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Volkswagen's Scout Motors reveals first EVs as it shifts to include plug-in hybrids

suimt — Fri, 25 Oct 2024 00:49:43 +0000

Scout Terra pickup truck and Scout Traveler SUV concepts

Scout

NASHVILLE, Tenn. — Volkswagen-backed Scout Motors revealed its first electric vehicles Thursday and announced plans for the brand to expand its lineup to include an emerging type of plug-in hybrid electric vehicle in addition to EV models.

Scout, a former American vehicle brand from 1961 to 1980, was expected to exclusively offer EVs in a bid for the German automaker to expand its presence in the U.S. However, slower-than-expected adoption of EVs and higher costs have led it to change course and include extended-range electric vehicles, or EREVs.

“Being a startup that moves quickly, we can pivot,” Scout CEO Scott Keogh, a longtime auto executive who previously led VW’s operations in the U.S., told CNBC. “The pivot that we made a number of months ago into offering range extender definitely was a smart play.”

EREVs are basically a type of plug-in hybrid electric vehicle. They include EV motors and battery cells, as well as a traditional internal combustion engine to power the vehicle’s electric components when the battery loses its energy. The engine essentially acts as a generator to power the EV components when needed.

Scout Terra pickup truck concept

Keogh said Scout added EREVs to better protect the brand from any market volatility amid less-than-expected consumer demand for EVs.

“We think electrification is the future. Range extender sets it up as an EV car, so it introduces people to electrification, yet it has a super smart, let’s say, ‘backup plan,'” he said during an interview Thursday. “It will drive like an EV.”

He said Scout has no plans to offer a traditional, non-electric vehicle with only an internal combustion engine.

The company’s first vehicles — a full-size pickup truck and large SUV — will cover about 40% of the highly profitable U.S. sales market.

Keogh said the company targets to be profitable on an operational basis within the first full calendar year after initial production of the vehicles, which will be built at a $2 billion plant that’s under construction in South Carolina.

“If you look at these profit pools, these two areas, from this size pickup truck to this sized SUV … these are the largest profit pools in the world,” Keogh said.

Scout Traveler SUV concept

Scout

Being profitable during that timeframe would be quite a success, as current EV startups such as Rivian Automotive and Lucid Group lose tens of thousands of dollars on each vehicle they produce after several years.

Meanwhile, Keogh said an announced software deal between VW and Rivian will not impact Scout’s operations. He described the $5 billion software deal, which includes the establishment of a joint venture, as an “exciting opportunity” for Scout.

“It’s good for scaling. It’s good for technology. It’s good for everything,” Keogh said.

Scout’s South Carolina plant is planned to have a production capacity of 200,000 vehicles. Scout expects to use batteries — the most expensive part of an electric vehicle — from VW’s joint venture battery cell manufacturer in Canada.

The company opened reservations for the vehicles Thursday night on its website. Scout plans to sell the vehicles directly to consumers instead of through a traditional franchised dealer network like VW does in the U.S.

North American Charging Standard, an 800-volt architecture with up to 350-kilowatt charging capability, and will be capable of bi-directional charging that will allow the vehicle to act as a generator.

Toyota Land Cruiser. It’s larger than Jeep’s well-known Wrangler, which is currently available as a plug-in hybrid electric vehicle.

The truck is a full-size pickup — a segment currently dominated by Ford, General Motors and Stellantis’ Ram brand. But the electric pickup market where Scout will compete remains a developing market.

Automakers such as GM and Ford rushed to release all-electric pickup trucks early in this decade to compete against several EV startups, many of which never materialized, as well as Tesla. Stellantis is expected to release all-electric and EREV full-size pickups by next year.

Scout Traveler SUV concept

But after rushing the vehicles to market, sales slowed. Much like the overall EV industry, the large vehicles went from commanding significant price premiums to being highly incentivized.

Overall, this electric “truck” market, including the SUVs, accounted for nearly 58,000 vehicles sold during the first half of this year, according to estimates from Motor Intelligence. That’s less than 1% of the roughly 7.9 million light-duty new vehicles sold during that time in the U.S., but a 35% quarterly increase from the first to the second quarter, according to the data.

Keogh believes Scout can differentiate itself in the market with its products, lower pricing and brand appeal. Additional Scout products are expected to follow in the years ahead, Keogh said.

“Can we consider some point in the future sizing down? Absolutely,” he said. “You want to throw the dart at the best place first. And I think we’ve done that between these two vehicles.”

Stellantis to shutter and sell large testing facility amid cost-cutting efforts

suimt — Fri, 18 Oct 2024 21:54:14 +0000

Carlos Tavares, chief executive officer of Stellantis NV, speaks to the media at the Stellantis auto manufacturing plant in Sochaux, France, on Thursday, Oct. 3, 2024.

Nathan Laine | Bloomberg | Getty Images

DETROIT — Automaker Stellantis plans to shutter and sell its large vehicle proving grounds in Arizona at the end of this year, CNBC has learned.

The decision is the latest cost-cutting measure by the trans-Atlantic automaker under CEO Carlos Tavares, who has been increasingly under pressure from Wall Street, dealers and the United Auto Workers union amid the company’s lagging financial performance, layoffs and overall business decisions.

The Arizona Proving Grounds covers 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. It has been used for vehicle testing and development for the automaker since then-Chrysler purchased the property for $35 million from Ford Motor in 2007.

