeot and Citroen. The deal was completed in November 2019 but subsequent announcements raised questions about what, if any, role Manley would play in the soon-to-emerge company called Stellantis.

    Elkann, heir to Fiat’s founding Agnelli family, was to retain his position as chairman while the CEO post would go to Tavares, a former top executive at Nissan who came in to turn struggling PSA around in 2014.

    FCA Chairman John Elkann selected Manley to succeed former CEO Sergio Marchionne.

    In his role heading the Stellantis unit in North, South and Central America, Manley will have a major responsibility. That will include not only steering the enterprise’s efforts to recover from the COVID-19 pandemic but also overseeing plans to bring the Peugeot brand back to the United States. It has been out of the market for nearly three decades but laid out a multi-tiered revival plan several years ago starting with its operation of a ride-sharing service based in Los Angeles.

    Manley, who was set to directly address FCA employees on Friday, will not retain his current seat on the board once the Stellantis merger is completed. Elkann and Tavares will be the only executive members.

    (Fiat Chrysler and PSA not exactly a “merger of equals.”)

    Based on combined 2019 sales, Stellantis will immediately become the world’s fourth-largest automaker by sales volume, behind only Volkswagen, Toyota and the Renault-Nissan-Mitsubishi Alliance – but ahead of General Motors which dropped down the list after closing numerous overseas operations and selling its European Opel/Vauxhall subsidiary to PSA.


  • First Look: 2021 Nissan Ariya

    The 2021 Nissan Ariya is about the size of a Rogue SUV – but features the interior space of the bigger Murano.

    Nissan is singing a new tune. With the arrival of the 2021 Ariya, Japan’s second-largest carmaker hopes to rebuild its once-lofty position as an innovator in the emerging market for battery-electric vehicles.

    The automaker was, in fact, the first to mass market a BEV, but a decade after the launch of the original Leaf model, Nissan has not only been eclipsed by Tesla, but is being challenged by more conventional competitors, such as Volkswagen, Ford and General Motors,  each rolling out waves of new long-range battery-cars.

    The 2021 Nissan Ariya is the long-overdue battery-SUV meant to keep Nissan in the game. It’s a ground-up offering, not just a redesigned Leaf, with a brand-new platform and electric drive system that is more powerful and able to deliver longer range. Ariya also debuts Nissan’s first hands-free driving system.

    (A week with the 2020 Nissan Leaf SL Plus.)

    The Nissan Ariya will be offered in either front- or all-wheel-drive configurations.

    The new model “is the spearhead, showing our vision of the future,” said Ivan Espinosa, the carmaker’s senior vice president of global product planning, during a media roundtable ahead of the battery car’s Wednesday debut. “Ariya is not just an EV,” he emphasized. “It is showing the technical prowess of Nissan…what Nissan stands for.”

    Pronounced like the song an opera diva sings, a concept version of the Ariya made its first appearance at the 2019 Tokyo Motor Show last autumn, followed by a U.S. debut at January’s Consumer Electronics Show in Las Vegas. Though there were some design details unique to exotic concepts, like the oversized wheels, the show car will go into production with only minor changes.

    The 2021 Ariya rides on a flexible new architecture, Espinosa explained during the online meeting. It eventually will be used for a variety of battery-cars to be produced not only by Nissan but also by its two alliance partners, Japan’s Mitsubishi and France’s Renault.

    (Nissan lifts the covers on the next-gen Rogue.)

    Features like the grille-less nose help reduce aero drag.

    “The beauty of this platform is it’s modular (which) allows us to accommodate different possibilities,” he said, adding that the three partners have “a lot of questions about what new areas of the market we can explore.”

    As with key competitors like Tesla, Ford, GM and VW, the platform positions its batteries, motors and other key components below the load floor. That reduces the size of the traditional engine compartment, allowing significantly more freedom, said Nissan’s global styling chief Alfonso Albaisa. And the development team found other breakthrough strategies. Rather than mounting the climate control, or HVAC, system within the instrument panel, it was moved into the modest space left where an engine would normal go, freeing up more space for the passenger compartment.

