Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Fords Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.
Nic Antaya | Getty Images
DETROIT – Ford Motor is set to report its fourth-quarter earnings after the bell Thursday. Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:
Adjusted earnings per share: 62 cents
Automotive revenue: $40.37 billion
In October, Ford confirmed its prior full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion. Through the first three quarters of the year, its brought in $7.9 billion, led by its North American operations.
If Ford meets or exceeds Wall Street’s top- and bottom-line expectations, EPS would more than double the 26 cents it reported for the same period a year earlier. Revenue would be an increase of 14.5% from the fourth quarter of 2021.
While investors will be monitoring the fourth-quarter results for signs of any waning consumer demand or profit dilution, Ford’s 2023 guidance is expected to be more of a focus.
Wall Street expects Ford’s full-year 2023 adjusted earnings per share outlook to mark a nearly 16% decline from 2022, according to Refinitiv estimates. That’s despite forecasting full-year revenue up 3.4% year over year to more than $151 billion, signaling lower operational profit compared with recent years.
Automakers have posted record or near-record results during the coronavirus pandemic amid a tight supply of new vehicles and resilient consumer demand. But that scenario is slowly normalizing, leaving new vehicle prices and profits in flux.
On Monday, Ford cut the price of its electric Mustang Mach-E, an early sign of a burgeoning EV price war spurred by Tesla.
Earlier Thursday, Ford reported January new vehicles sales that showed slight improvement over the same period last year.
There’s pressure on Ford to deliver a strong fourth quarter and relatively solid guidance. Crosstown rival General Motors on Tuesday significantly outperformed Wall Street’s expectations. The automaker also forecast stronger-than-expected 2023 results, including adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.
This is breaking news. Please check back for updates.
The S&P 500 rose to its highest level in five months on Thursday as better-than-expected Meta results further improved sentiment around technology shares, which led the market lower last year.
The broader market index jumped 1.4%, or its best level since August. Meanwhile, the tech-heavy Nasdaq Composite advanced about 3% to its highest level since September. The gains come ahead of a trio of Big Tech results after the bell in Apple, Amazon and Alphabet.
Meanwhile, the Dow Jones Industrial Average underperformed, falling 102 points, or about 0.3%. The major index was dragged by Merck shares after the pharmaceutical firm issued a weak outlook in its latest earnings results, despite beating estimates on the top and bottom lines.
Meta surged more than 25% in its best day since 2013 after reporting a fourth-quarter beat on revenue and announcing a $40 billion stock buyback. That helped investors look past losses in the business unit overseeing the metaverse.
Other mega-cap tech stocks rose on the back of those results. Shares of Google-parent Alphabet were up more than 6%, while Amazon jumped more than 6%. Apple shares gained more than 3%.
Tech stocks have outperformed in 2023, buoyed by recent signals of cooling inflation that investors expect could lead to a pause from the Federal Reserve in its aggressive rate hiking campaign. The S&P 500 information technology sector is up more than 14% this year after a decline of more than 28% last year.
“It’s showing that growth is outperforming value as it unwinds some of the pressures that hawkish rhetoric brought to risk markets over the course of 2022,” said Keith Buchanan, senior portfolio manager at GLOBALT Investments.
Wall Street is coming off a winning session after the Fed on Wednesday announced a 0.25 percentage point interest rate hike. While the central bank gave no indication of an upcoming pause in rate hikes, investors were encouraged by the smaller increase and Chair Jerome Powell’s comments recognizing easing inflation.
Traders are awaiting the latest jobs report Friday that will give further insight into the labor market. Any signs of cooling could suggest to investors that further rate hikes are off the table.
Check out the companies making headlines before the bell.
McDonald’s — Shares dipped more than 1% after McDonald’s reported its latest quarterly results. The fast food giant topped earnings and revenue estimates, saying customers are increasingly visiting its restaurants. Still, McDonald’s CEO Chris Kempczinski said he expects “short-term inflationary pressures to continue in 2023.”
General Motors — Shares of the automaker rose more than 5% in premarket trading after GM beat estimates on the top and bottom lines for its fourth quarter, even as its profit margin narrowed. The company reported an adjusted $2.12 per share on $43.11 billion in revenue. Analysts surveyed by Refinitiv were looking for $1.69 in earnings per share on $40.65 billion in revenue. GM said it expected earnings to fall in 2023, but guidance was still above analyst estimates.
Ford — Shares of Ford rose 2% after the company announced Monday it would lower the price of the Mach-E, its electric pickup truck. The company reports earnings later in the week.
United Parcel Service – Shares of UPS rose 1.9% after the company reported earnings that beat analyst expectations. The company posted adjusted earnings per share of $3.62 on $27.08 billion in revenue. Analysts had forecast earnings of $3.59 per share and $28.09 billion in revenue, per Refinitiv.
Exxon Mobil — The oil giant was under pressure despite reporting upbeat financial results for the latest quarter. The company, whose stock price rallied more than 80% last year, saw a tightening in supplies as economies began recovering, CEO Darren Woods said in a statement. Shares fell more than 1%.
Caterpillar — Caterpillar shares fell more than 2% after the industrial giant posted a disappointing quarterly profit. The company reported earnings of $3.86 per share, well below a Refinitiv consensus estimate of $4.06 per share. Caterpillar said its bottom line was impacted by an “unfavorable ME&T foreign currency impact in other income (expense) of $0.41 per share.”
Pfizer – Shares of the vaccine maker fell more than 2% after the company reported mixed quarterly results and issued earnings and revenue guidance for the full year that came in below analysts’ expectations, according to StreetAccount. Pfizer said it expects revenues from its Comirnaty and Paxlovid drugs to fall 64% and 58%, respectively, from actual 2022 results.