The closure was confirmed by three people familiar with the plans who agreed to speak on the condition of anonymity because the matters are private.

Stellantis plans to use a proving grounds in Arizona owned by Toyota Motor beginning next year, according to two people familiar with the decision. Toyota opened its operations, which are costly to maintain, for other companies to use in 2021.

Stellantis Chrysler Arizona Proving Grounds

Source: Google Earth

Stellantis confirmed the closure Friday morning, citing the company’s ongoing cost-cutting and real estate evaluations.

“Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the company said in an emailed statement.

The automaker also said it is “working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations” but that employees could be placed on an “indefinite layoff, which would entitle them to pay and benefits for two years.”

Stellantis said 41 employees currently work at the Arizona Proving Grounds, including 37 hourly workers represented by a local chapter of the UAW.

The UAW, which has been increasingly critical of Tavares and such layoffs, did not respond for comment on the planned closure.

Stellantis, like most automakers, has several proving grounds in different climates and geographies to develop and test vehicles ahead of selling them to consumers. Stellantis’ other major U.S. proving grounds facility is a 4,000-acre campus located west of Detroit in Chelsea, Michigan.

Stellantis’ complex in Arizona was one of 18 facilities the company notified the UAW it could potentially close during the union’s contract negotiations last year with Stellantis.

A majority of the other operations were parts and distribution centers that were expected to be consolidated into “mega sites,” as well as the company’s massive 500-acre campus in metro Detroit formerly used as Chrysler’s world headquarters.

The status of the other properties was not immediately clear, however, local and state politicians, including Michigan Gov. Gretchen Whitmer, have expressed concerns that Stellantis could move to shutter the former headquarters in Auburn Hills, Michigan.

Stellantis has significantly reduced the number of its U.S. employees in recent years amid Tavares’ cost-cutting measures.

Stellantis has reduced employee head count by 15.5%, or roughly 47,500 employees, between December 2019 and the end of 2023, including a 14.5% reduction in North America, according to public filings. That doesn’t include further head count reductions and layoffs this year.

The automaker had only about 11,000 U.S. salaried employees at the end of last year. That compared with 53,000 at General Motors and 28,000 at Ford.

The reductions have occurred as Stellantis has attempted to outsource many engineering efforts to lower-cost countries such as Brazil, India and Mexico, according to several people familiar with the moves.

Bloomberg News earlier this year reported that Stellantis moved to recruiting a majority of its engineering workforce in those countries, where the cost per employee amounts to roughly €50,000 ($53,000) or less per year — far less than similar positions in the U.S. and Europe.

GM reports 2.2% decrease in third-quarter sales, but EVs make gains

suimt — Tue, 01 Oct 2024 16:02:04 +0000

GM’s 2024 Chevrolet Equinox EV during a media launch event for the vehicle in Detroit, May 16, 2024.

Michael Wayland / CNBC

DETROIT — Increases in sales of electric vehicles and small crossovers helped General Motors report slightly better-than-expected sales during the third quarter.

The Detroit automaker reported a 2.2% drop in third-quarter sales compared with a year earlier, slipping to 659,601 vehicles sold. Auto industry forecasters such as Cox Automotive and Edmunds had expected GM’s sales to be down by more than 3% during that time.

GM’s third-quarter sales are expected to be in line with the overall industry. Cox Automotive and Edmunds project third-quarter sales industrywide will be down roughly 2% compared to a year earlier.

GM’s sales were assisted by a roughly 60% year-over-year increase in EVs during the quarter, to roughly 32,100 units sold. Still, EVs made up only 4.9% of the company’s total third-quarter sales.

GM forecasts its market share was 9.5% of the U.S. EV market, up 3 percentage points from the first quarter of this year.

While GM has withdrawn most of its previously announced electric vehicle targets, the automaker believes its EV sales momentum is finally building thanks to an expanding lineup of all-electric vehicles — spanning a price range of roughly $35,000 to more than $300,000.

“We are definitely outstripping the industry in terms of growth, in terms of EVs,” Rory Harvey, GM president of global markets, including North America, told CNBC last month. “We have the most comprehensive EV lineup out of any manufacturer in the industry, in the U.S., at the moment.”

GM’s EV sales were led by the Cadillac Lyriq crossover at roughly 7,224 units sold during the quarter, followed by the Hummer EV pickup and SUV at 4,305 units.

Sales of small, gas-powered crossovers such as the Chevrolet Trax and Buick Envista and Envision also experienced notable increases compared with a year earlier, GM reported.

GM’s total 2024 sales of 1.95 million vehicles through the third quarter were down 1% compared with the first nine months of 2023.

An unknown outlier in the third quarter is how much of an effect Hurricane Helene had on vehicle sales in the South, since it hit the U.S. in late September. It’s also unclear how much a strike at U.S. East Coast and Gulf Coast ports will impact sales during the fourth quarter.

GM is one of several automakers to report its third-quarter or September sales on Tuesday. Here are other reported U.S. sales compared with the third quarter of 2023:

The Hyundai brand reported total sales of 210,971 units, a 5% increase over the third quarter of 2023 and the second best third-quarter in the company’s history. Hyundai’s Genesis luxury brand reported its best-ever third quarter of 20,117 units, up roughly 4% from a year earlier.
Toyota Motor reported an 8% decrease in third-quarter sales, including a 20.3% decrease in September.
Nissan reported a sales decline of 2.2% to 212,068 vehicles sold during the third quarter.