CAR-SHARING COMPANIES OFFER A LESS GERM-INFESTED ROUTE
Car-sharing platforms, which have suffered during the COVID-19
lockdown, see an opportunity emerging: an increase in
short-distance, local trips as U.S. consumers look for a different
way of getting to work and running errands. Executives from Turo,
Getaround and Zipcar are hoping their pitch to customers – a means
of travel that is cheaper than car ownership and sanitary – will
also win business from public transit users and Uber and Lyft
riders. In addition to the uptick in shorter trips, the companies
also report increased use by essential workers and health care
staff. “Customer confidence in travel safety can change their
booking habits,” said Preeti Wadhwani, a research analyst with
Global Market Insights. “Health-care providers or first
responders are relying on car-sharing companies such as Turo to
commute to work.”
Getaround says overall trip volume in the U.S. has declined by
almost 50 percent since states began shutting down their economies
in mid-March. Turo says its business also has fallen dramatically,
undoing the 60 percent year-on-year growth they saw as recently as
February, according to CEO Andre Haddad. Zipcar also reports an
“expected decline in demand,” particularly in business
travel and on university campuses, Zipcar President Tracey Zhen
said in an email.
The declines are in line with changes in traffic and
transportation patterns over the past three months, given the
lockdowns and work-from-home directives. The most widely used
transit systems in the U.S. are carrying 40 percent fewer riders
than usual, according to the American Public Transportation
Association. Uber and Lyft reported dramatic declines in riders in
March and April.
Hyperdrive spoke to executives at Turo, Getaround and Zipcar, as
well as industry analysts, to assess the prospects for different
car-sharing models in a COVID-19 world. Sanitation has been a focus
for all three businesses, which have updated their protocols and
issued new guidelines for users. The pandemic has already claimed
Maven, the car-sharing operation owned by General Motors.
AUTOMAKERS URGED TO STOP BUILDING ‘UNICORNS’
As automakers reopen plants that were idled because of the
coronavirus crisis, they should address a longstanding industry
issue: way too many variations built off the same vehicle. So says
Doug Betts, president of J.D. Power’s automotive division and a
former Fiat Chrysler executive in charge of manufacturing quality
control. He puts it this way: Most vehicles can be built in
thousands of different configurations based on, among other things,
a combination of engine, transmission, powertrain and optional
SUBPRIME BORROWERS GETTING FEWER NEW-CAR LOANS
Customers with subprime credit face a double whammy, suffering
more than others from pandemic-related job losses and failing to
qualify for the best new-car incentives, J.D. Power says. “The
decline in share of subprime is not because they can’t get
access to credit,” says Thomas King, president of the J.D.
Power Data & Analytics Div. and chief product officer, in a
webinar this week. However, customers with subprime credit
accounted for just 8% of new-vehicle loans in the week ended May
10, down from 12% in the first three weeks of March, before
COVID-19 social distancing and business shutdowns took effect, J.D.
UAW DEMANDS FORD CLOSE DEARBORN PLANT, TEST ALL WORKERS FOR
The local union that represents workers at Ford Motor Co.’s
Dearborn Truck Plant is asking the automaker to shut down the
assembly line until all plant workers are tested for the
coronavirus. The union also is asking for additional break time at
the plant that builds the best-selling F-150 pickup. Finally, it
wants Ford to do a 24-hour shutdown each time after a worker tests
positive for coronavirus for a thorough plant cleaning.
Source: Detroit Free Press
MCLAREN GROUP TO MAKE 1,200 STAFF REDUNDANT AS IT
The McLaren Group are set to make around 1,200 employees
redundant across their technology, automotive and racing businesses
as part of a restructure in response to the impact of coronavirus
pandemic and the implementation of a budget cap in Formula 1 from
Half the F1 grid have placed at least some of their staff on
furlough because of the pandemic, with the teams also closing their
factories in a mandatory shutdown, as part of a strategy to reduce
costs until the 2020 F1 season can begin.
There have been discussions about reducing the new budget cap
from $175m in light of the impact of the pandemic, with a figure of
$145m expected to be rubber-stamped. This will mean some F1 teams
will need to restructure their respective businesses to comply.