International Paper – The packaging and paper products company reported fourth-quarter adjusted operating earnings of 87 cents per diluted share, exceeding StreetAccount’s estimate of 69 cents per diluted share. However, the company reported a net earnings loss of $318 million for the quarter. International Paper nearly 6% in the premarket.
Lucid – Shares of Lucid slipped 4.4%, further cooling off after a monster options fueled rally on Friday.
PulteGroup – Shares of the homebuilder rose more than 1% in premarket trading after PulteGroup reported a better-than-expected fourth quarter. The company reported $3.63 in adjusted earnings per share on $5.17 billion of revenue. Wall Street analysts were expected $2.93 in earnings per share on $4.58 billion of revenue, according to StreetAccount. PulteGroup’s homebuilding gross margin rose year over year.
— CNBC’s Fred Imbert, Jesse Pound, Tanaya Macheel, Sarah Min, Carmen Reinicke and Michelle Fox contributed reporting
Fordis boosting production of its popular Mustang Mach-E electric SUV and dropping its sticker price weeks after Tesla dropped prices of its vehicles. The move represents a substantial roll-back of price hikes Ford announced last summer on the 2023 models – but buyers may still be paying somewhat more than before the increases.
The Mustang Mach-E, a midsize electric family SUV, was the first serious electric effort for the Dearborn, Michigan-based automaker. Priced and aimed squarely at the Tesla Model Y, which has its own starting price of $53,490, the Mach-E is Ford’s bet to get new car buyers to dip their toes into the battery-powered future. it has since been joined in the electric Ford lineup by the workhorse Ford F-150 Lightning. But the company still considers the Mach-E a crucial step for the company’s electric-powered growth.
Late last year, Darren Palmer, Ford’s vice president of electric vehicle programs, told CNN Business that the Mach-E was completely sold out and the automaker was holding off on launching it in more global markets in order to catch up with US demand.
“We could sell it out at least two or three times over,” he said a the time.
The price cuts Ford announced Monday were biggest on the most expensive versions of the SUV, just as the increases had been biggest on those models. The base sticker of the Mustang Mach-E GT Extended Range, a high-performance version of the SUV, dropped to about $64,000 from $69,900 before, a decrease of $5,900. But that model had been about $62,000 before price increases last August.
When it announced those price bumps, Ford also said it was putting more standard features into the vehicles, including advanced driver assistance features.
The price of the least expensive Mach-E, the rear-wheel-drive standard range model, was cut $900, going from about $46,900 down to $46,000. The price of the extended range battery pack option, by itself, dropped from $8,600 down $7,000.
Tesla announced price cuts of as much as 20% on its electric vehicles earlier this month, after raising prices in 2022.
When Ford announced the price increases last summer, citing supply chain issues, the automakers indicated it would continue monitoring market conditions throughout the upcoming model year.
Ford announced last summer that it was increasing production of the Mach-E as it added capacity for more battery production. The automaker also announced in late August that it was reopening order banks for the Mach-E which had been closed as the company worked to meet existing orders.
Customers who complete the transaction for their Mach-E after today’s announcement will pay the new lower price, Ford said. Ford will reach out directly to Mach-E customers with a sale date after January 1, 2023 who already have their vehicles,the automaker said.
At least some versions of both models are currently eligible for federal electric vehicle tax credits, according to the Internal Revenue Service, but both are treated as cars, not SUVs, under the tax rules, unless equipped with a third row of seats.
That means that tax credits are available for the two-row only Mach-E and two-row Model Y only if the sticker price is below $55,000. For versions of the Model Y with a third row of seats, a $4,000 option, buyers may get tax credits with a sticker price up to $80,000.For the Mustang Mach-E, a third row of seats isn’t offered.
The final amount of the tax credit may depend on when the vehicle is actually delivered to the customer and, also, whether the customers themselves meet annual income requirements.
Customers wearing protective masks looks at the interior of a vehicle for sale at a Ford Motor Co. dealership in Colma, California, Feb. 1, 2021.
David Paul Morris | Bloomberg | Getty Images
DETROIT — As automakers chase Tesla-like profits on new electric vehicles, they face an existential question: how best to bring franchised auto dealers along with them as they transition to EVs.
Some, such as General Motors, are asking luxury dealers to go all-in on EVs or get out of the business. Others like Ford Motor are offering dealers different “EV-certification” levels, while most other carmakers, or OEMs, know they need to change the sales process to fit the evolving industry, but are still try to figure out how to do it.
“I think we’re all building this airplane as we fly,” Michael Alford, president of the National Auto Dealers Association, a trade association that represents more than 16,000 U.S. new franchised dealers, told CNBC. “Depending on the OEM, the level of engagement or the intensity of the engagement varies.”
Automakers and franchised dealers have a complex relationship that is backed, in many states, by laws that make it difficult, if not illegal, to bypass franchised dealers and sell new vehicles directly to consumers. (Tesla and other newer EV startups have worked around such regulations to cut costs.)
Both automakers and franchised dealers want to maximize profits, but they’re separate businesses that heavily rely on one another to succeed. Dealers rely on automakers for product to fill and move off lots, and the carmakers in turn rely on dealers to sell and service vehicles as well as serve as concierges for customers.
How that historical relationship fits into an all-electric future is expected to be at the forefront of discussions between automakers and dealers at the National Auto Dealers Association Show occurring through Sunday in Dallas. The event attracts thousands of franchise dealers annually to hear from their respective automotive brands.
