Rivian R1T electric truck
Electric vehicle startup Rivian on Friday said it closed a $2.5 billion investment round led by funds and accounts advised by T. Rowe Price Associates as the company moves closer to production of an all-electric pickup and SUV.
Other participants in the round included Soros Fund Management, Coatue, Fidelity Management and Research Company as well as Baron Capital Group. Existing shareholders Amazon and funds managed by BlackRock also participated.
The funding comes as the company continues to renovate a former Mitsubishi plant in Normal, Illinoisto produce its vehicles as well as a line of EV vans, which Amazon pre-ordered 100,000 of last year for its delivery fleet.
In June, CNBC obtained correspondence regarding a funding round for Rivian, saying the company was raising at least $2 billion with a pre-money valuation at or above $8 billion. At the time, Rivian denied they were raising money.
“We often receive unsolicited investment offers from institutions and individual investors,” Amy Mast, public relations director at Rivian, said in a June 9 email. “We have heard this rumor ourselves – it is categorically false. Publishing this would be spreading a rumor that is simply not true.”
Mast declined to comment on her remarks Friday.
More recently, CEO and founder Robert “R.J.” Scaringe told CNBC the company was “open” to additional financing to help support its “aggressive growth plans.”
The would-be Tesla competitor raised $2.85 billion last year from Amazon, Cox Automotive, T. Rowe Price Associates and Ford Motor, among others. Rivian raised $1.3 billion in December, its most recent funding round and biggest capital raise last year.
Despite the coronavirus and ongoing recession, investors have shown high interest in electric automakers. Shares of Nikola Motor, which plans to make electric trucks, surged last month after going public through a reverse merger last month. Its market valuation is in-line with Ford, even though it doesn’t expect to generate revenue until 2021.
Rivian is expected to be among the first, if not the first, to bring an all-electric pickup to market early to mid- next year – potentially years ahead of its competitors, including Nikola, Tesla and General Motors.
Rivian is taking pre-orders for its all-electric pickup and SUV that include $1,000 refundable deposits.
Rivian, like Tesla, plans to sell its vehicles directly to consumers, bypassing franchised dealers that are used by “traditional” automakers such as GM and Ford.
Tim Kuniskis, head of Fiat Chrysler’s passenger cars division in North America, reveals the 2021 Dodge Durango SRT Hellcat SUV during an online event on July 2, 2020.
Automakers are scrambling to decide how and when to launch highly anticipated new cars and trucks now that the coronavirus pandemic has forced organizers of some of world’s biggest annual auto shows to cancel into 2021 and beyond.
Automakers spend millions of dollars a year on debuting new vehicles – from elaborate launches and displays at auto shows to private previews for wing journalists, dealers, owners and social media influencers. The goal is to produce hype and demand for a vehicle before it arrives in showrooms.
“Awareness is so key. If somebody doesn’t know about a vehicle in the showroom then they don’t know to go to the showroom for that vehicle,” said Rick Deneau, head of communications for Fiat Chrysler’s brands, sales, marketing, engineering and quality in North America. “It’s pretty simple how that goes.”
The event cancellations have created a backlog of auto debuts , including a new product lineup from Dodge’s SRT performance unit that was unveiled Thursday afternoon.
Costs of such cancellations can add up but, more importantly, they can shorten the amount of time automakers have to garner attention for their products.
“The schedule is thrown off,” said Stephanie Brinley, principal automotive analyst at IHS Markit. “We didn’t have a New York auto show, we didn’t have a Detroit auto show. And we have cars that are still going on sale and automakers need to communicate that these are coming … they need to get people excited about them and the traditional delivery for that content is gone.”
GM declined to saywhen it will unveil the Hummer, however, given the vehicle isn’t set to go into production until next fall, the company has some time to figure it out. Others automakers such as Ford don’t have that luxury as vehicles such as the Bronco SUVs and Ford F-150 – its most important product – are due in showrooms later this year and into early-next.
Ford, which has a slate of debuts this year, has been forced to embrace alternative ways to unveil vehicles more than other automakers.
The automaker launched the 2021 Ford F-150 last week during a pre-taped event hosted by actor Denis Leary, a former pitchman for the truck. It’s also set to reveal its new “Ford Bronco 4×4 family” later this month.
