A lot’s happened in the last few weeks – from Lotus going public, to Ford’s Q4 earning report falling short of investor and internal expectations, to Polestar surpassing benchmarks of its own. So grab a mug of your favorite brew and settle in; it’s time for your end-of-month morning carfee. 

UK Automaker Lotus Goes Public, Announces IPO

For decades, Lotus has been a household name among UK automakers. Known for its sports and racing cars, the brand has become infamous for its fine-handling, lightweight supercars. In late March 2022, Lotus broke from tradition by revealing the Lotus Eletre, a fully electric performance SUV. The Eletre’s an impressive vehicle – it’s also a sign of Lotus’ desire to enter a broader market. Speaking to Top Gear in April 2022, Matt Windle (Executive Director of Engineering at Lotus) stated, “if you want Lotus sportscars to be around forever, we’ve got to make money… we haven’t been making money in the past, and that’s why we haven’t been able to invest in product.”

Looking back on such statements, Lotus’ recent announcement that its EV division would merge with L Catterton Asia Acquisition Corporation hardly comes as a surprise. The new combined company has an estimated enterprise value of $5.4 billion, and will keep the name Lotus Technology Inc. Moreover, Lotus owner Geely and other current Lotus shareholders will retain an estimated 89.7% majority share of the company. When it goes public, Lotus stock will list on the NASDAQ under the ticker symbol “LOT.” 

Picture of a sports car like  a Lotus overlooking a sunset.

How Will Going Public Affect Lotus?

As of now, it’s hard to say. L Catterton, the acquisition group acquiring Lotus, is a combined effort created by Catterton, a renowned private equity firm, LVMH, a premium product manufacturer, and Groupe Arnault, the family holding company of Bernard Arnault (Chief Executive Officer at LVMH). 

The LVMH Group is known worldwide for producing luxury, premium products, including wines, fashion goods, perfumes, jewelry, and more. Lotus has always been an exclusive brand, and a merger with an acquisition corp closely affiliated with a large luxury goods brand means that commitment to quality is likely here to stay. Going public could help Lotus fund its desired expansion into new makes and models, allowing the automaker to develop other vehicles similar to the Eletre and branch out as a “lifestyle” brand more easily. 

Ford Q4 Earnings Fall Short of Internal, Investor Expectations

On February 2nd, Ford announced its fourth-quarter earnings. CEO Jim Farley also stated that the company expected more headwinds in 2023, contradicting more positive reports from other automakers such as GM. 

Recently, we wrote about how the dissolution of Argo AI, a self-driving research firm, ate into Ford’s profits – the company took a $2.7 billion hit. Ford’s fourth quarter wasn’t a positive turnaround – Ford fell 100,000 vehicles short of sales expectations and made almost a billion less in profit than it forecasted at the end of the third quarter. The automaker’s net income also fell to $1.3 billion, down from $12.3 billion in the same period during 2021. On a more positive note, Ford’s Q4 revenue climbed to $44 billion (up from $37.7 billion the year prior) and reported $2.6 billion in pretax earnings, up from $2.0 billion. 

Picture of a Ford driving along a coastline.

In addition to supply chain issues, such as the microchip shortage that’s plagued automakers throughout 2022, Ford identified a need to improve its internal operations and cut costs more aggressively. In a public statement, Ford CEO Jim Farley said that the company “should have done much better last year… we left about $2 billion in profits on the table that were within our control.” On an analyst call, Farley also said that Ford has “deeply entrenched issues in our industrial system… this has been humbling for both me and my team.” Farley also stated that “everything’s on the table” regarding how the company would reduce expenses, stating that Ford was particularly focused on cutting manufacturing and supply chain expenses. 

Polestar Beats Global Volumes Target, Rivian to Lay off 6% of Workforce

Let’s round out this end-of-month auto news retrospective with a look at the EV sector. 

Bad news first: Rivian CEO RJ Scaringe recently sent an email to employees stating that the company would lay off 6% of its workforce (around 840 employees) to conserve cash. The company, which went public in late 2021, has seen its shares lose almost 90% of their value since IPO, and reported $5 billion in losses throughout the first three quarters of 2022. Rivian also announced that it fell short of its production target of 25,000 vehicles for 2022. At the end of September, Rivian had around $13.8 billion left in cash to fund its ventures. 

Picture of an EV charging at a charging station.

The announcement of employee layoffs comes after Tesla slashed prices across its inventory, prompting other EV automakers to respond in kind – Ford immediately dropped the tag on its Mustang Mach-E. As EV automakers prepare for a price war in 2023, many are searching for ways to cut costs and lower prices without losing profit. 

One EV automaker that posted better-than-expected results was Polestar. The company announced that it surpassed its global volumes target of 50,000 vehicles, and is heading into 2023 with an optimistic outlook. Polestar CEO Thomas Ingenlath stated that he’s “confident that we will continue to actively manage our supply chain to meet the growing demand for Polestar 2, commence first deliveries of Polestar 3 and launch Polestar 4. 

That rounds out this January 2023 end-of-month auto news roundup! In the automarket for more news and car care tips? Stay tuned!

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