For dealers — from mom-and-pop shops to large publicly traded chains — EVs will mean new employee training, infrastructure and substantial investments in their stores to be able to service, sell and charge the vehicles. Depending on the size of the dealer, those upgrades could easily cost hundreds of thousands, or millions, of dollars. Of course, they want to make sure their investments will pay off.
“The tone and tenor of this subject matter has evolved, and I think it’s very, very clear this year that our legacy OEMs absolutely realize that we are essential going forward,” said Alford, who runs Chevrolet and Cadillac dealerships in North Carolina.
Competing with Tesla
As more automakers introduce EVs, they’re rethinking the sales process, including selling new vehicles largely, if not fully, online. Tesla was among the first automakers to embrace online sales for a large portion of its business, though it still has physical dealerships, information sites and service shops.
A greater shift online may limit the role of dealers to strictly processing, maintenance and as delivery centers going forward and eliminate the need for large lots of cars that they then sell to consumers.
“By and large, the franchise system remains in place even for EVs by traditional automakers, although they all seem to be looking at ways to tweak it to be more competitive, so they say, with the Teslas of the world,” said Michelle Krebs, Cox Automotive executive analyst.
Automakers believe doing so will provide consumers a more streamlined and cohesive sales process, but they also consider the dealers to be their partners and to offer “strategic advantages” when it comes to other sales and maintenance issues.
A Tesla dealership in Colma, California, on Wednesday, Jan. 26, 2022.
David Paul Morris | Bloomberg | Getty Images
Honda Motor has said it plans to move more sales online, including 100% online sales for its luxury Acura brand for EVs. Mamadou Diallo, American Honda vice president of sales, said the plan is to facilitate the ordering process online, but with the vehicle being picked up or delivered by dealers. Those procedures are still being worked out, though, he said.
“We want to proceed with ensuring that we provide convenience with what customers are looking for, with no intention of bypassing our dealer body,” Mamadou said Tuesday during a media call.
Jay Vijayan, who assisted in building out Tesla’s digital and IT systems, doesn’t believe selling EVs exclusively online will pan out. He said a mix of sales points is best, which is why Tesla and newer EV startups are selling online as well as opening new showrooms and service centers.
“Apple still opens new stores, right? And every company you think is going to go direct is also opening new stores in the automotive space,” said Vijayan, founder and CEO of Tekion, a cloud-based dealer service provider.
Wall Street analysts have largely viewed direct-to-consumer sales as a means to optimize profit. However, there have been growing pains for Tesla when it comes to servicing its vehicles.
Ford CEO Jim Farley has said he wants the automaker’s dealers to cut selling and distribution costs by $2,000 per vehicle to be competitive with Tesla’s direct-to-consumer model.
Automaker approaches
Ford is among the automakers receiving the most pushback from dealers for its EV push, which includes EV-certification tiers that could cost more than $1 million per store, depending on the size of the dealership.
The Detroit automaker is facing legal challenges to the certification program from dealers who argue that the plan violates franchise laws. A group of 27 dealerships in Illinois filed a protest with the state’s motor vehicle review board, and four dealers in New York filed suit against the automaker last month, according to Automotive News.
Ford dealer Marc McEver said he signed on for the highest EV-certification tier at his dealership near Kansas City, Kansas, but he worries about the cost and timing of the program.
“I think we’re all concerned that what they’re having us put in now, by the time we really get some vehicles, will be outdated and need to be upgraded or replaced,” McEver, who also owns a Lincoln dealership, said.
Aside from the investments, dealers who opt into selling Ford EVs will need to abide by five standards to stay within good standing: clear and nonnegotiable pricing; charging investment; employee training; and improved vehicle purchasing and ownership experience for customer, both digitally and in person.
Ford on Saturday plans to outline some changes to its EV-certification tiers, according to two people familiar with the plans. The changes, as first reported by Automotive News, would narrow the differences between the program’s two tiers. The bottom tier comes with lower capital investment but also a smaller allocation of EVs from Ford.
Ford, though, unlike archrival General Motors, is allowing dealers to opt out of selling EVs and continue to sell the company’s gas-powered cars.
GM has offered buyouts to its Buick and Cadillac dealers that don’t want to shell out to sell EVs. About 320 of Cadillac’s 880 retailers took buyouts. Buick’s buyouts are ongoing, according to a spokesman.
Toyota Motor, for its part, has no plans to overhaul its franchised dealership network as it invests in electrified vehicles, CEO Akio Toyoda told dealers to resounding applause in September.
“I know you are anxious about the future. I know you are worried about how this business will change. While I can’t predict the future, I can promise you this: You, me, us, this business, this franchised model is not going anywhere. It’s staying just as it is,” said Toyoda, who will step down as CEO to become chairman in April.
For the 275,000 Amazon drivers dropping off 10 million packages a day around the world, the job can be a grind. But a lot has changed since drivers in 2021 told CNBC about unrealistic workloads, peeing in bottles, dog bites and error-prone routing software.
Among the biggest developments is the arrival of a brand-new electric van from Rivian.
Amazon was a big and early investor in the electric vehicle company, which went public in late 2021 with a plan to build trucks and SUVs for consumers and delivery vans for businesses. Since July, Amazon has rolled out more than 1,000 new Rivian vans, which are now making deliveries in more than 100 U.S. cities, including Baltimore, Chicago, Las Vegas, Nashville, New York City and Austin, Texas.
The partnership began in 2019, when Amazon founder and ex-CEO Jeff Bezos announced Amazon had purchased 100,000 electric vans from Rivian as one step toward his company’s ambitious promise of reaching net-zero carbon emissions by 2040.
