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Miami Herald
19 hours ago
- Automotive
- Miami Herald
EV company makes harsh decision amid new launch
With the rising number of electric vehicles on the road, owning a gasoline-powered car might eventually seem almost vintage. Electric vehicles have quickly become a significant part of the automobile industry, and many car companies are trying to enter the market by developing their own. Don't miss the move: Subscribe to TheStreet's free daily newsletter Halfway into 2025, well-known brands like Audi, Cadillac, Chevrolet, Dodge, and Kia have all launched new electric vehicles, and Tesla (TSLA) rolled out its highly anticipated robotaxi service to a select group of riders in Austin, Texas. Related: Tesla unveils an unusual innovation to win back customers The electric vehicle industry continues to grow, with global sales exceeding the expected $17 million in 2024, accounting for over 20% of total car sales. While global sales continue to increase, financial challenges can lead even the most profitable companies to make some harsh decisions for the sake of the business. Image Source:Founded in 2009 as Mainstream Motors, Rivian is an American electric vehicle manufacturer and technology company. However, like any other emerging business, making profits takes time, and the cost of producing electric vehicles is high. Although it boasted continued financial progress, the company didn't achieve profitability until the fourth quarter of fiscal 2024, largely due to cuts in production costs. Since then, Rivian (RIVN) has taken multiple steps to build on this success. Related: Struggling car company swiftly shuts down half its stores In the first quarter of fiscal 2025, Rivian achieved a gross profit of $206 million, marking its second consecutive positive quarter. The EV maker also received a $1 billion investment from Volkswagen Group as part of last year's $5.8 billion joint venture, Rivian and VW Group Technologies, LLC. However, despite delivering good results, production costs continue to increase, especially as the company navigates an uncertain economy and looming U.S. tariffs. This has led Rivian to make a harsh decision that may have come as a surprise to some. Rivian revealed it has laid off around 140 employees from its manufacturing division, representing around 1% of its total workforce. The downsizing comes when the company is only months away from launching its new R2 SUV in 2026, a new electric five-seat SUV that's a more compact and far more affordable alternative. More Retail News: This might deliver the economy news people want to hearBankrupt retail chain makes major comeback, reopens new storesJPMorgan Chase hikes up annual fee cost of popular credit card The layoffs began on June 25, and those affected were told that the company's decision to cut manufacturing salaried positions was made to improve its operational efficiency ahead of the R2 launch. However, this is not the first time Rivian has made serious cuts within its workforce. The company did two rounds of layoffs last year, cutting around 10% of its salaried employees in February and 1% in April. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Newsweek
a day ago
- Automotive
- Newsweek
Which Automaker Startups Will Be a Success? Analysts Weigh In
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. The road to automaker profitability is littered with names that are both familiar and long since forgotten. Even in today's business climate, where vast amounts of data are available at the fingertips, creating a car that people are willing to pay for is a moonshot. Henrik Fisker tried twice. VinFast has already pulled out of the U.S. Peugeot promised to come to America and is now firmly against it. "Ultimately, surviving in the automotive industry isn't just about vision—it's about endurance. The startups that win will be the ones that don't just launch well, but scale wisely, deliver consistently, and adapt faster than the giants they're trying to disrupt," Paul Waatti, director of industry analysis at AutoPacific, told Newsweek. Newsweek asked some of the world's top auto industry analysts to weigh in on the potential future of six companies, all of which fit into the category of startup, even if they have been around for a while: Rivian, Lucid Motors, Tesla, Slate, Dacora and Scout Motors. Rivian Rivian is the standout in this group, turning a profit where others have struggled. In the fourth quarter of 2024, the automaker had a gross profit of $170 million. In the first quarter of 2025, a gross profit of $206 million was achieved. Rivian R3 front three quarter view. The Rivian R3 will be smaller and less expensive than the R2. Rivian R3 front three quarter view. The Rivian R3 will be smaller and less expensive than the R2. Rivian "Rivian, despite still experiencing financial growing pains, is on a good path. The recent mid-cycle actions on the R1 models have resulted in truly world class software that actually rivals Chinese efforts," Ed Kim, president and chief analyst at AutoPacific, told Newsweek. Rivian's future was more securely put in place when its joint venture with Volkswagen was announced. VW invested $5.8 billion in Rivian VW Group Technology, LLC to develop an electric vehicle platform and software based on current and future Rivian technologies. "With Amazon as a flagship customer, and a Volkswagen