You might see Rivian delivery vans in your neighborhood soon, Porsche’s long-predicted initial public order could get put on the back burner yet again, and Honda is the latest to wind down some factories. All that and more in this Friday edition of The Morning Shift for July 22, 2022.
1st Gear: Amazon Prime, Roll Out
With all the attention behind the Rivian R1S and R1T, it’s easy to forget that they represent just one prong in Rivian’s strategy. The other is commercial vehicles, and to that end, the startup just delivered its first vans to investor Amazon this week. From Automotive News:
Amazon unveiled road-ready EDVs at a last-mile delivery center in Chicago, the companies said. Amazon has been testing preproduction vehicles since last year.
“Starting today, customers across the US will begin to see custom electric delivery vehicles from Rivian delivering their Amazon packages, with the electric vehicles hitting the road in Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle and St . Louis, among other cities,” the companies said.
Amazon ordered 100,000 delivery vehicles from Rivian planned for delivery over the next eight years. It’s unclear how many Rivian vans bearing the company’s livery are out on the road now, although Amazon expects them to be active in “more than 100 cities” by the time 2022 comes to a close. It won’t just be one van, either; Rivian has taken a modular approach, offering different vans for different jobs:
The vans for Amazon’s fleet will come in different sizes, based on cargo capacity.
Rivian has said the EDV 700, with 700 cubic feet of cargo space, is rated at just over 200 miles of range. The automaker is also making a smaller EDV 500, and plans a bigger EDV 900 — both with at least 150 miles of range.
Rivian’s stock was backsliding throughout much of 2022, falling from about $100-per-share to $20 two months ago. Today it sits at $33. CEO RJ Scaringe recently announced that with Rivian having built 4,401 vehicles in the second quarter of 2022, it remains on track to realize its year-end goal of 25,000. “Supply chain and production are ramping up!” the chief executive tweeted earlier this month. Amid all the good news, however, Scaringe predicts job cuts in the long run. Again, from Automotive News:
In a letter to employees last week, Scaringe acknowledged that the automaker is looking at cost cutting “in order to stay ahead of the changing economic landscape.”
“The hardest part of this process has been working through our organization to assess the size and structure of our teams and how well this aligns with our strategic plan,” Scaringe said in the letter, which Rivian shared with Automotive News.
2nd Gear: Will Porsche Ever Go Public?
Volkswagen was talking a big game earlier in the year when it announced the likelihood it would float more than $11 billion worth of Porsche as part of an initial public offering before the end of 2022. Overall, some analysts had valued Porsche at more than $80 billion, although VW might have to settle for a lot less than that due to circumstances beyond its control. From Reuters:
Porsche may have to go public at a steep discount if it insists on going ahead as economic obstacles mount, two people involved in the landmark multi-billion-euro listing said.
The prospect of a larger than customary discount would be a setback to the controlling families pushing the initial public offering to fund a costly makeover from petrol- to electric-driven sports cars.
Original expectations have been high for the luxury car brand owned by Europe’s biggest carmaker, Volkswagen. Some had valued Porsche at more than 80 billion euros ($81.89 billion), according to bankers involved.
But the people involved said a bigger-than-usual markdown may now be necessary to secure what could be one of the world’s largest stock-market debuts – in the face of war, threat of recession and energy shortages.
Porsche may have to settle for as little as 60 billion euros, one of the people said, noting that the owners would not accept anything less.
Volkswagen has been talking about this mythical Porsche IPO forever, and late last year the automaker’s top brass expressed that it was pumping the brakes on the plan. Don’t be surprised to see that headline repeat if it can’t get what it wants Porsche to be worth.
3rd Gear: Today It’s Honda
It seems like every morning, some automaker is announcing production cutbacks at one or more of its facilities. It has hit every automaker at one point or another. Today, the wheel of misfortune has landed on Honda. From Reuters:
Honda Motor Co. said it would slash production by up to 30% in Japan next month against original plans due to persistent supply chain and logistical issues.
Two lines at its Suzuka plant in western Japan will reduce production by about 10% this month and by about 30% in early August versus previous plans, Honda said late on Thursday.
Its assembly plant in Saitama prefecture, north of Tokyo, will also cut back production by about 10% early next month.
I wish we started keeping score of this two years ago when it started, would make for an interesting graphic. Anyway, this has been yours Supply Chain Loser update for July 22, 2022.