″[We] will have prototypes on the road next year, but 100,000 deployed by 2024,” Bezos said at the National Press Club in Washington, D.C., in September 2019. Amazon has since revised the timeline, saying it expects all 100,000 Rivian vans on the road by 2030.
Rivian has faced several challenges in recent months. It cut back 2022 production amid supply chain and assembly line issues. Its stock price dropped so sharply last year that Amazon recorded a combined $11.5 billion markdown on its holdings in the first two quarters.
CNBC talked to drivers to see what’s changed with the driving experience. We also went to Amazon’s Delivering the Future event in Boston in November for a look at the technology designed to maximize safety and efficiency for delivery personnel.
For now, most Amazon drivers are still in about 110,000 gas-powered vans — primarily Ford Transits, Mercedes-Benz Sprinters and Ram ProMasters. Amazon wouldn’t share how it determines which of its 3,500 third-party delivery firms, or delivery service partners (DSPs), are receiving Rivian vans first.
The e-commerce giant has been using DSPs to deliver its packages since 2018, allowing the company to reduce its reliance on UPS and the U.S. Postal Service for the so-called last mile, the most expensive portion of the delivery journey. The DSP, which works exclusively with Amazon, employs the drivers and is responsible for the liabilities of the road, vehicle maintenance, and the costs of hiring, benefits and overtime pay.
Amazon leases the vans to DSP owners at a discount. The company covers the fuel for gas-powered vans and installs charging stations for electric vehicles.
The company says DSP owners have generated $26 billion in revenue and now operate in 15 countries, including Saudi Arabia, India, Brazil, Canada, and all over Europe.
What drivers think
In the early days of testing the Rivian vans, some drivers voiced concerns about range. An Amazon spokesperson told CNBC the vans can travel up to 150 miles on a single charge, which is typically plenty of power for a full shift and allows drivers to recharge the vehicle overnight.
As for maintenance, Amazon says that takes place at Rivian service centers near delivery stations or by a Rivian mobile service team, depending on location.
Julietta Dennis launched a DSP, Kangaroo Direct, in Baltimore three years ago. She employs about 75 drivers and leases more than 50 vans from Amazon. She now has 15 Rivian vehicles.
“It’s very easy to get in and out with all of the different handles to hold on to,” Dennis said. She said that some drivers were hesitant at first because the vehicles were so new and different, “but the moment they get in there and have their first experience, that’s the van that they want to drive.”
Baltimore DSP owner Julieta Dennis shows off a Rivian electric van at Amazon’s Delivering the Future event in Boston, Maryland, on November 10, 2022.
Erin Black
Brandi Monroe has been delivering for Kangaroo Direct for two years. She pointed to features on a Rivian van that are upgrades over what she’s driven in the past. There’s a large non-slip step at the back, a hand cart for helping with heavy packages and extra space for standing and walking in the cargo area.
“We have two shelves on both sides to allow for more space,” Monroe said, adding that she’d prefer to drive a Rivian for every shift. “And then the lights at the top: very innovative to help us see the packages and address a lot easier, especially at nighttime.”
There’s even a heated steering wheel.
Former driver B.J. Natividad, who goes by Avionyx on YouTube, says his non-electric van could get very cramped.
“I remember one time I had 23 or 24 bags and over 40 oversize packages and I had to be able to figure out how to stuff that all in there within the 15 minutes that they give us to load up in the morning,” said Natividad, who now works for USPS.
The Rivian vans have at least 100 more cubic feet than the Sprinter and up to double the cargo space of the Ford Transit vans Natividad drove in Las Vegas. Rivian vans are still small enough that they don’t require a special license to drive, though Amazon provides its own training for drivers.
One driver in Seattle, who asked to remain unnamed, was especially excited about the new Rivian vans. He offered an extensive tour of the new driving experience on his YouTube channel called Friday Adventure Club.
He said one of his favorite features is a light bar “that goes all the way around the back.” He also likes that the windshield is “absolutely massive,” the wide doors allow for easy entry and exit, and the cargo door automatically opens when the van is parked. There are two rows of shelves that fold up and down in the cargo area.
There’s also new technology, such as an embedded tablet with the driving route and a 360-degree view that shows all sides of the van.
Mai Le, Amazon’s vice president of Last Mile, oversaw the testing of the center console and Rivian’s integrated software.
“We did a lot of deliveries as a test,” Le said. “As a woman, I want to make sure that the seats are comfortable for me and that my legs can reach the pedals, I can see over the steering wheel.”
She demonstrated some of the benefits of the new technology.
“When we start to notice that you’re slowing down, that means that we can tell you’re getting near to your destination,” she said. “The map begins to zoom in, so you begin to find where’s your delivery location, which building and where parking could be.”
The new vans have keyless entry. They automatically lock when the driver is 15 feet away and unlock as the driver approaches.
Workers load packages into Amazon Rivian Electric trucks at an Amazon facility in Poway, California, November 16, 2022.
Sandy Huffaker | Reuters
Cameras and safety
Above all else, Amazon says the changes were designed to make the delivery job safer.
A ProPublica report found Amazon’s contract drivers were involved in more than 60 serious crashes from 2015 to 2019, at least 10 of which were fatal. Amazon put cameras and sensors all over the Rivian vans, which enable warnings and lane assist technology that autocorrects if the vehicle veers out of the lane.
Dennis mentioned the importance of automatic braking and the steering wheel that starts “just kind of shaking when you get too close to something.”
“There’s just so many features that would really, really help cut back on some of those incidental accidents,” she said.
Amazon vans have driver-facing cameras inside, which can catch unsafe driving practices as they happen.