“The challenge that marketers face right now is that all of these reveals could look and feel the same,” Matt VanDyke, director of Ford U.S. marketing, told CNBC. “I think that as an industry we’re going to have to really think about how we don’t let them all kind of become the same. We were really cognizant of that with Bronco. We really wanted to do something special.”
Ford debuted the 2021 Ford F-150 during a pre-taped event June 26 hosted by actor Denis Leary (right), a former pitchman for the truck.
Ford will unveil its new Bronco lineup July 13 across Disney’s media networks, including ABC, ESPN, National Geographic and Hulu. Ford worked with Disney CreativeWorks, the company’s creative agency, to create custom three-minute videos for each network to debut the vehicles.
“We’re really optimistic this will be a unique way to do it,” VanDyke said.
Ford has changed the date of the Bronco unveiling at least three times. Two in-person reveals earlier this spring, including one for the Detroit auto show, were canceled due to Covid-19. An online July 8 debut also was postponed due to controversy about the event coincidentally coinciding with O.J. Simpson’s birthday.
Officials that plan reveals for automakers say there are cost and logistical benefits to doing them online. But it also takes away from allowing people to physically touch and look inside the vehicles like they would at an auto show or private event.
Many automakers in recent years have been holding livestream events with a live audience to expand their reach.
“We’ve been working in the past on more encompassing reveals,” said Joe Jacuzzi, GM executive director of brand and product communications. “We’ve been kind of going in this direction for some time.
“Not that that’s necessarily to replace a physical reveal, but certainly the opportunity presents itself for a much wider audience where we’re able to reach out to our customers and dealers alike.”
The Bentley Bentayga luxury SUV, Nissan Rogue crossover, Kia K5 sedan and Audi e-tron Sportback concept crossover will all be revealed online. Other scheduled vehicle debuts include a new electric crossover called Ariya from Nissan Motor and GM’s luxury Cadillac brand unveiling an all-electric crossover called Lyriq.
Prior to the coronavirus pandemic, automakers were already reconsidering how they unveil vehicles. Many had moved away from debuting a vehicle at an auto show. They instead would hold a private event and livestream it online for the public to view. Some expect that to continue when a “new normal is established.”
“For some of these products that are shifting to online reveals, it may prove that’s just as effective. But for some products that need to make a bigger splash and that are more important in terms of volume and profitability and the changes are bigger, they may find that they still wish they had a bigger venue to be held in to reveal these,” IHS Markit’s Brinley said.
The only large-scale domestic auto show remaining for this year is in Los Angeles in November. Johnathan Lowe, chief marketing officer of the show, told CNBC that organizers are in “full planning mode, including the development of proper protocols and procedures for the show.”
People looking at a Tesla car on display at a showroom in Beijing.
Noel Celis | AFP via Getty Images
Tesla told employees it ended a season of reduced pay for its salaried workers on June 29, 2020, as expected, according to internal correspondence obtained by CNBC.
In mid-April, the electric vehicle company cut pay for salaried employees by 10% to 30% depending on their position. At the time, Tesla cited Covid-19 pressures on the business as a justification for the pay cuts, and said they expected them to last until some time around the second quarter of 2020.
In a new HR email, which was sent to Tesla’s global employees by Human Resources on Wednesday July 1, Tesla reiterated details about a forthcoming performance review process.
Throughout the past decade, Tesla has switched schedules for its performance reviews, causing some employees to miss out on months of higher pay, or chances to receive bonuses or more senior titles before layoffs eliminated their roles entirely.
On Thursday, Tesla shares soared after the automaker reported that it delivered 90,650 vehicles in the second quarter handily beating Wall Street expectations. CEO Elon Musk sent a “congratulations” email and thanked employees for their work during the stressful quarter the day before the delivery report, a vague nod to the fact employees had worked through a Covid-19 pandemic.
The outbreak temporarily shuttered some of Tesla’s operations during the quarter, including its car plant in Fremont, California, and battery factory outside of Reno, Nevada.
Musk also thanked Tesla shareholders in a tweet for supporting his business, which has been publicly traded on Nasdaq for 10 years, but has not yet achieved a full year of profitability. Shares closed up 8% on Thursday, a day after Tesla’s market cap surpassed that of Toyota, making it the most valuable car company in the world.
