Carvana Lost More Than $800 Million in the Last Quarter of 2022

The online used-vehicle retailer reported revenue of $2.8 billion in the fourth quarter, down 24 percent compared with the same period a year earlier. For all of 2022, Carvana reported revenue of $13.6 billion, up 6.2 percent from 2021.

The Tempe, Ariz., company sold 86,977 vehicles in the fourth quarter of 2022, down 23 percent. The profit it made per vehicle retailed tumbled 51 percent to $2,219, down $2,347 from the fourth-quarter 2021 figure.

For the full year, Carvana sold 412,296 vehicles, down 3.0 percent from 2021. Its yearly per-vehicle profit was $3,022, down $1,515 from 2021.

“From a short-term perspective, it was clearly a very difficult year,” Carvana CEO Ernie Garcia and CFO Mark Jenkins wrote in a letter to shareholders. “After eight consecutive years of annual improvement, it was the first year we stepped back on the key metrics of retail units sold, total GPU, net income margin and adjusted EBITDA margin.”

Chief Executive Markus Duesmann said that a decision had not yet been made but that the IRA made it far more attractive to build electric vehicles (EVs) in the United States. Duesmann made the comments in an interview with Frankfurter Allgemeine Zeitung, which were later confirmed by the company.

Asked whether Audi would build a plant itself or do so together with other Volkswagen brands, Duesmann said: “Both are possible. But the probability that we do it within the group is high.”

Carmakers have in recent years moved to reduce export and imports across major markets like the United States, China and Europe and instead localise production and supply chains to reduce transport and logistics costs.

Volkswagen Group (VOWG_p.DE) will build its own production plant in the United States for its new Scout brand rather than collaborating with a partner, industry publication Automobilwoche reported on Friday, citing company sources.

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Automobilwoche had reported in November that the carmaker was in talks with Foxconn (2317.TW), which has expanded into building electric vehicles (EVs) for auto brands, and Magna International subsidiary Magna Steyr (MG.TO) about building a joint plant.

Building its own plant was the least likely option, the publication reported at the time, also citing company sources.

Volkswagen is expanding its existing U.S. plant in Chattanooga, Tennessee, to produce the ID. Buzz. However, the Scout brand will build off-road electric pick-up trucks and SUVs that require a new platform and the Chattanooga plant does not have enough space to do it all, a source told Reuters last May.

Musk has battled with the SEC over his social media posts since he tweeted in 2018 that funding was secured to take Tesla private. That prompted the regulator to sue, claiming Musk and Tesla had misled shareholders. Both settled with the SEC, each paying $20 million and agreeing that Musk’s Tesla-related tweets would be reviewed by a lawyer — often referred to as a Twitter sitter — before he posts them.

The judge handling the SEC case has refused to let Musk out of the deal, prompting the Tesla CEO to appeal to the 2nd US Circuit Court of Appeals.

Musk’s lawyer argued to the appeals court that the San Francisco verdict confirms that Musk’s tweets didn’t violate securities laws. Investors had sued Musk over the “funding secured” tweet, claiming he defrauded them. A federal jury took just two hours to clear him, sending shares of the electric car maker surging.

That verdict is irrelevant, the SEC said in response Thursday. Musk forfeited his chance to test the SEC’s claims at trial when he twice voluntarily agreed to settle, according to the filing.

“Even if the verdict were somehow relevant, Musk reads too much into it,” the SEC said. The settlement “was not conditioned upon the outcome of the private litigation,” lawyers for the agency added. “The Commission had no role in that case.”

Musk’s lawyer, Alex Spiro, didn’t immediately respond to an email sent late Thursday seeking comment on the SEC filing.

In a Feb. 24 letter to shareholders from Hyundai Chief Executive Jaehoon Chang, the company said recent audits at 29 of its direct suppliers across Alabama made it confident they are “now in full compliance with underage labor laws.”

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One of the plants where children worked, SMART Alabama LLC in rural Luverne, Alabama, is a direct Hyundai subsidiary. According to Hyundai’s financial statements from last year, the automaker controls a 72% stake in SMART.

Chang wrote that Hyundai was “in the process of divesting its ownership interest in SMART” but it would ensure “that the economically important jobs in the Luverne, Alabama community are preserved.”

Hyundai’s letter did not say when the transaction would be completed or identify a buyer or the form a divestiture would take. Since the early 2000s, the metal stamping plant has made chassis parts for hundreds of thousands of Hyundai vehicles per year.