Volvo is on the right track at the wrong time

Photo: Volvo

Volvo has reason to be happy now, but the future is uncertain. Rivian is planning to build another factory as the first truck is still being delivered and the upward trend in Tesla prices is unstoppable. All that and more in this TGIF edition of The morning shift for July 23, 2021.

1st gear: Good news, bad news at Volvo

Volvo is absolutely pulling it in right now, reporting the best half year sales and operating profits in its 94 years as a company. The cause? Momentum behind crossovers and electric cars, which bring with them larger margins and thus bring in more money for the company than your aunt’s old 240.

Unfortunately, Volvo also knows that the second half of 2021 won’t be as impressive, no matter how rosy the results look now. Of Automotive news:

“The baseline scenario we have is that the chip shortage will not improve, which means that our sales and revenue growth in the second half of the year will remain unchanged compared to the second half of 2020,” Volvo CFO Bjorn Annwall told Automotive News Europe.

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This predicament shows another consequence of increasing sales during a shortage: you have nothing to sell when all your inventory is used up.

“The global shortage had a positive impact on sales and profitability,” said the automaker in its half-yearly financial report.

However, Volvo CEO Hakan Samuelsson said the automaker will struggle to continue this strategy as it won’t have that many reserve stocks to sell.

“In the first half we sold more than we produced because we were able to reduce our inventory, but that is only possible once,” Samuelsson told ANE.

It was interesting to see how the semiconductor shortage hit different automakers at different times – sometimes multiple times – and how they all handled the problem differently. Unless you’re Alfa Romeo or Fiat, in this case your tickets are unfortunately full.

2nd gear: Ready for another Amazon bidding war?

Instead of humiliating themselves this time to win the closest corporate headquarters, they will humiliate themselves to Rivian’s next work. Amazon’s own electric truck and commercial vehicle manufacturer has not yet delivered a single customer vehicle, but the location of its second plant is already being considered, a spokeswoman for the company confirmed Reuters on Thursday:

“Although it’s early in a developing process, Rivian is exploring locations for a second US manufacturing facility,” said Rivian spokeswoman Amy Mast on Thursday. She did not want to give any further details.

Several US states have applied for the facility – referred to in documents as “Project Tera” – which will be announced in a few months and will break the ground early next year, said sources, who refused to be identified. The timing could change in view of the coronavirus pandemic, which has already delayed the planned announcement from the summer, the sources said.

This facility will also house the battery production, reports Reuters:

A second facility in the United States will expand the company’s capacity and include phased battery cell production at 50 gigawatt hours (GWh) and a product and technology center, according to documents viewed by Reuters and submitted to state business development agencies. Although Rivian was not mentioned in the documents, sources told Reuters that Tera and Rivian were one and the same thing.

The proposal saw the spring of 2021 as the period in which the company’s decision would be communicated to the states, with a “mobilization” in the summer and then with the start of construction in the fall. However, the pandemic has delayed that schedule, the sources said.

If there’s a silver lining, it’s that state and city officials don’t do them all the same stupid joke Asking Alexa where Amazon should build its next warehouse.

Gear 3: Biden’s chip supply team can’t wait to spend that $ 52 billion

The president’s task force to contain semiconductor shortages is awaiting congressional approval for the proposed $ 52 billion. In the meantime, the team has given a lot of thought to where and how much this money should go, said Minister of Commerce Gina Raimondo Bloomberg:

“We are already planning in the team to invest the 52 billion US dollars,” she said on Thursday during a press conference in the White House. “We need to incentivize the manufacture of chips in America, so we’re very focused on getting the parts in place for this to happen.”

I’m not a financial advisor, but if you expect to be making $ 52 billion to spend solving a big problem, it is generally a good idea to find out what you want to do with it before you get it get it. Raimondo didn’t explain exactly how these funds will be invested, but she did share something else noteworthy:

Raimondo told Bloomberg News in an interview that she had heard signs of improvement from automakers who told her the supply crisis was getting “a little better” amid a global semiconductor shortage. Despite the rise in chip allocation in the automotive sector, many continue to see production delays.

The day you see a morning shift with no headlines about production delays, chip bottlenecks, or other manufacturing-related hooks is the day the crisis really lifts. Until then, I won’t buy it.

4th gear: Teslas are getting more and more expensive

It was seven months in 2021, and Tesla has just raised the prices of its vehicles for the seventh time. On that occasion, it’s the Model 3 and Model Y, whose long-range twin-engine variants are reportedly up by $ 1,000 each Electrek. With Model 3 in particular, this means that prospective buyers pay significantly more today than they did a few months ago.

The popular version of the Model 3 now starts at $ 49,990, or $ 3,500 more than earlier this year.

The delay in delivery for new orders is also given as 10 to 16 weeks.

Earlier this year, CEO Elon Musk attributed some of the earlier price increases to supply chain issues, including global chip shortages.

It’s not clear if this is still the case with this new price hike, which is larger than the previous $ 500 incremental hikes.

I don’t doubt Elon Musk’s claim that the offering has a lot to do with it, though I find it ironic that one of the supposed benefits of direct selling – no markups – has fallen out of the window. It turns out that a centralized distribution operation can confuse customers as much as dealers can.

5th gear: VW is paid by its old executives

It’s all part of the Dieselgate-related deal between Volkswagen and its four former bosses, which the company’s shareholders approved on Thursday Reuters:

The first transaction, announced last month, which will see Volkswagen receiving € 288 million ($ 339 million) in compensation, required shareholder approval and 99.9% of investors approved the proposal at the Group’s annual general meeting.

That’s how it is broken down of the four paying types, with ex-CEO Martin Winterkorn bearing the brunt:

Winterkorn and Stadler will pay 11.2 million and 4.1 million euros, respectively, as part of the transaction.

Former Audi board member Stefan Knirsch was content with 1 million euros and ex-Porsche AG board member Wolfgang Hatz with 1.5 million euros, Volkswagen announced.

“But wait,” you might ask now. “That’s only 17.8 million euros! What about the other 270.2 million? ”Well, it turns out that’s coming back thanks to the company’s insurance policy. Yes, I was a little disappointed to find out too.

Back: Chrysler brings a ray of sunshine to Europe

In front Lotus got its hands dirty on what was later called the Talbot Sunbeam, Chrysler launched on that day in 1977, 44 years ago. Chrysler Europe only marketed and sold the little hatchback for a year and a half before giving up, and Peugeot broke in to buy up the company’s assets in the area. Although the Sunbeam’s Chrysler badge was replaced when it was originally resold as the Talbot, its Pentastar grille badge remained on new models for a while afterwards.

Neutral: I think I’m a Mercedes F1 fan now

The Mercedes F1 Twitter account was uploaded on Thursday this short videowhich I’ve seen probably about 15 times at this point:

Everything about it is perfect. The selected fonts; the strange pastiche of the background graphics in the title screen; the way the videos behind each element in Arcade Mode freeze when they are first highlighted when that vertical column passes; and of course the music and sound effects. Seldom am I so impressed with the memory of a branded account, but that’s really something else. Lewis Hamilton is, of course, a Gran Turismo brand ambassador, so it all makes sense. But the accuracy with which this GT3-inspired homage was made absolutely wears me out. As a result, I listened Slipstream on repetition all morning.