Cutting pay for employees, and delaying merit increases, promotions and bonuses lowered some of Tesla’s costs this quarter, and may have helped the company get close to the goal of positive net income in the second quarter of 2020. It has shown profits for the last three quarters, and a profit in Q2 would potentially let the company qualify for inclusion in the S&P 500.
Earnings reports from Tesla usually follow their vehicle delivery reports by about a month. Steep cuts to headcount have followed performance reviews at Tesla in the past.
Here’s what the Human Resources department said in the email to US Tesla employees this week, as transcribed by CNBC:
To: Tesla Talent
From: Tesla Talent Team
Subj. Performance Acceleration 2020 Program Launch
Date: July 1, 2020
As a followup to Valerie’s email from June 17, today we are kicking off Tesla’s new performance review program, Performance Acceleration 2020. Performance Acceleration 2020 is how we as an organization will evaluate performance, offer feedback, set clear goals and expectations, celebrate strengths and provide support / coaching where needed. It is also the primary way we will determine promotions, merit increases, equity awards and other recognition, as well as assess our organization and what is needed to continue to succeed.
The new Performance Acceleration 2020 launches today for all employees and will be a semi-annual process moving forward. Below are some key dates in the program:
Beginning June 29th: Salary Reductions End
July 1st: Performance Acceleration
July 27th: Managers Begin Delivering Performance Reviews
August 7th: Reviews Available to All Employees in Inside Tesla [an internal website]
Performance Acceleration will be hosted on [URL removed]. To help you get better acquainted with the program, you will receive access to a resource center and a short training course later this month. These will include information regarding the new performance ratings for the program and some of the frequently asked questions about the program.
There’s no current action you need to take, however, please keep an eye out for additional communication about upcoming resources and training for Performance Acceleration 2020. Your manager will be reaching out to you at the end of the month to discuss your review.
For more information on the Performance Acceleration 2020 Process, please reach out to your HR Partner or email [HR email address removed].
Tesla Talent Team
A Ford Motor employee inspects the all-new 2020 Ford Explorer before it rolls of the line to ensure quality for our customers.
Ford Motor reported Thursday that its U.S. vehicle sales in the second quarter were down 33.3%, in-line with industry expectations as the coronavirus caused consumers to stay at home, and dealerships and factories to shutter.
U.S. vehicle sales were forecast to fall by about 34% in the second quarter, according to auto research firms Edmunds and TrueCar’s ALG. The second quarter is expected to be the worst of the year for the automakers due to the pandemic.
Every vehicle in Ford’s lineup aside from the Ford Explorer SUV and Ford Ranger midsize pickup were down in the second quarter. Those vehicles were up 12.4% and 19.8%, respectively, highlighting sales of such utility vehicles remained relatively health for sales to consumers.
Ford reported retail sales to consumers in the second quarter declined 14.3% compared with a year earlier, including a 0.4% decline in truck sales and 22% drop in SUVs. Retail car sales plummeted 34.7%.
Despite the declines, Ford said its retail share grew an estimated full percentage point to 13.3% – the automaker’s best retail share quarter in five years.
“Our performance was driven largely by full-size pickups,” Mark LaNeve, Ford vice president of U.S. marketing, sales and service, told CNBC.
Largely due to declines in its fleet unit, which includes sales to government and businesses, sales of its F-Series pickups were down 22.7% in the second quarter.
Ford, according to LaNeve, is optimistic about demand recovering for its commercial business as well as retail sales for the remainder of the year.
“We believe we’re in good shape for the third-quarter summer selling season and hopefully we can continue some of those strong share gains. “All-in-all in an unprecedented, very challenge quarter we overperformed.”
There remains concerns for the rest of the year regarding a potential resurgence of Covid-19 impacting the auto industry, LaNeve said.
Automakers across the U.S. had to end vehicle production from March until mid-May due to the pandemic. They’ve also cut or deferred executive and white-collar salaries and withdrawn guidance for the year.
Tesla shares soared in pre-market trading Thursday after the automaker said it delivered 90,650 vehicles in the second quarter, handily beating Wall Street expectations.
