Good morning! It’s Friday, February 23, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Stellantis CEO Carlos Tavares Made $39.5M in 2023
I don’t know if you heard, but Stellantis had a bit of a moment last year when its workers walked off the job to strike for better pay and working conditions. The industrial action from the United Auto Workers union lasted around a month, and workers eventually came back when a 25 percent pay rise was agreed to over the next four years. Now, however, it turns out that company bosses are entitled to raises worth more than that, much more in fact.
According to a report from the Detroit Free Press, Stellantis boss Carlos Tavares walked away with earnings of $39.5 million in 2023 after his pay and bonuses were awarded for the year. The pay packed was a whopping 56 percent higher than Tavares received in 2022, as the Free Press reports:
The compensation highlights the company’s financial performance in 2023, which included a net profit of almost $20 billion and a 12.8% adjusted operating income margin that the company noted was “among the best performance of the automotive industry.”
Tavares’ total compensation is not what he was paid directly last year. The figure includes items in addition to his salary and any bonuses, such as retirement benefits. The company said his actual compensation, including “cash and vested equity awards,” was $25.4 million (23.5 million euros).
The $39.5m in earnings that Tavares received in 2023 means that he took home more than 500 times what the average Stellantis employee made last year. In fact, while the big boss’ pay works out to be worth roughly $18,000 per hour, production workers at Stellantis plants in the U.S. now start on $30 per hour under the new UAW contract.
That huge pay pack wasn’t just the CEOs base pay. Instead, as the Free Press reports, it breaks down as a $2.16 million base salary, plus incentives worth $34.5m. In addition, he received post-retirement benefits valued at $2.1 million and other benefits worth more than $650,000.
2nd Gear: The EV Industry Is Being Put Through The Ringer
The electric vehicle industry is giving off a whole load of mixed messages right now. Sure, sales of EVs are continuing to grow around the world, but the rate at which they’re rising isn’t what it once was. On top of that, automakers like GM and Mercedes are delaying EV sales targets and pushing back new models.
Now, a new report from Reuters has outlined the challenges facing the industry in 2024, and it’s no small number. First, the site outlined the factors that are hitting global EV demand, as Reuters explains:
“High interest rates, moderate oil prices, and range anxiety all have conspired against EV demand. The enthusiasm of early adopters of EVs wasn’t representative of the longer-term and broader demand for these vehicles,” said Brian Jacobsen, chief economist at Annex Wealth Management, which does not own shares in any EV makers.
“We expected a reduction in demand and enthusiasm for the vehicles so we didn’t find the valuations compelling,” he added.
Because of this, automakers from established players to fledgling upstarts like Rivian and Lucid have all cut their sales forecasts for this year, and others have even started cutting jobs and production output for certain EV models. As Reuters adds:
The situation was previously flagged by Ford (F.N), opens new tab, General Motors (GM.N), opens new tab and market leader Tesla (TSLA.O), opens new tab, where CEO Elon Musk’s warning in January of the market leader’s slowing pace of growth slashed $80 billion in market value in one day.
But this doesn’t mean the EV market is destined to fail. In fact, just this week it was announced that we were on the brink of a new wave of buyers entering the space after the early adopters. And with Reuters reporting that EV prices are beginning to plummet, they may be coming in at just the right time.
3rd Gear: Carvana ‘Stronger Than Ever,’ Finally Makes Money In 2023
Carvana has had quite the tumultuous few years, after making all kinds of headlines for its shoddy customer service and sales bans in 2022, followed by eye-watering losses at the start of 2023. Now, however, the company appears to have turned over a new leaf and even reports making a profit in 2023.
According to a new report from Automotive News, the online car retailer ended the year with net income worth $450 million, which marked a vast improvement on the $1.59 billion it lost in 2022. The positive result came as the company revealed it takes away roughly $5,000 in profit from every car it sells. As Automotive News reports:
“Carvana is stronger than ever,” CEO Ernie Garcia said in a statement. “We are beginning to demonstrate the differentiated profitability, efficiency and customer experience benefits of our vertically integrated approach, and have a clear path toward our goals of becoming the largest and most profitable automotive retailer and buying and selling millions of cars.”
Shares of Carvana rose nearly 19 percent to $62.21 in after-hours trading Thursday.
Carvana retailed 76,090 used vehicles in the fourth quarter, down 13 percent from the year-earlier period. It reported total gross profit per vehicle of $5,283, up from $2,219 in the year-earlier quarter.
It wasn’t sunshine and roses for Carvana all year, however. The online retailer ended 2023 with losses in Q4, amounting to $114 million after revenue for the period dropped 15 percent. Still, the loss for Q4 2023 was much less than 12 months previously, when the first lost a whopping $806 million.
The company’s improving fortunes come as it dramatically cuts costs and spending. According to Automotive News, Carvana shaved more than $1.1 billion of annualized expenses over the course of 2023.
4th Gear: U.S. Awards $710 Million To EV Projects
While automakers like Mercedes are delaying their pivot to EVs, the U.S. government is finally freeing up funds to encourage startups across the country to ramp up their plans for a battery-powered future.
According to a report from Reuters, the U.S. treasury has handed out more than $700 million in loans to startups looking to clean up the transport sector through new battery tech. The funds have so far been awarded to companies looking to expand their battery production capacity in the U.S. As Reuters reports:
South Korean company SK Siltron CSS is set to receive $544 million to expand a plant in Bay City, Michigan that produces high power silicon carbide wafers used in electric vehicles. Those components are critical EV drivetrains, including inverters, and electrical distribution systems, the department said.
American Battery Solutions separately received conditional approval for a $165.9 million loan to expand its EV battery pack assembly operations in Springboro, Ohio and Lake Orion, Michigan. Both facilities could employ up to 460 people.
The treasury is still sitting on up to $221.8 billion in loan capacity, which Reuters reports ca be used to fund more clean energy projects across the U.S. It’s hoped that funding such initiatives will help create jobs across the country and secure the U.S. supply chain of essential components for future EV production.