Carvana is presently forbidden from selling cars in the land of Lincoln, Rivian is suing its seat supplier and Tesla’s closing the order books for a vehicle it was supposed to start manufacturing six months ago. All that and more in The Morning Shift for Tuesday, May 17, 2022.
1st Gear: Carvana
As adept as Carvana has proven itself at vertically stacking cars, it’s falling short in the transfer-of-ownership portion of its used car buying experience — which some would argue is the most important part of that experience. Complaints from customers in multiple states, usually around failing to provide titles and sometimes even telling customers to drive on a series of expired out-of-state temporary tags, have finally caught up with the company. Its dealer license in Illinois has been suspended, and the state’s Secretary of State Police department say there’s no ETA for the startup to get it back. From Automotive News:
Illinois Secretary of State Police temporarily blocked Carvana’s dealer license on May 10 because the company failed to properly transfer titles for vehicles it sold and misused issuing out-of-state temporary registration permits, said Henry Haupt, an Illinois Secretary of State spokesman.
The Secretary of State’s police department opened an investigation into consumer complaints about Carvana in February, Haupt told Automotive News. The investigation spans about 90 signed complaints, Haupt said. He said he couldn’t provide an exact date as to when Carvana might see the suspension lifted.
Carvana will need to “resolve the issues at hand” before that can happen, Haupt said.
This is nothing new for Carvana, it should be mentioned. The company lost its license in North Carolina for 180 days last summer. It also nearly lost it in Florida, but managed to work through its backlog of title applications at the eleventh hour, before a January 31 deadline. I know the used car market still sucks and we’re starved for choice and reasonable prices, but maybe don’t buy from Carvana until it changes everything about the way it conducts business. If it changes anything.
2nd Gear: NADA Pushes for Catalytic Converter Theft Law
The National Automobile Dealers Association has had enough of the ongoing scourge of catalytic converter thefts that have cost “millions of dollars to businesses.” Oh, and they’re peeved for the owners, too. They’re pushing Congress to move forward with legislation that would have converters VIN-stamped, enforce new restrictions on purchases and codify new penalties for theft. From Automotive News:
In a letter sent Monday to Democratic and Republican leadership on the House Energy and Commerce Committee, the groups asked the committee to hold a hearing on legislation known as the Preventing Auto Recycling Theft (PART) Act and to support the measure.
“These thefts are costing millions of dollars to businesses and vehicle owners alike,” the groups wrote in a letter to Reps. Frank Pallone, the committee’s chairman, and Cathy McMorris Rodgers, the GOP ranking member. “In addition, replacing a catalytic converter is costly and often difficult due to the part’s skyrocketing demand and supply chain shortages.”
Other groups that signed the letter include the National Independent Automobile Dealers Association, American Car Rental Association, American Truck Dealers, American Trucking Associations, National Insurance Crime Bureau and National RV Dealers Association.
In the U.S., catalytic converters are being stolen at increasingly higher rates because they contain costly precious metals such as platinum, palladium and rhodium, and are not easily traceable.
Catalytic converters can also be removed from vehicles in under a minute, if you know what you’re doing. According to data from State Farm, converter theft rose 293 percent nationwide during the period between July 2020 and 2021. It’s also estimated claims to insurance companies rose from 3,389 in 2019 to 14,433 in 2020. I imagine insurers would also love to see this bill become law.
3rd Gear: Rivian Wants its Seats
Rivian’s been going through it lately, and its latest headwinds come courtesy of the company that supplies the seats for its Amazon delivery vans. From Bloomberg:
Rivian Automotive Inc. fell almost 7% Monday on word the electric-vehicle startup is in a dispute with a key seat supplier that could jeopardize its delivery van contract with patron Amazon.com Inc.
Rivian alleged in a lawsuit that Commercial Vehicle Group Inc., a New Albany, Ohio-based auto parts manufacturer, threatened to stop supplying seats unless the carmaker agreed to pay “approximately twice the agreed-upon price,” according to a copy of the complaint.