partnership, Rivian is aggressively scaling its EV footprint across delivery fleets and consumer vehicles. But this transition year brings production costs and margin pressure into focus, as competition from legacy automakers intensifies. If successful, Rivian's strategic partnerships and expanding charger network could secure its place as a dominant player — but sustainable profitability remains the most important objective," Tony Salerno, vice president at J.D. Power, told Newsweek. The next major hurdle Rivian looks to clear is the production of its R2 SUV, which is smaller than the established R1 model. With a lower price point and larger market appeal, it could be the home run that the company needs to find even firmer footing. A woman walks on the sidewalk at the Rivian Charging Outpost in Joshua Tree, California. A woman walks on the sidewalk at the Rivian Charging Outpost in Joshua Tree, California. Rivian "Now, Rivian faces its biggest make-or-break moment yet, the introduction of its R2 electric SUV. The R2 will be Rivian's first volume model with pricing expected to start below $50,000, and it's conceived to take Rivian into the mainstream. Plenty of consumers seem to be excited as it will offer all the style and capability of the R1S with a smaller and more manageable size and price tag. The success or failure of R2 will largely determine Rivian's fortunes going forward," Kim said. What Rivian's CEO RJ Scaringe told Newsweek: "As we head into the second half of 2025, there's tremendous amount of momentum as we work towards the launch of R2. I couldn't be more excited for what's ahead, and can't wait for R2 deliveries to start next year." Lucid Motors Lucid Motors started its work on its first car in 2014 and debuted the Lucid Air sedan in 2016. Production of the model commenced in 2021. A year prior, the company showed off an SUV concept that would evolve into the Gravity production model. Deliveries of Gravity began late last year. "Launching a luxury car might be seen as misreading the market, but the Air's lower profile and lighter weight compared to an SUV allowed them to hit that magic 500-mile mark for EV range, which established their technological capabilities. Early reviews on the Gravity are positive, but, like Rivian, they are waiting for their 'Model 3' moment to scale up with their new affordable SUV (and face the same challenges as Rivian in that regard). Their chances of survival are not quite as strong as Rivian but still good," Adam Bernard, founder and principal at AutoPerspectives, told Newsweek. 2025 Lucid Motors Gravity 2025 Lucid Motors Gravity Courtesy of Lucid Motors "Backed by the deep pockets of Saudi Arabia's sovereign wealth fund, Lucid has built some of the most technically advanced luxury EVs on the road. Yet it continues to struggle with sales and profitability targets, putting pressure on execution. The Gravity SUV may offer a much-needed volume boost, but the company's success hinges on continued foreign backing and its ability to navigate current EV market headwinds," Salerno added. The California-based automaker is looking ahead to its next model, Earth, a smaller crossover. "As it prepares to launch its more attainable sub-$50K electric crossover by the end of this year, it - like Rivian - aims to enter the mainstream auto market and utilize its signature Lucid strengths detailed above to make its mark among regular, non-luxury customers," Kim said. Lucid Motors did not reply to a request for comment from Newsweek. Tesla Tesla was early to the electric vehicles (EVs) game and continues to make models that buyers want. The company has struggled as of late between political controversies surrounding the business and its leaders, and the Cybertruck not reaching its perceived potential with customers. But, with its Cybercab robotaxi fleet aimed to come to fruition soon, there's fresh meat on the horizon. "Tesla remains the undisputed heavyweight of the EV industry, with unmatched scale, brand awareness, and a vertically integrated model few can replicate. However, regulatory pressures, intensifying competition, political climate, and a maturing EV market are beginning to challenge its long-held dominance. That being said, Elon is a fierce competitor that should not be underestimated," Salerno said. A rendering of a Tesla Cybercab robotaxi. A rendering of a Tesla Cybercab robotaxi. Tesla Is Tesla a startup? Is it one of America's new legacy automakers (a grouping that usually includes General Motors, Ford Motor Company and Stellantis)? At two decades old, it fits somewhere in between. If it's going to stick around, it needs to weather the current storm and continue to evolve. "This company is no longer a startup. They have plants in three countries and sold more than 1.8 million units last year—twice Subaru's global sales and more than Mazda," Stephanie Brinley, associate director of AutoIntelligence at S&P Global Mobility, told Newsweek. "Tesla's opportunity is still in its EV accomplishments, even with consumer concerns over the CEO's affiliation with U.S. politics, and his other controversial statements. Tesla's sales challenges in the past year or so are more deeply rooted in the impact of inconsistent pricing strategies and aging models than the headlines. "The updates to Model 3 and Y are not enough to get loyal buyers to upgrade or buy for a third time. For new EV buyers, there is much more competition, and