“The in-vehicle safety technology we have watches for poor safety behaviors like distracted driving, seat belts not being fastened, running stop signs, traffic lights,” said Beryl Tomay, who helps run the technology side of delivery as vice president of Last Mile for Amazon.
“We’ve seen over the past year a reduction of 80% to 95% in these events when we’ve warned drivers real time,” she said. “But the really game-changing results that we’ve seen have been almost a 50% reduction in accidents.”
As a DSP owner, Dennis gets alerts if her drivers exhibit patterns of unsafe behavior.
“If something with a seat belt or just something flags, then our team will contact the driver and make sure that that’s coached on and taken care of and figured out, like what actually happened,” Dennis said.
That level of constant surveillance may be unsettling for some drivers. Dennis said that issues haven’t come up among her staffers. And Amazon stresses it’s focused on driver privacy.
“We’ve taken great care from a privacy perspective,” Tomay said. “There’s no sound ever being recorded. There’s no camera recording if the driver’s not driving and there’s a privacy mode.”
Amazon says the cabin-facing camera automatically switches off when the ignition is off, and privacy mode means it also turns off if the vehicle is stationary for more than 30 seconds.
Safety concerns extend beyond the vehicle itself. For example, an Amazon driver in Missouri was found dead in a front yard in October, allegedly after a dog attack.
Amazon says new technology can help. Drivers can choose to manually notify customers ahead of a delivery, giving them time to restrain pets. Another feature that’s coming, according to Le, will allow drivers to mark delivery locations that have pets.
Natividad said he had multiple close calls with dogs charging at him during deliveries.
“You customers out there, please restrain your dogs when you know a package is coming,” he said. “Please keep them inside. Don’t leave them just outside.”
Optimizing routes
Providing drivers with more efficient and better detailed routes could improve safety, too. Drivers in 2021 told us about losing time because Amazon’s routing software made a mistake, like not recognizing a closed road or gated community. In response, they sometimes tried to save time in other ways.
“People are running through stop signs, running through yellow lights,” said Adrienne Williams, a former DSP driver. “Everybody I knew was buckling their seat belt behind their backs because the time it took just to buckle your seat belt, unbuckle your seat belt every time was enough time to get you behind schedule.”
Amazon listened. The company has been adding a huge amount of detail to driver maps, using information from 16 third-party map vendors as well as machine learning models informed by satellite driver feedback and other sources.
One example is a new in-vehicle data collection system called Fleet Edge, which is currently in a few thousand vans. Fleet Edge collects real-time data from a street view camera and GPS device during a driver’s route.
“Due to Fleet Edge, we’ve added over 120,000 new street signs to Amazon’s mapping system,” Tomay said. “The accuracy of GPS locations has increased by over two and a half times in our test areas, improving navigation safety by announcing upcoming turns sooner.”
Tomay said the maps also added points of interest like coffee shops and restrooms, so in about 95% of metro areas, “drivers can find a spot to take a break within five minutes of a stop.”
In 2021, Amazon apologized for dismissing claims that drivers were urinating in bottles as a result of demanding delivery schedules. Natividad said he occasionally found urine-filled bottles in his vans before his shift in the mornings.
“As soon as I open the van, I’m looking around, I see a bottle of urine. I’m like, ‘Oh, I’m not touching this,'” he said.
Pay for Amazon drivers is up to the discretion of each individual DSP, although Amazon says it regularly audits DSP rates to make sure they’re competitive. Indeed.com puts average Amazon driver pay at nearly $19 an hour, 16% higher than the national average.
Natividad started delivering for Amazon in 2021 when his gigs as a fulltime disc jockey dried up because of the pandemic. He liked the job at the time, generally delivering at least 200 packages along the same route. However, during the holiday season that year, he once had more than 400 packages and 200 stops in a single shift.
“Towards the end of my day, they sent out two rescues to me to help out to make sure everything’s done before 10 hours,” he said.
Amazon is working to optimize its routes. But it’s an unwieldy operation. The company says it’s generated 225,000 unique routes per day during peak season.
Tomay said the company looks at the density of packages, the complexity of delivery locations “and any other considerations like weather and traffic from past history to put a route together that we think is ideal.”
There’s no one-size-fits-all solution.
“Given that we’re in over 20 countries and every geography looks different, it’s not just about delivery vehicles or vans anymore,” Tomay said. “We have rickshaws in India. We have walkers in Manhattan.”
In Las Vegas, Amazon held a roundtable last year for DSP owners and drivers. Natividad says he spoke for 20 minutes at the event about the need for Amazon to improve its routing algorithms.
“I think they should do that probably once a month, with all the DSP supervision and a few of the drivers, and not the same drivers every time. That way different feedback is given. And like seriously listen to them,” Natividad said. “Because they’re not the ones out there seeing and experiencing what we go through.”
Natividad didn’t get to try out the routing technology in the Rivian vans before he left to deliver for USPS in July. He’s excited that the postal service is following in Amazon’s footsteps with 66,000 electric vans coming by 2028.
Amazon, meanwhile, is diversifying its electric fleet beyond Rivian. The company has ordered thousands of electric Ram vans from Stellantis and also has some on the way from Mercedes-Benz.
DETROIT – General Motors reclaimed its U.S. sales crown from Toyota Motor last year as the Detroit automaker eked out a slight gain in annual U.S. vehicle sales despite supply chain problems.
GM said Wednesday it sold 2.27 million vehicles in the U.S. in 2022, up by 2.5% over 2021, including a 41.4% increase during the fourth quarter. Analysts expect overall U.S. auto industry sales to have declined by 8% and 10% last year compared to 2021.