    “You get inside and you’re really shocked,” suggested Albaisa, pointing out that the exterior footprint of the Nissan Ariya is about as big as the subcompact Rogue SUV, but the cabin has the roominess of the much larger Murano.

    (Nissan among automakers taking big sales hit in Q2.))

    The interior borrows heavily from the Ariya concept.

    From an exterior design perspective, the Ariya is far less geeky than the Leaf which was designed during an era when green machines were expected to look like something from a sci-fi flick. That said, there are some obvious cues that tell you it’s a BEV, starting with absence of a conventional grille – electric vehicles needing far less disruptive airflow under the hood. Slit headlamps each feature four distinct LED bulbs. From the side, the crossover adapts a curvaceous, coupe-like shape, with plenty of subtle details designed to cheat the range-stealing wind – including twin rear spoilers.

    Inside, Albaisa’s team adopted a minimalist approach, with a floating, horizontally oriented instrument panel featuring side-by-side video screens, each measuring 12.3 inches. One of the neat tricks is the ability to swipe across the infotainment display and move elements to the primary gauge display. The lack of a center tunnel creates a flat floor that makes it possible to sit five inside with reasonable comfort.

    The new modular architecture is, fundamentally, front-wheel-drive, though buyers also will have the option of ordering an all-wheel-drive, twin-motor package. Nissan started all but from scratch, developing a new electric drive system it has dubbed e-4ORCE. The system has been described as the “spiritual offspring” of the automaker’s GT-R sports car, and that underscores a fundamental shift in thinking. No longer does Nissan believe BEV buyers will sacrifice that fun-to-drive quality just to go green.

    Ariya will offer a standard battery or a 300-mile option.

    The front-drive system delivers 160 kilowatts, or about 214 horsepower, and 221 pound-feet of torque. The twin-motor AWD system bumps that up to 290 kW, or 389 hp, and 443 lb-ft. The e-4ORCE system can direct power to individual wheels, using torque to assist driver input, among other things, when tracking through a corner.

    That also pays off when using the next-generation ProPilot Assist 2.0, Nissan’s semi-autonomous driving system. The original version could help center the vehicle in its lane, among other things, but required drivers to keep hands on the wheel at all times. The new system, Nissan explained, allows “attentive drivers to take their hands off the steering wheel under certain conditions.”

    Specific details have yet to be released but it appears to follow the format of GM’s Super Cruise and Ford’s new version of CoPilot 360, operating on limited-access roads mapped in high-resolution. A monitoring system makes sure a driver remains alert and ready to take control in an emergency.

    In terms of batteries, Nissan has continued tinkering with the chemistry of its lithium-ion cells and has both cut their cost and increased their energy density, storing more power in less space. The base 2021 Ariya stores 63 kilowatt-hours. That’s within a kWh of the current, longest-range version of the gen-2 Nissan Leaf Plus. The Ariya offers an extended-range 87 kWh battery expected to get around 300 miles per charge, according to the EPA.

    Ariya’s 2nd row folds to create a flat load floor.

    As for charging, Nissan officials weren’t ready to offer details beyond noting Ariya can handle up to 137 kilowatts of power, a big jump up from the roughly 50 kW limit for Leaf. That would suggest an 80% recharge for the smaller pack in perhaps a bit over an hour at a CCS charger.

    And that signals another big shift by the automaker which had been the only key player in the U.S. market committed to the older, slower CHAdeMO system. Nissan’s policy “is to have happy customers,” said Espinosa,” and with more – and faster — CCS chargers now available, the switch was overdue, according to EV analysts.

    As for pricing, the base version of the 2021 Nissan Ariya will start at $40,000, said Espinosa. It is set to go on sale in Japan in the coming weeks, with U.S. dealers beginning deliveries “later in 2021.”

    For the first half of the past decade, Nissan dominated EV sales charts. It has lost its lead to Tesla and is facing plenty of other competition going forward. Whether it can come close to being a significant player with Ariya is far from certain. But Nissan officials are betting that the new BEV has enough going for it to make Ariya a serious contender.

    (Ford’s Bronco is back…and it’s now part of a new family of SUVs.)