Analysts expected the electric car maker to delivery about 72,000 vehicles during the last three months, according to a consensus of analysts surveyed by FactSet. A broader set of analyst estimates, compiled by Bloomberg, set Wall Street expectations for Tesla higher at 83,000 vehicle deliveries in the second quarter.
Shares of Tesla closed Wednesday up 3.7% to $1,119.63. The company’s stock jumped by about 10% in pre-market trading.
The deliveries come a day after Tesla CEO Elon Musk sent out an e-mail congratulating his tens of thousands of employees on their “amazing” execution “in such difficult times.”
In the first quarter of 2020, Tesla said it made more vehicles than it sold– with 102,672 units produced, and 88,400 delivered. During the second quarter of 2019, Tesla said it made 87,048 vehicles including 72,531 Model 3s, and delivered 95,200, including 77,550 Model 3s.
Deliveries are the closest approximation of sales numbers reported by Tesla.
Auto sales the world over, and especially in the U.S., slumped during the quarter after Covid-19 outbreaks led to health restrictions on households, travel and businesses, mass layoffs and wage cuts.
During Q2, Tesla had to close its main U.S. car plant in Fremont, California for several weeks due to health orders. It slashed pay for salaried workers, and delayed giving raises, promotions and bonuses to employees until after a performance review that should be completed by the end of July.
Musk famously clashed with local health authorities over Covid-19 restrictions on the Fremont plant. He also downplayed the severity and prevalence of Covid-19 in the U.S., even though he delayed the company’s Battery Day and shareholder meeting until September, citing safety for crowds in the face of the novel coronavirus.
In the US, Tesla also faced two new federal safety probes, one over a problem with its vehicle displays, and another over a cooling system in its older Model S vehicles which may pose a fire risk.
In order to stoke demand for the company’s electric vehicles, Tesla cut vehicle prices during Q2 in North America and China both.
Its Shanghai car plant came back online quickly after a coronavirus-related shutdown, however. Sales in China began to recover with the company selling 11,095 made-in-Shanghai Model 3s there in May, according to data from the China Passenger Car Association.
On Wednesday, ahead of its deliveries report, Tesla’s valuation edged higher than Toyota’s. The American automaker’s sales are a small fraction of its Japanese predecessor, however. In 2019, Tesla reported deliveries of 367,500 vehicles globally, while Toyota reported sales that were twenty nine times higher at 10.74 million units.
Tesla was expected to meet or beat street expectations for Q2 deliveries, in no small part because Musk has been sending out “Everybody” e-mails to Tesla employees, which signal how the company is doing, and typically leak to press.
He sent one such e-mail on Wednesday around 11 a.m. California time to Tesla employees with the subject line “Congratulations Tesla Team!.” The e-mail said, in its entirety: “Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!”
Ford recently teased this image of the front of its new Ford Bronco on social media ahead of the vehicle’s debut.
Ford Motor is partnering with Disney for unique unveilings of its new lineup of Bronco SUVs as automakers globally seek alternative ways to garner attention for highly-anticipated vehicles during the coronavirus pandemic.
The automaker will unveil its “Ford Bronco 4×4 family” of vehicles July 13 across Disney’s media networks – marking the first-ever, prime-time product reveal across Disney’s broadcast, cable, digital and streaming properties, including ABC, ESPN, National Geographic and Hulu.
“This is enormous for us. This is the return of an icon that people have just been clamoring about for years,” Matt VanDyke, director of Ford U.S. marketing, told CNBC. “For us, this is just of huge importance and carefully crafted.”
Ford worked with Disney CreativeWorks, the company’s in-house creative agency, to create custom three-minute videos for each network to debut the vehicles. The videos will air during the first commercial breaks of each network’s 8 p.m. broadcast, followed by the Hulu streaming service beginning the next day.
Each “film” features a special guest: professional climber Brooke Raboutou for ESPN’s “SportsCenter;” country music singer Kip Moore for the “CMA Best of Fest” on ABC; and Academy Award-winning director Jimmy Chin, a professional climber, will spotlight another Bronco during “National Parks: Yosemite” on the Discovery Channel. Chin, a cinematographer and photographer, also assisted Ford in creating the spots for each of the networks, VanDyke said.