Toyota said it sold 2.1 million vehicles in the U.S. last year, down 9.6% from 2021. The company was able to manage supply chain problems, specifically with semiconductor chips, better than others.
Toyota edged out GM in sales by 114,034 vehicles in 2021 – dethroning the Detroit automaker for the first time since 1931 when it surpassed Ford Motor. Toyota executives previously said the top sales spot was unattainable, but CEO Akio Toyoda last year told dealers he did a “happy dance” when he heard the news.
Jack Hollis, executive vice president of Toyota Motor North America, on Wednesday said the Japanese automaker remains focused on retail sales, which are traditionally more profitable than commercial or fleet sales. Toyota has led those sales for several years.
EVs
Despite recent criticism of its all-electric vehicle strategy, Toyota on Wednesday touted that it leads the country in electrified vehicle sales. Those include hybrid, plug-in and all-electric cars and trucks.
GM, in contrast, largely ditched hybrids for an all-electric vehicle strategy but has been slow to ramp up production. GM’s U.S. EV sales represented less than 2% of its sales in 2022.
In a release Wednesday, GM called EVs “growth opportunities.” It’s expected to release more mainstream models such as the Chevrolet Blazer and Chevrolet Equinox EV crossovers.
GM was able to achieve record U.S. sales of 38,120 Chevrolet Bolt EV and EUV models in 2022. However, it sold fewer than 1,000 units of its luxury GMC Hummer EV and Cadillac Lyriq, combined.
GM said production of the Bolt models is expected to increase to more than 70,000 units this year to meet strong global demand. The company last year pushed back plans to produce 400,000 EVs in North America through 2023 to mid-2024.
Tesla just published its fourth-quarter vehicle production and delivery report for 2022.
Here are the key numbers.
Total deliveries Q4 2022: 405,278 Total production Q4 2022: 439,701 Total annual deliveries 2022: 1.31 million Total annual production 2022: 1.37 million
Deliveries are the closest approximation of sales disclosed by Tesla. These numbers represented a new record for the Elon Musk-led automaker and growth of 40%in deliveries year-over-year.
However, the fourth quarter numbers fell shy of analysts’ expectations.
According to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022 Wall Street was expecting Tesla to report deliveries around 427,000 for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.
Those more recent estimates were in line with a company-compiled consensus distributed by Tesla investor relations Vice President Martin Viecha. That consensus, published by electric vehicle industry researcher @TroyTeslike, said that 24 sell-side analysts expected Tesla deliveries of about 417,957 on average for the quarter (and about 1.33 million deliveries for the full year).
Tesla started production at two new factories this year — in Austin, Texas and Brandenburg, Germany — and ramped up production in Fremont, California and in Shanghai, but it does not disclose production and delivery numbers by region.
In the fourth quarter of 2022, Tesla said deliveries of its entry level Model 3 sedan and Model Y crossover amounted to 325,158, while deliveries of its higher end Model S sedan and Model X SUV amounted to 18,672.
In its third-quarter shareholder presentation, Tesla wrote: “Over a multi-year horizon we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”
The period ending Dec. 31, 2022 was marked by challenges for Tesla, including Covid outbreaks in China, which caused the company to temporarily suspend and reduce production at its Shanghai factory.
During the fourth quarter, Tesla also offered steep price cuts and other promotions in the U.S., China and elsewhere in order to spur demand, even though doing so could put pressure on its margins.
In a recent e-mail to Tesla staff, Elon Musk asked employees to “volunteer” to deliver as many cars to customers as possible before the end of 2022. In his e-mail, Musk also encouraged employees not to be “bothered” by what he characterized as “stock market craziness.”
Shares of Tesla plunged by more than 45% over the last six months.
In December, several analysts expressed concern about weakening demand for Tesla electric vehicles, which are relatively expensive compared with an increasing number of hybrid and fully electric products from competitors.
Along with competitors ranging from industry veterans Ford and GM to upstart Rivian, Tesla is poised to reap the benefits of Biden’s Inflation Reduction Act this year, which includes incentives for domestic production and purchases of fully electric cars.
Retail shareholders and analysts alike attributed some of Tesla’s falling share price in 2022 to a so-called “Twitter overhang.”
Musk sold billions of dollars worth of his Tesla holdings last year to finance a leveraged buyout of the social media business Twitter. That deal closed in late October. Musk appointed himself CEO of Twitter and has stirred controversy by making sweeping changes to the company and its social media platform.
Shares of Tesla started to rise again in the final days of December 2022, in anticipation of record fourth-quarter and full-year deliveries.
The 2023 Lincoln Corsair will offer the company’s next-generation ActiveGlide hands-free advanced driver assistance system (ADAS) for highway driving including lane-changing, in-lane positioning and predictive speed assist.
Lincoln
DETROIT – Letting go is hard. Even if major automakers want to make it easier.
Car companies are rapidly expanding technologies that can control the acceleration, braking and steering of a vehicle. In some cases, allowing drivers to ease off the steering wheel or pedals for miles at a time.
The systems – formally known as advanced driver assistance systems (ADAS) – have the potential to unlock new revenue streams for companies while easing driver fatigue and improving safety on the road. But automakers have largely built their systems independent of one another, without industry-standard guidelines by federal regulators. That means years into development, “hands-free” or “semi-autonomous” can mean something very different in the hands of rival automakers.
To be clear, no vehicle on sale today is self-driving or autonomous. Drivers always need to pay attention. Current ADAS mostly use a suite of cameras, sensors and mapping data to assist the driver and also monitor the driver’s attentiveness.
