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  • Lucid Motors SPAC Company Churchill Sees Big Valuation Drop

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    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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  • Chrysler is No More as Stellantis Comes to Life

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    Is this the last logo that will use the Chrysler name?

    Chrysler is dead.

    Perhaps a bit dramatic, but nevertheless, the merger between Fiat Chrysler Automobiles N.V. and Peugeot S.A. became effective today, resulting in Stellantis N.V. Shares of the newly formed Stellantis begin trading on exchanges in France, Italy and the U.S. starting Monday. All will use the ticker symbol STLA.

    The deal has been going through extensive regulatory approvals, twin shareholder votes and the necessary dottings of i’s and crossings of t’s for more than a year.

    As of today, that means that for the first time since June 6, 1925, when it was founded by Walter P. Chrysler, the Chrysler name will no longer exist as a corporate entity.

    (FCA CEO Manley gets new assignment following Stellantis merger.)

    Stellantis is alive! The company’s stock begins trading on three exchanges Monday.

    In many ways, the Chrysler name was a survivor. The company’s been through a variety of mergers, potential mergers and bankruptcies. It escaped the “merger of equals,” DaimlerChrysler from the late 1990s.

    It was essentially spared its life when the late Sergio Marchionne swooped in and offered to keep it going if the U.S. government would help it through bankruptcy in 2009. The final deal got done with Chrysler Group LLC becoming part of FCA US LLC to follow

    the naming convention of Fiat Chrysler Automobiles N.V. on Dec. 16, 2014.

    Chrysler Corp. fought its way through several near misses when it came to mergers as potential deals with Japanese automaker Mitsubishi, China’s GAC and most recently an effort to merge with Peugeot’s French rival, Renault S.A., a deal that was reportedly scuttled after demands by the French government, which holds an ownership stake in Renault, were too much for then FCA CEO Mike Manley to accept.

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

    Then there was the effort by the aforementioned Marchionne to find a partner for FCA, seemingly almost any partner would do. He approached General Motors and was promptly rebuffed. He reportedly got the same treatment from Volkswagen. There was even a rumored dalliance with EV behemoth Tesla, which would have bolstered FCA’s basically non-existent electric vehicle program.

    The arrival of Stellantis means for the first time in 95 years the Chrysler name won’t be on a corporate marquee.

    It also survived a previous bankruptcy in the late 1970s, paying off the loans early with its charismatic CEO Lee Iacocca, who came over from Ford, helping to lead the company’s charge back to prosperity. Chrysler did enjoy one major merger success when it acquired American Motors in 1987, including – and especially – the Jeep brand.

    In fact, no one seems certain what the future holds for the Chrysler name period. Early in the process, officials said that all brands would be retained, but time and economics often change the equation and currently, the Chrysler brand offers just two products: the Chrysler Pacifica minivan and 300 sedan. Neither are in segments that are seeing sales gains.

    To be fair, there’s been some speculation about the survival of the Fiat name in the same vein. Fiat’s been around even longer, founded in Turin, Italy in 1899. In the U.S., it’s only offering the 500X in 2021.

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

    The Chrysler name isn’t the only vestige of FCA seemingly taking a step back as its CEO Mike Manley is no longer in charge, that duty going to PSA’s Carlos Tavares nor will he be on the board of directors as John Elkann, FCA’s chairman, will take that spot as the chairman of the new Stellantis. Manley, 56, is now Head of the Americas.


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  • FCA CEO Manley Gets New Assignment Following Stellantis Merger

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    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.


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  • Tesla Chooses Texas for Next Gigafactory

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    In case you were wondering if Texas or Oklahoma was the site for the new Gigafactory, that’s Gov. Greg Abbott of Texas on the left.

    Things are coming up roses for Tesla these days – yellow roses – as the California-based EV maker announced it will build its next Gigafactory on a 2,000-acre plot of land just outside Austin, Texas.

    Tesla CEO Elon Musk revealed the choice – Tulsa, Oklahoma was the other finalist – during the company’s second quarter earnings call. He said the site, which is on the banks of the Colorado River, would be an “ecological paradise” with a hiking and biking trail open to the public, should open sometime next year.

    The plant, dubbed GigaTexas, will build a variety of vehicles, including the new Cybertruck and the Tesla semi. It will also handle Model 3 and Model Y production for the eastern half of North America. He also noted that Tulsa could still be in line for a future factory. After announcement, Musk was quick to point out the company will still grow in California.

    (Tesla reports $104M Q2 profit; fourth consecutive quarter of profits.)

    “We expect California to do Model X and S for worldwide consumption, and 3 and Y for the western half of North America. We also think the Tesla Roadster … would make sense in California. I think this is a nice split between Texas and California.”

    Tesla’s Cybertruck is one of four products that the company will build at GigaTexas once it’s complete.

    In addition to what is going to get built where in the U.S., Musk addressed potential future products and how they fit into the company’s plans.

    “It would be reasonable to assume we’d make a compact vehicle of some kind, and probably a high capacity vehicle of some kind,” he said. “These are likely things at some point. I do think there’s a long way to go with 3 and Y, Cybertruck and semi. There’s a long way to go with those. I think we’ll do the obvious things.”

    While future product is critical to the company’s long-term growth, Musk says he’s got his eyes on a short-term prize: full-self driving. The CEO has long predicted that (insert year here) will be when FSD will be available in vehicles.

    However, after years of missed deadlines, the company may be on track to meet his latest goal of having it available sometime this year. He called it the “most important thing” on his very full agenda, adding “everything else is pretty small by comparison.”

    (Texas offers Tesla $80M in incentives for new gigafactory.)

    Musk has been selling the FSD to buyers for several years now but increasing the price for the dormant technology during the past few years, starting at $5,000 to add it and now it sits at $8,000 and it’s going to get pricier as it gets closer to launch. However, there’s a good reason to charge so much money for the technology, Musk believes, as you’ll get what you pay for — and then some.

    Tesla is getting ready to produce its first heavy-duty model, the all-electric Semi. It, too, will be built at the new plant in Texas.

    “I think the upgrading of the fleet to full-self driving, essentially with an over-the-air software update, I mean may go down as the biggest asset value increase in history as a step change,” he said. “Overnight … you’d have like, I don’t know, a few million cars suddenly becoming five times more valuable.”

    Those vehicles also become an even bigger revenue stream for Musk and Tesla as then he can begin to sell access for services, like shopping, games, movies, etc. that could be used by drivers as they allow their vehicle to drive them to their destination.

    In fact, Musk is using an advanced test version of the technology now and says he can drive from his home to the office without intervention. While he wouldn’t commit to it being ready this year, he suggested he thought it would be, then it would be a matter of governmental approvals.

    (CEO Musk sees big growth coming soon for Tesla.)


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