Jimmy Chin, Alex Honnold, and Elizabeth Chai Vasarhelyi, winners of the Documentary (Feature) award for ‘Free Solo,’ attend the 91st Annual Academy Awards Governors Ball at Hollywood and Highland on February 24, 2019 in Hollywood, California.
Kevork Djansezian | Getty Images Entertainment | Getty Images
“We absolutely intend on putting our best foot forward and making sure that the Bronco gets the glory it deserves. We’re so excited about this partnership that’s so unique with Disney to co-create it,” VanDyke said. “We think it will draw a huge amount of additional interest to our own properties and just make this reveal one that we’ll never forget.”
VanDyke declined to discuss financial details of the partnership other than saying it is “a paid integration and a partnership” with “advertising that’s associated with it.”
The videos will refer viewers to Ford.com for more information as well as the ability to place $100 reservations for the Bronco. The site as well as Ford’s social media channels also will have additional content and videos, including a longer unveiling of the Bronco family.
The Bronco reveal marks the first time Disney CreativeWorks is deploying custom branded content across multiple networks during prime time.
“With Ford, we’re reimagining what a product reveal can look like by drawing upon our best-in-class sports, entertainment and streaming brands to bring the new Bronco family to life in a way that honors its heritage and gives viewers an unforgettable experience,” Rita Ferro, president, Disney Advertising Sales, said in a statement.
Discussions about such a partnership started six to eight weeks ago, VanDyke said. Disney and Ford had initially decided to broadcast the unveiling on July 8, however the date was changed due to controversy about the event coinciding with O.J. Simpson’s birthday.
“That was completely a coincidence. It was completely unintended,” VanDyke said. “We did not want to be insensitive to people who felt that was inappropriate and neither did Disney.”
Simpson, a former football star, was infamously involved in a nationally televised slow-speed police chase with a 1993 Ford Bronco following the death of his wife, Nicole Brown Simpson, and her friend Ronald Goldman in 1994.
Disney, according to VanDyke, was “flexible” with Ford changing the reveal date. It was at least the third time Ford had rescheduled the Bronco unveiling. Two previous events earlier this spring, including the Detroit auto show and a private debut, were canceled due to the coronavirus pandemic.
“Without auto shows and the world that we’re living in right now, the traditional vehicle reveal is no longer the case,” VanDyke said. “As we thought about Bronco, we wanted it to have its own unique approach to it.”
Ford released a video of a prototype of the new Bronco SUV off-road testing in January.
The debut of the Bronco has been anticipated for years. Ford initially confirmed its return in January 2017. Ford is expected to offer a “Bronco family” of vehicles, including two- and four-door versions and reports of a smaller SUV called the Bronco Sport.
Ford executives have promised the Bronco will live up to its reputation as a classic off-road SUV. Ford last produced the vehicle, a two-door, in 1996.
This isn’t the first time Ford has teamed up with Disney for a new vehicle. The companies partnered for an attraction that debuted at the 1964 World’s Fair called the “Ford Magic Skyway.” It featured Ford vehicles, including the first-generation Ford Mustang, which debuted at the fair, taking passengers through different time periods.
Vehicles pass the Tesla Inc. assembly plant in Fremont, California, U.S., on Monday, May 11, 2020.
David Paul Morris | Bloomberg | Getty Images
Around 11:00 a.m. California time on Wednesday, Tesla CEO Elon Musk sent out an e-mail congratulating his tens of thousands of employees.
“Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!” read the email in its entirety.
Tesla is expected to report its second quarter vehicle delivery and production numbers after the bell on Thursday, and Musk’s Wednesday email suggests that Tesla hit its goals. It follows Musk’s exhortation earlier in the week to “go all out” as “breaking even is looking super tight.”
According to a consensus of analysts surveyed by FactSet, as of July 1, Wall Street expects Tesla to deliver 72,000 vehicles for the period. (Estimates range from 39,000 to 86,000 units expected.)
Auto sales slumped during the second quarter after Covid-19 outbreaks led to health restrictions on households and businesses, mass layoffs and wage cuts.
Tesla had to close its main U.S. car plant in Fremont, California, for several weeks due to health restrictions. Musk defied and sued regulators in Alameda County over their orders and returned to full operations a few days before getting official clearance to do so.