The automaker most often discussed alongside ADAS is Tesla, which has a range of technologies that it haphazardly calls “Autopilot” and “Full Self-Driving Capability,” among other names. (The vehicles do not fully drive themselves.) But General Motors, Ford Motor and others are quickly releasing or improving their own systems and expanding them to new vehicles.
I recently tested ADAS from Tesla, GM and Ford. Their systems are among the most readily available and dynamic on the market. However, none of them were close to flawless during my time behind the wheel.
And even small differences across the systems can have a big impact on driver safety and confidence.
GM’s Super Cruise
I initially tested GM’s system a decade ago on a closed track, and the automaker’s years developing Super Cruise have clearly paid off in overall performance, safety and clear communication with the driver. It’s the best-performing and most consistent system.
GM initially released Super Cruise on a Cadillac sedan in 2017 – two years after Tesla’s Autopilot – before expanding it to 12 vehicles in recent years. It aims to make Super Cruise available on 22 cars, trucks and SUVs globally by the end of 2023.
The system allows drivers to operate “hands-free” when driving on more than 400,000 miles of pre-mapped divided highways in the U.S. and Canada. (Ford has mapped 150,000 miles, and Tesla’s system hypothetically operates on any highway.)
When the steering-wheel light bar illuminates in green with GM’s Super Cruise, drivers may remove their hands from the steering wheel.
Michael Wayland / CNBC
Super Cruise is the front-runner when it comes to highway driving and can handle most challenges, including curves and many construction zones. Its newest updates also added automatic lane changes that work quite well to maintain a set speed by avoiding slower vehicles.
Over hundreds of miles driving the system, I was able to regularly engage Super Cruise for upward of 30 minutes, even stretching one stint to more than an hour without ever having to take control of the vehicle. When Super Cruise did disengage, it would typically be available again minutes, if not seconds, later.
The majority of problems I experienced were likely due to outdated mapping data that the system requires to operate, according to GM. When there’s newly finished construction or heavier temporary work being done, GM’s system defaults to returning control back to the driver until the road is properly pre-mapped.
GM says it has produced more than 40,000 vehicles equipped with Super Cruise, though not all of those represent active users, and has racked up more 45 million hands-free miles.
Pricing for the system varies based on vehicle and brand — $2,500 for a Cadillac, for example — and carries a subscription cost of $25 per month or $250 per year after a free trial period.
Ford’s BlueCruise
Ford’s system is the newest of the three automakers and is similar to GM’s. Besides pre-mapping and stated capabilities, both systems feature in-vehicle infrared cameras to ensure drivers are paying attention. But if GM’s system is a capable and confident “driver,” Ford’s is still a teenager learning, albeit very quickly.
Ford’s system – marketed as Ford BlueCruise and ActiveGlide for Lincoln – first became available in July 2021, though the company has already expanded the systems to more than 109,000 enrolled vehicles with more than 35 million hands-free driving miles through the end of November.
Pricing for Ford’s system varies based on the brand and vehicle. It can be part of optional packages that run roughly $2,000 and include other features for the 2023 Ford F-150 and Mustang Mach-E. Like GM, it requires a subscription after trial periods.
Also like GM, Ford’s system functions well on highways … that is until it doesn’t. It’s less predictable and specifically struggles with larger or sharper curves, construction zones and under other circumstances a human driver would easily be able to handle.
Ford’s BlueCruise system as displayed on a Mustang Mach-E electric crossover.
Ford
The longest I was able to go hands-free with Ford’s system during my test drives, which largely took place on I-75 and a construction-laden I-94 in rural and urban areas of Michigan, was 20 minutes and about 25 miles.
That’s a problem when you’re attempting to ease driver fatigue and increase drivers’ confidence in such systems.
“Having it randomly disengage when you’re approaching curves in the road, it’s not good enough,” said Sam Abuelsamid, a principal analyst at Guidehouse Insights, who specializes in advanced and emerging automotive technologies.
Chris Billman, chief engineer of ADAS vehicle systems integration at Ford, stressed that the company is being overly cautious with its system at this stage. Despite the warnings to retake control, the system is designed to remain in operation until the driver takes over.
Billman said the system disengages on most large highway curves because it’s not currently designed to slow the vehicle down ahead of a curve – something Super Cruise launched with in 2017. That’s expected to be improved with the system’s next major update, beginning early next year.
Ford’s BlueCruise system displayed on the driver information cluster of an F-150 pickup truck.
Ford
Ford could also improve its system’s interactions with the driver. GM uses a lightbar on the steering wheel and communications in the driver cluster — the best communication features among the three current systems.
That’s not to say Super Cruise isn’t still learning.
Both Ford and GM systems would have likely hit a temporary concrete construction barrier if I hadn’t taken over and disengaged on a large S-curve roadway near Detroit.
Super Cruise and BlueCruise both disengaged several times for what seemed like no reason, only to reengage quickly after. Super Cruise also attempted to merge into a breakdown lane or median in a newly finished construction zone, while Ford’s did a similar maneuver halfway through a curve.
And of course, neither system operates on city streets like Tesla’s.
Then there’s Tesla
Tesla’s technology is by far the most ambitious of the three and operates well on the highway. But it can be nerve-wracking, if not dangerous, on city streets, specifically turning into traffic.
Tesla vehicles come standard with an ADAS known as Autopilot. However, owners can upgrade the system with additional features, for a cost. The Full Self-Driving (FSD) upgrade currently costs $15,000 at the time you purchase a vehicle, or a monthly subscription opted into later costs between $99 and $199 depending on the vehicle, according to Tesla’s website.