On Tuesday, McLaren said in a statement: “Due to the
ongoing impact of the Covid-19 pandemic, as well as the new Formula
1 cost cap to be introduced for the 2021 season, luxury automotive,
motorsport and technology company McLaren Group has commenced a
proposed restructure programme as part of a wider business plan to
ensure its long-term future success.
“Subject to employee consultation, the proposed restructure
is expected to result in around 1,200 redundancies across the
Group’s Applied, Automotive, and Racing businesses, as well as
support and back office functions.”
Regarding the figure of around 1,200, it is understood
approximately 70 of those will be from the Formula 1 side of the
business, but discussions are ongoing and details are yet to be
NISSAN, RENAULT TO DIVIDE UP WORLD MARKETS IN COST-CUTTING
The Renault-Nissan alliance said Wednesday that they will divide
up their global car business, aiming to cut duplicate spending in
order to save billions of dollars a year. Instead of each company
designing every vehicle they sell, Nissan Motor Co. will design the
midsize cars and sport-utility vehicles, and Renault SA will do the
same for small cars and compact SUVs. The hope is that by 2025,
nearly half the vehicles will be built this way. As a result, the
companies think they can shave up to 40% off the
multibillion-dollar cost of designing the next generations of their
Source: The Wall Street Journal
ANOTHER RENTAL CAR COMPANY FILES FOR CHAPTER 11
Another rental car company has filed for Chapter 11 bankruptcy
as the coronavirus pandemic wreaks havoc on the travel sector.
Advantage Rent A Car filed for court protection from its creditors
late Tuesday, following larger rival Hertz into Chapter 11. The
move comes amid a massive slowdown in leisure and business travel.
Hertz is hoping to stay alive after filing for bankruptcy without a
restructuring plan in place.
Source: USA Today
AMAZON IN TALKS TO BUY AUTONOMOUS VEHICLE STARTUP ZOOX, REPORT
Amazon.com Inc. is in talks to buy driverless vehicle startup
Zoox Inc., according to people familiar with the matter, a deal
that would accelerate the e-commerce giant’s automation
Other companies in the automotive and chip industries have also
held talks with Zoox about a potential investment, the people said.
At least one other business besides Amazon has offered to buy the
company, they added. Zoox is unlikely to sell for less than the $1
billion that it has already raised, according to the people, who
asked not to be identified discussing private negotiations.
“Zoox has been receiving interest in a strategic
transaction from multiple parties and has been working with
Qatalyst Partners to evaluate such interest,” the startup
said. It declined to comment on Amazon’s interest. A
spokeswoman for Amazon declined to comment. Zoox had outsized
ambition and financial backing. The startup wanted to build a fully
driverless car by this year. However, after a 2018 funding round
that valued Zoox at $3.2 billion, the startup’s board voted to
oust CEO Tim Kentley-Klay. The executive criticized the move,
saying the directors were “optimizing for a little money in
hand at the expense of profound progress.” Analysts have
speculated that the company, now run by Aicha Evans, could attract
interest from Amazon or Apple.
The Wall Street Journal reported that Amazon is in advanced
talks to buy Zoox for less than the $3.2 billion valuation from
2018. Amazon is willing to spend heavily to automate its e-commerce
business. The online retail giant purchased warehouse robot-maker
Kiva Systems Inc. in 2012 for $775 million and now has tens of
thousands of robots in warehouses around the world.
Paying drivers to deliver packages is still one of the biggest
costs in the company’s operation, though. CEO Jeff Bezos
announced plans for drone delivery in 2013, though they have yet to
materialize at scale. Last year, Amazon revealed an experimental
delivery robot called Scout in the Seattle area that rolls on
sidewalks like a shopping cart.
Buying Zoox could help Amazon “manage rising shipping costs
that we project will exceed $60 billion by 2025,” Bloomberg
Intelligence analysts Jitendra Waral and April Kim wrote in a
research note on Tuesday.
