Inside Automotive:
Why Ford’s F-150 Lightning is the legitimate start of the EV race – Kevin Tynan | Bloomberg Intelligence
First-quarter numbers are rolling in for many auto retail professionals and inventory still remains on everyone’s watchlist. Today on Inside Automotive, we’re pleased to welcome back Kevin Tynan, Bloomberg Intelligence’s Senior Automotive Analyst, who stays up to date on all things automotive. He joins the show to share his perspective on Q1 earnings and his outlook on electric vehicles coming to market. Watch the complete segment here.
Headlines:
Carvana said in a regulatory filing this week that the company has laid off 2,500 of its employees, which accounts for 12% of the company’s workforce. The announcement comes after the used auto retailer’s first-quarter results showed a staggering net loss of $506 million despite bringing in nearly $3.5 billion in revenue. Affected employees will reportedly be offered pay for at least four weeks, and Carvana said its executives will not be taking their salaries for the rest of the year to compensate for former employees’ severance pay.
Sonic Automotive said in a press release this week that its EchoPark brand has expanded into another state as part of its goal to have 90% coverage throughout the United States by 2025. The latest retail hub opened in St. Louis, Missouri, and will sell inventory on-site as well as online. Sonic Auto’s CEO David Smith said the company is excited about the new location, which opened shortly after the company reached record high revenues and net income for the first quarter.
Volkswagen looks set to build a fully electric SUV/pickup truck combination reminiscent of the Scout brand that was popular in the U.S. from 1961 to 1980. Sources close to the matter said the automaker will be looking to invest over $100 million in the new brand and that it is hoping to sell 250,000 of the vehicles in the U.S. every year. A Volkswagen designer also posted a sketch of the potential vehicle on Instagram Wednesday morning but promptly removed it.
Electric vehicle startup Canoo said in its first-quarter earnings report that it had lost over $125 million in cash for Q1 and warned it may not be able to continue operations. The company’s regulatory filing this week indicated that Canoo has a growing concern it will not make it past this quarter and is in dire need of capital. Canoo’s unique EV designs have been well-received since its inception in 2019. Still, the company has continuously faced obstacles, including the resignation of its founders, various lawsuits, and regulatory issues.
News & Opinion:
The current state of the used car industry—what goes up must come down
According to Cox Automotive’s Manheim Used Vehicle Value Index, used car prices dropped 1% between March and April 2022. This is now the third straight month of price declines since this year started. Also, wholesale prices have fallen 6.4% since January, but are still 14% higher than at the same time last year. The fall isn’t just related to prices, as sales have fallen 13% between March and April. The culprit could be the significant impact of rising inflation. Consumers have to pay more for goods and items across various industries, meaning they may not have the funds for a still highly-priced used vehicle. A prolonged price squeeze could continue to lessen demand and pricing. Read More
How electric vehicles might affect the fixed-ops department
Will electric cars change the business? Yes. But will it be all negative? I don’t believe so. To believe that it will, you would need to believe that replacing an internal combustion engine with an electric motor will fundamentally change a dealer’s work mix in service. Electric-powered vehicles will still need rubber tires, brakes, wiper blades, and other wear items. While braking systems will change with electric vehicles, there is no indication that friction brakes will disappear. These vehicles will also have power windows and locks, air conditioning, and even more complicated ADA systems than we have today. All of these things will likely need some level of repair at some point. Read More
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