4th Gear: Volkswagen Wants Spicy SUVs for the States
Hyundai recently discontinued the Veloster N hot hatchalthough that car’s engine is available in the Kona N and Elantra N. The Kona N is worth emphasizing, because it reflects a growing trend in the industry — repurposing compact and midsize crossovers as entry-level performance cars.
Volkswagen does this in Europe with the Tiguan R, but the Tiguan R is not available here. That figures to change down the line, though, as the brand confirmed to CarBuzz.
When asked whether there was a demand for the Tiguan R to be brought stateside, Schafer said CarBuzz that the VW Group of America “definitely tried to get Tiguan R here when Europe launched the car” but ultimately failed for various reasons. One of these was the difference in body structure, as the US only gets the longer version of the Tiguan.
However, he did have good news regarding the US-spec Tiguan. “I can confirm Tiguan will have a successor,” he told us. “Whether it will be a full-blown R, maybe not – but I can tell you that there will be a derivative in the Tiguan lineup that will have a little bit more oomph and a little more giddyup.”
Schafer was unable to confirm just how much power the performance derivative might have. “Whether that will be like an R that’s 100-150 horsepower more than the standard derivative remains to be seen, but we are working on something with a bit more oomph in the Tiguan.”
The Atlas will likely get a more powerful variant as well, although that one will stop short of full “R” designation. CarBuzz predicts the next Tiguan is about two years out, however, so don’t go rushing to your local Volkswagen dealer in the hopes of scoring such a vehicle anytime soon.
5th Gear: The Focus and the Fiesta
Exactly a month ago, I poured one out for the Ford Focus, which may not have an especially long future in Europe at the rate things are going. This week, Ford confirmed it has temporarily restricted new Fiesta and Focus orders for the time being, although pre-configured cars will still be available. From Automotive News:
Ford Motor Co. is severely restricting the availability of its key Fiesta and Focus models for ordering throughout Europe, closing the order books for both models until further notice.
This means that only preconfigured models can be ordered until further notice, as the automaker responds to excessively long delivery times, according to a report in Automotive News Europe sister publication Automobilwoche.
“Due to the good customer demand, however, also due to the production situation, we currently have delivery times of up to 12 months in some cases for various model series,” a Ford spokesperson told Automobilwoche.
“We closed free order availability for our dealers on the Ford Focus and Ford Fiesta, among others, some time ago,” the spokesperson said. “However, we are offering available production volume to our dealers in the form of pre-specified units based on customer demand.”
He added this is Ford’s way of ensuring that customer orders can be fulfilled, and that available production capacity can be used in the best possible way.
Markus Thal, the head of the works council in at Ford’s factory in Saarlouis, Germany, which builds the Focus, confirmed the unusual measure and said the orders currently being received would already run into 2023. He said it would not currently be possible to deliver a Focus before next spring.
According to employee representatives, Ford now expects annual production of only 117,000 Focus cars for the current year, down from 195,000 units originally planned.
This is how Ford’s best cars — its small cars — go out: Not with a bang, but the inability to order the one you really want.
Reverse: Seven Days In the Sky
On this day 89 years ago, Wiley Post flew solo around the world. I mean, not without breaks; he had to go to the bathroom at some point and definitely not just like the birds do. Right? From History.com:
American aviator Wiley Post returns to Floyd Bennett Field in New York, having flown solo around the world in 7 days, 18 hours, and 49 minutes. He was the first aviator to accomplish the feat.
Post, instantly recognizable by the patch he wore over one eye, began the journey on July 15, flying nonstop to Berlin. After a brief rest, he flew on to the Soviet Union, where he made several stops before returning to North America, with stops in Alaska, Canada, and finally a triumphant landing at his starting point in New York.
Two years earlier, Post won fame when he successfully flew around the northern part of the earth with aviator Harold Gatty. For his solo around-the-world flight in 1933, he flew a slightly greater distance–15,596 miles–in less time. For both flights, he used the Winnie Mae, a Lockheed Vega monoplane that was equipped with a Sperry automatic pilot and a direction radio for Post’s solo journey. In August 1935, he was attempting to fly across the North Pole to the USSR with American humorist Will Rogers when both men were killed in a crash near Point Barrow, Alaska.
Neutral: Whatcha Been Spinnin’?
I haven’t listened to “new music” and by that I mean anything I haven’t heard before — in about half a year. It’s not a great feeling! Earlier this month criminally underrated Canadian rock band Metric released a new album, Formentera, which has helped me fix that. It also kicks off with a 10-minute opening track which, if you know Metric, isn’t typically their bag. Rest assured there are some more straightforward bangers in the tracklist, too. What are you listening to these days?