NISSAN POSTS BIGGEST LOSS IN 20 YEARS, UNVEILS TURNAROUND
Nissan Motor Co. reported a 671 billion yen ($6.2 billion) net
loss for the latest fiscal year and unveiled a plan to turn the
carmaker around by eliminating about 300 billion yen in annual
fixed costs, cutting capacity and reducing the number of vehicle
models. The result, the first loss in a decade and the biggest in
20 years, includes restructuring and impairment charges of 603
billion yen for the year that ended in March, the Yokohama-based
company said Thursday. The four-year plan calls for production to
be cut by 20% to about 5.4 million vehicles a year, and includes
the closing of Nissan’s Barcelona plant in addition to one it
is shuttering in Indonesia.
TESLA DROPS PRICES ON EVERYTHING (EXCEPT MODEL Y)
A 5 grand price cut here, a 2 grand price cut there; Musk wants
your business, now. Tesla, just like every other automaker, is
feeling the pressure during the quarantine and has cut the prices
of almost all its cars overnight. The only one that didn’t get
a break is the new Model Y SUV. The Model 3 gets a $2,000 cut,
bringing the price from $39,990 to $37,990 for the Standard Range
Plus trim. The cheapest model Tesla sells has a 250-mile range and
gets to 60 in 5.3 seconds. The Long Range Model 3 is $46,990, and
the Performance version is $54,990.
The Tesla Model S Long Range Plus, Tesla’s oldest vehicle,
got an ever bigger cut of $5,000. It now starts at $74,990 as
opposed to $79,990. The Performance version of that car now stands
at $94,990. The bigger sedan has a 351-mile range and gets to 60
mph in a sports-car-like 3.7 seconds.
Finally, the Model X SUV, like the S, took a $5,000 price
reduction, bringing the base to $79,990 while the Performance
version is now at $99,990. That EV can fit seven people and has a
top speed of 155 mph. However, you won’t get the full 351 miles
of range that way. Nor if you continuously get to 60 mph in 4.4
So those prices are down, and if you add in federal and state
tax breaks, they go down even further. We seem to be close to the
point where the two graph lines (ICE cars vs. EVs) will cross each
other. But for now, let’s take a look at the competition.
The Porsche Taycan, which seems like a natural competitor to the
Model S, starts at $103,800. That’s more expensive than the
most expensive Model S, and the performance numbers are similar,
but Porsche loses on the EPA-rated range of 201 miles. However, Car
and Driver tested both cars, the least efficient versions, and
found that the Porsche only lost to the Tesla by 13 miles of range.
That figure was extrapolated from the hard data it generated.
As for the Model X, the Audi e-tron and Mercedes-Benz EQC seem
to be the logical competition. The e-tron starts at $74,800 and has
a range of 204 miles while the EQC starts at $67,900 and has a
range of 200 miles. Those are both way down from the Model X’s
351-mile range. They’re both cheaper; however, they both only
fit five passengers.
The Model 3 is tough to compare. The best two choices are the
Chevy Bolt and the Nissan Leaf. The Bolt starts at $36,620 and has
a hefty 259 miles of range. That beats the Model 3 in both range
and price, just not style. The Bolt isn’t a bad-looking car,
but the Model 3 is certainly cooler. Same with the Leaf: It’s
cheaper, but super-dorky (sorry, Mark Vaughn). The top model gets
226 miles of range while the base ($31,600) gets 150 miles on
electric power alone.
Tesla had a huge head start on most of its competitors, and it
has sold more EVs than anyone by a long shot. But as we move
forward, look for that sales lead to shrink, as well as its
technology lead. This year will probably be a weird anomaly, but as
people get back to work-and try to stay away from other people-car
sales, not to mention traffic, should be up to normal levels, or
maybe even higher in 2021.
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A sophomore at Penn State in the College of Communications studying Public Relations. A social media/digital marketing coordinator as well as an On-Air personality at Barstool Sports.Has experience coordinating events such as Barstool Sports College Gameday Show at Penn State University. Also has experience tracking insights, contributing to social media growth on several platforms, and co-leading a content division focused on a female demographic.