This week, Lordstown Motors CEO Daniel Ninivaggi took umbrage to a question about leadership at the struggling electric pickup truck maker; competing trucking industry events push green agendas; and a look at the state of aftermarket parts amid the supply chain crisis.
Who’s the alpha male around here?
The final question from Bank of America Securities senior automotive analyst John Murphy to Lordstown Motors Corp. CEO Daniel Ninivaggi on the struggling electric pickup truck maker’s earnings call was a doozy. Murphy, who sometimes takes heat for his annual “Car Wars” assessment of the U.S. automotive pipeline, asked some tough questions on Monday.
Would Ninivaggi’s estimate of $250 million be sufficient to keep LMC afloat for the year? Does LMC have enough time to get environmental and safety approvals to sell its Endurance commercial pickups in Q3? Will the Lordstown (NASDAQ: RIDE) workforce, situated in the labor-friendly Mahoning Valley of northeast Ohio, be unionized?
Then, things got a little personal. The following exchange is edited for space.
Murphy: “In each of these EV startups, there’s traditionally a founder and sort of an alpha person that’s pushing things through and has had a vision for the company. Traditionally, that’s been the founder. We all know it’s a tremendous feat to execute what you’ve done so far, but to really get this over the finish line and viable, it kind of takes sort of one person to really just spearhead this whole thing I mean, who is that?”
Ninivaggi: “Well, John, I’ve known you for 20 years. I’m insulted that you don’t think I’m an alpha man.”
Murphy: “No, I think you’re an alpha male in everything you do, but this is an umbrella that is wide. In these other situations, we have a single person that is truly tasked with everything. And you’ve got a lot of very good players, but I’m just curious how you think about that?”
Ninivaggi: “I’ve been around the industry for a while. I worked for [financier] Carl Icahn for 10 years. I’ve been through challenges. And this is one of the most challenging situations I’ve seen. It’s played out pretty much exactly as I thought it would. I’m maniacal about getting this done. I know what I know, and I know what I don’t know. If you want to know who the alpha male is in this company, you’re talking to him. It’s me.”
Mirror, mirror … who’s the greenest of them all?
Two consequential trucking industry events land on top of each other next week with the NTEA Work Truck Show in Indianapolis and the American Trucking Associations’ Maintenance and Technology Council in Orlando, Florida.
OEMs and suppliers will be out in force at both events, which are pitching electrification as a main theme. Day 1 of the Work Truck Show on Tuesday is dedicated to what has become an annual Green Truck Summit. California Air Resources Board Chair Liane Randolph will deliver the keynote.
In Orlando, Daimler Truck North America CEO John O’Leary is the main speaker, and it’s a good bet he will talk at least in part about the company’s ongoing efforts in Class 8 and Class 6 electric trucks, tailored toward keeping them on the road.
Parts is parts
Sales of aftermarket parts in the U.S. rose about 20% in 2021, well above the 12% bump that Lombard, Illinois-based marketing consultant MacKay & Co. predicted last January. Canada — up 23% — and Mexico — up 24% — did even better.
This was borne out in earnings reports from Rush Enterprises, the nation’s largest chain of truck dealerships, where annual parts, service and body shop revenues were $1.8 billion, up 12.1%. Rush (NASDAQ: RUSHA) also added 150 service technicians in 2021.
In Q4, the Paccar Parts division of OEM Paccar Inc. (NASDAQ: PCAR) posted record revenues of $1.3 billion and record pretax profits of $306 million, up 38% year over year. Annual revenues were $4.9 billion, and annual pretax profit increased by 38% to $1.1 billion.
MacKay said prices were about 6.7% higher last year, in line with rising inflation in the second half of the year. Prices should continue rising but more slowly this year.
The supply chain crisis is still a big deal. MacKay said more than 90% of surveyed dealers and distributors reported problems with availability and delayed deliveries. Yet, 44% are waiting for what they ordered. Twenty percent are substituting another part and 25% are letting their distributor look elsewhere.
Can this be a surprise?
California, which encourages and penalizes companies to transition to electric vehicles, unsurprisingly has a big lead in selling zero-emission vehicles. But the size of the advantage is pretty impressive.
The Golden State has surpassed 1 million plug-in electric cars, pickup trucks, SUVs and motorcycles. That’s more total sales than the next 10 states combined. New data from the nonprofit Veloz show that California, with only 10% of the nation’s cars, accounts for more than 40% of zero-emission cars in the country.
What about heavy-duty trucks? Just wait until the Advanced Clean Truck rule goes into effect in 2024.
Gov. Gavin Newsom: “This milestone is a testament to the success of California’s nation-leading policies and investments to support our bold ZEV goals while driving down costs for all.”
Best of the rest
Embark Trucks is partnering with Alterra Property Group to get industrial outdoor storage sites to serve as transfer points across the U.S. Sun Belt, including key freight hubs like Los Angeles, Dallas and Atlanta. Alterra is one of the largest industrial outdoor storage real estate firms in the country.
Embark (NASDAQ: EMBK) is working with Ryder System Inc. to launch up to 100 transfer points across the U.S., with Ryder (NYSE: R) providing onsite operations, maintenance and fleet management to support coast-to-coast autonomous truck operations. Embark plans to begin commercialization in the Sun Belt in 2024.
Jon Morrison, former head of the Americas for Wabco Holdings before its $7 billion merger with ZF, has signed on as an adviser to autonomous trucking software developer Plus, which will tap him to help with global commercial deployment of its PlusDrive driver-supervised autonomous trucks. After departing Wabco, Morrison started his own consultancy.
The top line at bus, battery and electric infrastructure developer Proterra Inc. looks strong. Not so much the bottom line. Proterra (NASDAQ: PTRA), which went public via SPAC last year, reported Q4 revenue of $68 million, up 26% over the $54 million reported in Q4 2020, Full-year revenue rose 23% to $243 million compared to $197 million a year ago. Both were helped by double-digit percentage growth at Proterra Transit and Proterra Powered & Energy. Proterra’s net loss was $45 million in Q4 2021 compared to a loss of $33 million in Q4 2020.
There was plenty of blame to go around: product mix, higher freight and bus material costs, along with faster-than-expected growth in labor and overhead expenses. Supply chain interruptions didn’t help, nor did COVID-related absences in the workforce.
Hyliion Holdings (NYSE: HYLN) hinted that it had a few more real orders — the kind that come with deposits — to announce after last week’s earnings report included reference to 100 orders placed to secure build slots. Green Path Logistics this week signed on for 50 Hypertruck ERX natural gas-electric extended-range trucks Green Path is the first member of Hyliion’s Hypertruck Innovation Council to order the startup’s powertrain system coming in 2023. Hyliion also has 2,000 nonbinding reservations.
That’s it for this week. Thanks for reading. Click here to get Truck Tech via email on Fridays.
Alan