most of it looks fresh compared with the older Tesla designs. Delayed products and minimal updates for existing models are fundamental car company problems, and Tesla has them. "The Cybertruck has been polarizing and not met the sales targets Tesla wanted. Even if it turns out to be a miss, a single product miss isn't enough to end most car companies, and it won't end this one," she said. Tesla did not reply to a request for comment from Newsweek. Slate Slate made big headlines this year when it first debuted a peek at its upcoming model in the pages of Newsweek, then again a few weeks later at its formal brand and company launch event. The company plans an American-made truck that converts into a number of other body-style configurations, including an SUV. Slate intends to begin selling the vehicle by the end of next year. Renderings of Slate vehicles modified for perspective consumers. Renderings of Slate vehicles modified for perspective consumers. Slate Kim calls the company's offering, "a true countercultural proposition." He also said: "Many car enthusiasts like to wax poetic about bare bones vehicles of the past, but the reality is that most of today's new vehicle shoppers want amenities. Are there enough people who want a bare-bones DIY electric trucklet to the tune of 150,000 units a year? Slate thinks so and is betting its future on it." Salerno warns that Slate, "...faces some vulnerability if one of the established automakers like Ford shifts the playing field." Brinley sees vulnerabilities elsewhere as well saying, "The Slate also underscores that to get something affordable or inexpensive means giving up features and technology – though there are some buyers who will appreciate that it isn't connected. A two-door pickup formula is easier to engineer and cheaper to build, but U.S. consumers shun two-door pickup trucks for almost anything but work trucks. The two-door configuration will limit sales. Slate is intriguing and will be a great formula for some buyers. But will it be enough buyers for a sustainable business? We'll see." What Slate told Newsweek: "Slate is revolutionizing the build process by simplifying it, allowing us to get to high quality volume production and pass the savings on to our customers. Having a reliable, affordable vehicle may be a life-changing opportunity for those who thought it was impossible." Dacora Dacora is hoping to break into the super high-end market with an electric vehicle that is designed and engineered in the U.S. The company is just beginning to talk about its business and take reservations. "Dacora is still largely unproven publicly, but like any stealth startup, it will need to prove that its idea translates not just to a cool prototype but to a business with staying power. As with many mobility upstarts, the runway is short, and expectations are high," Waatti said. Bernard is equally skeptical: "With Bentley and Ferrari boasting about the profit-generating capabilities of their bespoke services, Dacora is going after a relatively small but valid niche (where Rolls-Royce and Cadillac's Celestiq already play). However, information on the business plan is difficult (or impossible) to find. The website is sparsely populated; buyers interested in dropping $50,000 will have to dig through LinkedIn to find who will be spending their money. They will soon discover many functions aren't represented (yet) and there's not a lot of automotive experience in the existing team. Right now, this seems like a fascinating idea that hasn't been fleshed out enough to know if it will work." Once up and producing, scaling production is key to Dacora's success, even with few orders to execute per year, Salerno said. "Dacora is entering the EV market with a uniquely American, ultra-luxury offering — handcrafted and priced north of $300,000. Its exclusive, retro-inspired design targets an elite clientele, but scaling sustainable profitable production with heavyweight rivals like Rolls-Royce and Bentley presents obstacles." What Dacora told Newsweek: "Dacora truly stands apart. We've fused the rich culture and heritage of ultra-luxury automotive with a powerhouse team — deep technical talent alongside seasoned industry veterans who know what it takes to scale and succeed," said Kristie D'Ambrosio-Correll, co-founder and CEO of Dacora Motors. "The ultra-luxury segment is vastly underserved and offers exceptional unit economics. Our coachbuilding approach reduces upfront capital needs and allows us to rewrite the traditional EV go-to-market playbook. And it's working — pre-orders already represent nearly $40 million in first-year revenue." Scout Motors Last year, Scout publicly revealed plans to bring a Terra truck and Traveler SUV to market in two years. Building on the roots of decades of branding from the mid-1900s, Scout Motors, though a thoroughly American company in terms of product and engineering, is financed under the Volkswagen Group umbrella. The company plans a direct-to-consumer sales model but has been challenged in court by new car dealers over the legality of those plans, something that Salerno notes adds complications to its launch. In the pros column, Kim lists the company's plug-in hybrid powertrain variant as being on track to appeal to customers in ways a fully-electric vehicle does not. And, Scout's manufacturing plant near Columbia, South Carolina, is poised to benefit Volkswagen Group brands