To revitalize demand, Tesla cut prices of its electric vehicles during Q2 by as much as 6% in North America. It also made pricing changes in China, where its Shanghai plant came back online relatively quickly after a health-related shutdown.
Throughout the last month of the quarter, Musk has sent several “Everybody” e-mails, which have promptly leaked to press, where shareholders could easily get a sense of his messaging.
For example, in early June, Musk sent out a pair of “Everybody” e-mails, obtained by CNBC and others, in which he boasted about a glowing Model Y review in the Wall Street Journal and urged employees to stay motivated amid Model Y production and delivery problems.
He said, in another one of the emails: “It is extremely important for us to ramp up Model Y production and minimize rectification needs.” He added, “We are doing reasonably well with S, X, and 3, but there are production and supply chain ramp challenges with Model Y, as is always the case with new products.”
Cars sit in a dealership lot on the first day that dealerships are allowed to open to the public on May 20, 2020 in Linden, New Jersey.
Spencer Platt | Getty Images
The hefty decline is in-line with what analysts expected for the automaker, which is among the first to report its second-quarter sales. Sales were forecast to fall by about 34% in the second quarter, including declines of 24% to 30% in June alone, according to auto research firms Edmunds and TrueCar’s ALG.
There were no bright spots for Fiat Chrysler in the second quarter as every one of its six brands reported sales declines of between 21% and 63%. For the first half of the year, sales were off 25.8% for the Italian-American automaker.
Jeff Kommor, head of U.S. sales for Fiat Chrysler, said retail sales to consumers have been rebounding since bottoming in April, however fleet sales to governments and businesses have been canceled or delayed.
“This quarter demonstrated the resilience of the U.S. consumer,” Kommor said in a release. “Retail sales have been rebounding since April as the reopening of the economy, steady gas prices, and access to low-interest loans spur people to buy.” He said the company has built “a strong fleet order book” that will assist its sales in the second half of the year.
Most major automakers are expected to report June or second-quarter sales on Wednesday, providing another look at how the coronavirus crippled the auto industry during the first half of the year.
Other automakers reporting June or second-quarter sales include:
- Hyundai Motor’s sales in the second quarter fell about 23.7% to 141,722 units compared to a year ago, including a 21.9% slide in June.
Most of the U.S., European and Asian automakers report their second-quarter auto sales Wednesday. This article will be periodically updated as they release their results.
Chevrolet Tahoe sports utility vehicles (SUV) wait for final inspection before being driven off the production line at the General Motors Co. (GM) assembly plant in Arlington, Texas.
Matthew Busch | Bloomberg | Getty Images
Officials of a local chapter of the United Auto Workers union have asked General Motors to temporarily close its large SUV plant in Arlington, Texas, because of the resurgence of Covid-19 cases in the state.
“Due to the most recent data on the Covid -19 outbreak, the Bargaining Committee has asked General Motors to shut down Arlington Assembly until the curve is flattened for the benefit and well-being of our members,” reads a message on the organization’s website. “Every day we are setting new records in the number of people who are testing positive in the Dallas-Fort Worth area.”
Texas Gov. Greg Abbott last week announced he would roll back some of the state’s reopening plans, closing bars and reducing capacity for indoor dining, among other modifications and closures. The announcement followed a 79% increase in Texas’ weekly average of coronavirus cases, averaging 4,757 daily new cases, according to a CNBC analysis of data compiled by Johns Hopkins University.
GM as well as other automakers have instituted extensive safety measures and procedures in an attempt to reduce the spread of Covid-19 in plants.
GM said in an emailed statement Tuesday that officials are aware of the request but “there have been no changes to our production plans at Arlington because our safety protocols are working, thanks to a strong team effort.”
The plant is a pivotal part of GM’s U.S. operations and profits. The facility’s roughly 5,000 workers, including 4,500 or so hourly members represented by the UAW, build the company’s full-size SUVs, which were redesigned for the 2021 model year. They are highly profitable vehicles that include the Cadillac Escalade, Chevrolet Tahoe and GMC Yukon models.
GM has declined to disclose how many employees have tested positive for Covid-19 since plants reopened.
A representative with the local union was not immediately available to comment.