I was able to use three Tesla levels of the system with varying functionality in a Tesla Model 3 built in 2019. Driving with the FSD Beta (version 10.69.3.1) was among the most stressful driving moments in my life (and I’ve had a lot!).
During a limited test on the highway, Tesla’s systems functioned very well. The trip included automatic lane changes and navigation-based exiting, although it did overshoot one exit ramp due to traffic. GM and Ford don’t currently link navigation to ADAS.
Tesla’s ADAS is also able to identify traffic lights on city streets and act accordingly, which was very impressive.
One of my biggest problems with Tesla’s system on the highway was how frequently it asked me to “check in” – an action that requires tugging on the steering wheel to prove the driver is physically in the driver’s seat and paying attention. The “check-ins” take some getting used to so the system doesn’t disengage.
I also struggled with the car’s communication about when the system was engaged.
Unlike Ford and GM that prominently show when the system is engaged, the only indication that Tesla’s ADAS is engaged is a tiny steering wheel icon – smaller than a dime – in the top left of the vehicle’s center screen. (The Tesla Model 3 doesn’t have display screens in front of the driver.)
That means to confirm whether the system is engaged, the driver has to actually look away from the road. And if the system disengages it doesn’t communicate that very well, leaving the driver unaware when the system is operating and anxious.
Such problems were even more striking while FSD Beta was operating on surface streets. In addition to the highway problems, the system – as documented in countless YouTube videos – has difficulties with some turns.
Add in what’s known locally as a “Michigan left” – a median U-turn crossover – and the system turns into the equivalent of a young, if not dangerous, student driver. At one point while performing such a maneuver, the Tesla stopped across not one, but three lanes of traffic as it attempted to make the turn before I overtook the system.
On straight, crowded streets of suburban Detroit, Tesla’s system largely worked well. But it lacked the experience to recognize human driver nuances such as stopping to allow others into a lane. It also had some difficulties with lane changes and seemed to be lost when lane markings were not available.
All of these concerns are why no other company has released a system like Tesla’s FSD Beta, which has been criticized for using its customers as test mules. Tesla did not respond to a request for comment on this article.
CEO Elon Musk for several years has promised the vehicles would be capable of fully driving themselves. In a recent argument in response to a lawsuit filed in California, Tesla said that its “failure” to realize such a “long-term, aspirational goal” didn’t amount to fraud and that it would only achieve full autonomous driving “through constant and rigorous improvements.”
Shares in electric vehicle maker Tesla sank to a new 52-week low on Tuesday, closing around $138 per share, or 8% lower for the day in an otherwise mixed day for stocks.
CEO Elon Musk tried to blame the sinking price partly on macroeconomic factors.
related investing news
Long-time Tesla bull Ross Gerber wrote in a tweet, “Tesla stock price now reflects the value of having no CEO. Great job tesla BOD – Time for a shake up. $tsla.” Gerber has launched an informal campaign to have fellow shareholders vote to appoint him to Tesla’s board of directors.
Musk replied, in a tweet, “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.”
Elon Musk speaks during a press conference at SpaceX’s Starbase facility near Boca Chica Village in South Texas on February 10, 2022.
Jim Watson | AFP | Getty Images
But Tesla’s stock has dropped more than other larger automakers since Musk announced his plans to buy Twitter in Apr. 2022. Since that date, Tesla shares are down 59%, versus 26% for Ford and 12% for GM. The S&P 500 is down 14%.
The Tesla chief has a lot of distractions, as Gerber notes: Musk has been stirring controversy as the new owner and CEO of Twitter, the social media giant which he acquired in a leveraged buyout in late October, and is also the CEO of a major defense contractor, SpaceX.
Musk sold billions of dollars of his Tesla holdings to finance the Twitter deal, including a $3.6 billion sale earlier this month.
He told Twitter employees he sold Tesla shares to “save” their business while proceeding to cut more than half of staff at the company and rolling out a host of policy changes, some of which he later reverses.
While Musk has been focused on his new role as “Chief Twit” since late October, Tesla has been offering discounts and incentives to sell cars in China, where it operates a major factory in Shanghai; fighting to make its new factories in Austin, Texas, and Brandenburg, Germany, efficient; and facing persistent supply chain challenges endemic to the auto industry, along with soaring energy prices in Europe which may reduce the appeal of a battery electric vehicle for many drivers.
Those, among other challenges, led Mizuho Securities and Evercore ISI to reduce their Tesla price targets on Tuesday.
Mizuho Securities analysts wrote in a note, that “near-term, we see potential weakness in Tesla sales as macro headwinds and a weaker consumer could drive lower demand for higher-priced EVs.” The firm is still bullish Tesla long-term, citing the company’s new factories as a competitive advantage, and new electric vehicle tax credits on the horizon in the US which could “accelerate demand” domestically. In China, some EV credits are expiring as of the start of 2023. The firm has a price target of $285 and a buy rating on shares of Tesla.
A Vanderbilt University assistant professor, Joshua White, who formerly worked as an economist for the U.S. Securities and Exchange Commission, told CNBC, “Only some of the drop in Tesla’s value can be blamed on interest rates. Twitter overhang is one important component. China is another huge component. We still don’t know if China will be open all the way, and we see there is supply and demand pressure here in light of the increase in covid cases, and disruptions.”
He also said Elon Musk may have lost shareholders’ trust when he said in April that he didn’t plan to sell more of his Tesla shares, but went ahead and sold billions of dollars’ more.
“He seems to sell equity in really large blocks, say ‘I’m done and I’m not selling anymore.’ But talk is cheap. He says that and then sells more shares. So the more you say that and investors think he’s probably not done? The less confident they will be that the price is going to bounce back.”