in the future as the company looks to regionalize production, he explained. "Having VW support will be critical, in terms of funding but also in terms of expertise and talent. Scout has drawn heavily from Volkswagen Group ranks and been able to poach respected industry veterans from other companies. Scout's plans to use the Rivian architecture via a Rivian-VW joint venture is an illustration of the importance of having a strong parent," Brinley said. "At first blush and on paper, the Scout products look terrific. They are attractive, have plenty of technology delivered in a more familiar setting, and the mix of range-extended electric and battery electric powertrains provide choice." Bernard sees parallels between the history of General Motors and today's Volkswagen Group business plan. "In many ways, Scout is intending to do for SUVs and VW Group what Saturn did for small cars and General Motors; for VW Group, it's a new brand, a new architecture, a new plant, and a new way of selling vehicles. America's continued interest in SUVs may offset lower-than-expected demand for the pickup, and the range extender (which uses a configuration that no other automaker has yet tried) should address concerns over EV demand," Bernard said. There are additional concerns. "Expectations are high, and success hinges on the flawless execution of both product and manufacturing in the U.S.—something VW hasn't always nailed in the past," Waatti said. What Scout Motors told Newsweek: "A storied legacy and a running start combine to create an enduring brand and business built for success. Scout Motors meets the American market by entering the core of the U.S. automotive segments – rugged SUVs and full-size pickup trucks. The Scout Traveler SUV and Terra truck will address roughly 40 percent of the U.S. auto market and will be built in America in a way that combines American entrepreneurship with the backing, scale, and manufacturing know-how of the Volkswagen Group. This enables Scout Motors to deliver upon a competitive cost base and move with speed. Scout Motors meets the American moment by supporting the revitalization of American manufacturing through its multibillion-dollar investment into its Production Center in Blythewood, South Carolina. Spanning 1,100 acres and creating more than 4,000 good-paying jobs, Scout Motors' Production Center will have the capacity to build more than 200,000 Scout vehicles per year when fully ramped up. Construction is on track, and factory hiring will start soon. Across categories, the most successful American brands and products have always had a bit of magic. Scout Motors combines highly credible vehicles with a beloved brand and a passionate community that has kept the scout spirit alive for decades. By combining its product heritage with modern ingenuity while leaning in and listening to the existing Scout community and fans, Scout Motors is unlike any other new automotive entrant. Consumer response to the reveal of the Scout Traveler and Terra is extremely positive. The Harvester range-extender option, connection-focused features like the bench seat, and a return to tactility and utility are resonating with consumers. That enthusiasm is reflected in reservation counts. There's plenty of road ahead as Scout Motors works to bring these incredible vehicles to life and invest in communities and people."
The Citizen
a day ago
- Automotive
- The Citizen
Mercedes-AMG C63 a step closer to dropping four-cylinder PHEV
Latest report confirms previous speculation of the C63 reverting to six-cylinders, also with a plug-in hybrid setup, instead of reviving the V8. Mercedes-AMG is reportedly soon to revert to six-cylinders for the C63. Image: Mercedes-AMG With rumours of its move away from four-cylinders continuing to mount, a senior Mercedes-AMG employee has let slip that the controversial plug-in hybrid (PHEV) powertrain in the C63 will indeed be phased-out based on poor reception and slumping sales. No, yes? First mentioned in 2023 following a report from US publication Car and Driver that the 2.0-litre based unit has received significant backlash despite being powerful than the 4.0-litre bi-turbo V8 it replaced, an AMG figure head stated that adapting the V8 for Euro 7 emissions regulations had already taken place in response to dealers struggling to shift units dramatic prices cuts. ALSO READ: Mercedes-AMG C63 set to go six-cylinder PHEV route in 2026 According to the most recent report by Mercedes-Benz dealers in the United Kingdom have offered discounts of up to £9 500 (R233 386) on the C63, bringing its price tag to £90 095 (R2 213 363) or £17 525 (R430 536) less than the sticker price of the BMW M3 Competition. 'We could have explained it better' Similarly, discounts in the States have also been enforced, with AMG CEO, Michael Schiebe, admitting to MotorTrend last month that it 'could have better explained' the system before putting it into the C63. 'There are pure V8 fans, and it's hard to convince them of this four-cylinder hybrid technology. It's my job to do a constant review of our portfolio. I'm pretty confident that we will fulfil our customers' dreams in the next two to three years,' he said. The combination of the 2.0-litre turbo-petrol engine and plug-in hybrid hardware has main the biggest point of content with the new Mercedes-AMG C63. Image: Mercedes-AMG Despite Mercedes-AMG debunking the hybrid's withdrawal in a response to Germany's Auto Motor und Sport days after the Car and Driver statement, an unnamed executive has admitted to Britain's Autocar that the setup has 'failed to resonate' with buyers. 