Shares of Rivian fell 6.9% Monday to close at $24.86 and are down 76% so far this year. Commercial Vehicle dropped 2.4% to $6.45.
Back in March, Rivian said it had “fewer than 100 seat packages left” for vans yet to be built, and that Commercial Vehicle Group wouldn’t even allow it to order more. Rivian has a contract for 100,000 battery-electric vans from Amazon, 10,000 of which are due to be delivered before 2022 is through. Amazon invested more than $1.3 billion in Rivian last year, representing 18 percent of the company, and lost $7.6 billion on that stake.
4th Gear: No More Cybertrucks Outside North America
Tesla’s polygonal pickup can now be ordered in the U.S., Canada and Mexico only, per Reuters.
U.S. electric vehicle manufacturer Tesla Inc has stopped taking orders for its upcoming Cybertruck pickup truck outside of North America, according to its official website.
The automaker is only taking reservations for the Cybertruck in the United States, Canada and Mexico, the website showed.
Tesla declined to comment on the matter.
Chief Executive Elon Musk has said Tesla would start production of the Cybertruck next year at its plant in Austin, Texas.
Last week at Financial Times’ summit, Musk said Tesla has more orders for Cybertrucks than it “could possibly fulfill for three years after the start of production” — signaling that maybe it should put a pause on all new orders, not just ones from other continents. It’s unclear what the regional distribution of Cybertruck orders are, because frankly everything pertaining to the Cybertruck is unclear. All we know is what we can see, and what we saw most recently of the pickup at Tesla’s Cyber Rodeo event in April was a lot of panel gaps.
5th Gear: Lyric Owners, Take Your Pick
You get either free public charging for two years or a credit toward the installation of a Level 2 home charger with your new Lyriq, General Motors has announced. From Automotive News:
Cadillac will give all Lyriq buyers either two years of unlimited public charging credits at EVgo charging stations or a credit up to $1,500 toward home charger installation through Qmerit. Either a Level 2 charger or a 240-volt outlet are eligible for the home-charging credit, Cadillac said.
“This unique offer will elevate our customers’ experience with the Lyriq, helping them make a smoother, more transparent transition to all-electric driving,” said [Global Cadillac Vice President Rory] Harvey. “Like the Lyriq itself, the charging experience will set the standard for customers’ EV experiences.”
An at-home Level 2 charger can add up to 52 miles of range per hour of charge, and a DC public fast charger can add 76 miles of range in about 10 minutes, Cadillac said.
At-home chargers and their installation can vary wildly in price; for an idea of the range, check out this Cars.com story that highlights how expensive it can get depending on the property, energy infrastructure and how nice a homeowner wants the setup to look. It could be $1,700 if you situate the charger right next to the fuse box on the side of your house, or it could be almost $7,000 if you have to run conduit to a garage far away. $1,500 is a nice chunk of change that should put a serious dent for most customers’ needs, but two years of free charging on the go is nice, too — especially if energy prices continue to rise. Which would you take?
Reverse: Remembering Scott Brayton
On this day 26 years ago, the pole sitter for the 1996 Indianapolis 500 died following an accident in practice for the race. He was 40 years old. From 365 Days of Motoring:
IndyCar veteran Scott Brayton (40) won pole position for the 1996 Indianapolis 500 but was killed after a tyre deflation caused his car to crash into a retaining wall during a practice run at the Indianapolis Motor Speedway. He became the 40th driver to be killed at the sports’ most famous race track.
A quote from team owner John Menard, out of the May 18, 1996 edition of the New York Times:
“Scotty just loved this place,” said John Menard, the owner of Brayton’s car. “He loved running fast here. He loved the competition. He was so proud he had the pole.
“It reminds you this is a very serious business we’re involved in. Scotty had a perfect race car, a perfect day and a perfect track, and yet it reached out and bit him.”
Neutral: Have you Purchased From an Online Used car Startup?
Two friends of mine bought Volkswagen Alltracks off Vroom in 2020. One waited an additional week for delivery but the experience was otherwise fine, while the other’s arrived with a missing hubcap. Those seem like small potatoes compared to some of these Carvana stories.