'Technically, the four-cylinder is one of the most advanced drivetrains available in a production car. It's also right up there on performance. But despite this, it failed to resonate with our traditional customers. We've recognised that,' the source told the publication. In spite of its combined outputs of 500kW/1 020Nm, 125kW/270Nm more than the V8-engined C63, the newcomer' 2 165 kg kerb mass has been cited as another reason for its slump in sales, with recent evaluations in Europe and the States also criticising the battery pack getting hot at over 200 km/h. Return of six In confirmation with the most recent Autocar report in April, the unnamed source said the plug-in hybrid 2.0-litre will give away to a six-cylinder in the reported form of a 3.0-litre plug-in hybrid modelled on the mild-hybrid configuration that powers the AMG CLE 53. Seemingly not earmarked for a return is the 4.0-litre V8, which will produce a reported 478kW/880Nm with mild-hybrid assistance in the forthcoming AMG CLE 63. While no official word from Mercedes-AMG has yet been made confirming the move to back six-cylinders for its flagship C-Class since the supercharged C32 AMG made from 2000 to 2004, expect possible clearer details to emerge throughout the rest of the year. NOW READ: Mercedes-AMG C63 V8 return blasted as German sales tumble
Business Insider
a day ago
- Business
- Business Insider
DeepSeek Hits a Wall as U.S. Chip Ban Chokes Nvidia (NVDA) Supply
Chinese AI firm DeepSeek could be facing major setbacks in developing and releasing its next large language model, known as R2, due to tightening U.S. export controls on Nvidia's (NVDA) most advanced chips. Indeed, according to The Information, the company's current models are heavily optimized for Nvidia's hardware, especially the H20 chip, which was previously the most powerful AI chip legally available to China. However, a new U.S. ban on the H20 has created a supply crunch that is leaving DeepSeek and its partners scrambling for alternatives. As a result, this shortage is expected to slow the adoption of R2, particularly within China, where demand for AI models is growing rapidly. Confident Investing Starts Here: It is worth noting that DeepSeek has not yet set a launch date for R2, as CEO Liang Wenfeng is reportedly unsatisfied with the model's current performance, and engineers are still refining it before release. Internally, the company has been working closely with major Chinese cloud providers by sharing technical specifications to help them prepare for R2 deployment. But the ability of these cloud platforms to meet demand is uncertain, as most customers using DeepSeek's previous model, R1, rely on the now-restricted H20 chips. While companies like Huawei offer domestic alternatives to Nvidia chips, DeepSeek's models are so closely tied to Nvidia's hardware and software ecosystem that switching would significantly reduce performance and efficiency. In fact, R1's success earlier this year led to a surge in orders for H20 chips from tech giants like ByteDance, Alibaba (BABA), and Tencent (TCEHY), who spent $16 billion on 1.2 million chips in early 2025. With no further H20s available, Chinese firms have resorted to using gaming GPUs like the RTX 4090, which are also restricted but more easily accessible on the black market. For now, R2's success may depend on how long China's current H20 supply can hold out. What Is a Good Price for NVDA? Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $175.28 per share implies 12.2% upside potential.
The Hindu
a day ago
- Business
- The Hindu
DeepSeek R2 launch stalled as CEO balks at progress: Report
Chinese AI startup DeepSeek has not yet determined the timing of the release of its R2 model as CEO Liang Wenfeng is not satisfied with its performance, The Information reported on Thursday, citing two people with knowledge of the situation. R2, a successor to DeepSeek's wildly popular R1 reasoning model, was planned for release in May with goals to produce better coding and reason in languages beyond English, Reuters reported earlier this year. Over the past several months, DeepSeek's engineers have been working to refine R2 until Liang gives the green light for release, according to The Information. However, a fast adoption of R2 could be difficult due to a shortage of Nvidia server chips in China as a result of U.S. export regulations, the report said, citing employees of top Chinese cloud firms that offer DeepSeek's models to enterprise customers. A potential surge in demand for R2 would overwhelm Chinese cloud providers, who need advanced Nvidia chips to run AI models, the report said. DeepSeek did not immediately respond to a Reuters request for comment. DeepSeek has been in touch with some Chinese cloud companies, providing them with technical specifications to guide their plans for hosting and distributing the model from their servers, the report said. Among its cloud customers currently using R1, the majority are running the model with Nvidia's H20 chips, The Information said. Fresh export curbs imposed by the Trump administration in April have prevented Nvidia from selling in the Chinese market its H20 chips - the only AI processors it could legally export to the country at the time.
