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Lidar maker Luminar Technologies, stung by a recent Goldman Sachs downgrade, is outlining where it believes the analyst missed the mark.
Luminar’s shares have fallen about 16% since the downgrade.
Luminar CFO Tom Fennimore defended the company’s premium pricing and revenue projections.

A Mercedes-Benz van retrofitted with different types of lidar systems, including Luminar’s Iris, to showcase the differences in the technologies.
Michael Wayland / CNBC

Lidar maker Luminar Technologies, stung by a recent Wall Street downgrade, is responding in an unusual way: taking its case directly to the shareholders.
In a letter seen by CNBC on Friday morning, Luminar CFO Tom Fennimore – himself a former Goldman Sachs managing director – takes issue with arguments made in a bearish note by Goldman analyst Mark Delaney earlier this week.

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Delaney on Tuesday afternoon cut Goldman’s rating on Luminar to sell, from hold, arguing that its shares are overpriced relative to key competitors and that Luminar’s own pricing assumptions are unrealistically high.
Luminar’s shares have fallen about 16% since Delaney’s note was published.
“We continue to see Luminar as one of a handful of leaders in the very competitive lidar industry,” Delaney wrote. “However, we see downside to the company’s margin outlook with the company targeting revenue per vehicle of ~$1k which we believe implies ASPs [average selling prices] roughly 50-100% higher than key competitors.”
Simply put, while Delaney acknowledges that Luminar is one of only a few lidar makers winning deals with major automakers, he thinks that Luminar won’t be able to get the prices it’s hoping to get from those automakers. And based on 2025 revenue assumptions, he sees Luminar trading at four times the valuation of competitors Innoviz and Hesai, both of which have also won business from automakers.   
Fennimore argues that Delaney missed two key points.

“One, our tech is better, and people typically pay a premium for tech, but to us this isn’t a theoretical exercise: This is pricing that we actually have in place,” Fennimore told CNBC in an interview on Friday morning.
Fennimore’s letter points out that Luminar has already signed contracts to provide hardware and software for over 20 upcoming new vehicles from major automakers including Volvo, Polestar, Mercedes-Benz and Chinese auto giant SAIC Motor. Those contracts lock in pricing through the life of those upcoming models, he said.
“‘Premium pricing’ isn’t a theoretical concept we are forecasting, but an achievement we have already made in our major customer contracts,” Fennimore wrote in the shareholder letter.
And the second point Fennimore says Goldman missed: The time frame Delaney chose to compare Luminar’s valuation against those of its rivals.
“We believe using 2025 revenue as a valuation benchmark versus peers dramatically undervalues Luminar, as many of the 20+ vehicle lines we have been awarded are not expected to reach production until beyond 2025,” he wrote.
Put another way, some of the big contracts that Luminar has already signed won’t generate significant revenue until those vehicles launch in the second half of the decade, Fennimore said.
The decision to take the rebuttal directly to Luminar’s shareholders is unusual, but Fennimore believes it’s warranted – and he hinted that Luminar might choose to send more letters like this in the future.
“Whenever anybody raises valid and thoughtful concerns about us, we want to respond with valid and thoughtful facts,” Fennimore told CNBC. “Because I think the capital markets rely on having a good and factual debate.”

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Ford’s new plant being constructed outside Memphis, Tennessee, will be capable of building 500,000 electric vehicles annually at full production, the company said Friday.
The first and only product to be announced thus far for the plant is a next-generation electric truck, which Ford has code-named “T3,” short for “TrustTheTruck.”
Ford and battery supplier SK On are investing $5.6 billion in BlueOval City, which is on track to begin production in 2025, Ford said Friday.

Ford’s BlueOval City electric vehicle and battery manufacturing campus in West Tennessee is scheduled to begin production in 2025. It will be home to Ford’s second-generation electric truck, code named Project T3, and will be capable of producing 500,000 EV trucks a year at full production.

Ford Motor’s new plant being constructed outside Memphis, Tennessee, will be capable of building 500,000 electric vehicles annually at full production, the company said Friday.
The first and only product to be announced thus far for the “BlueOval City” plant is a next-generation electric truck, which Ford has code-named “T3,” short for “TrustTheTruck.”

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“Project T3 is a once in-a-lifetime opportunity to revolutionize America’s truck,” Ford CEO Jim Farley said Friday in a release. “It will be a platform for endless innovation and capability.”
Additional products using Ford’s next-generation EV architecture could be produced alongside the truck, however a company spokesman declined to comment on future product plans for the plant.
Ford and South Korea-based battery supplier SK On are investing $5.6 billion in the BlueOval City campus, including a large battery cell plant. Production at the plants is on track to begin in 2025, Ford said Friday.
BlueOval City is a key part of Ford’s plans to be capable of producing 2 million EVs in 2026, which is also the target for the company’s Model e EV business to achieve an 8% EBIT profit margin.
Ford on Thursday for the first time detailed its finances for business units including EVs, which lost $2.1 billion last year and are expected to lose as much as $3 billion in 2023.

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The LA home features a Kobe Bryant-themed basketball court, car showroom and a 70-foot infinity pool that appears to float some 45 feet above the mountainside, and it’s on sale for a reduced price of $38 million.
If it doesn’t sell by April 1, the property would be subject to a looming new, local mansion tax, which goes into effect next month and could cost the owner a further $2 million.
The ULA tax was designed to “fund affordable housing projects and provide resources to tenants at risk of homelessness” and it’s levied upon a seller of any real property that trades for $5 million or more.

The owner of this over-the-top, seven-bedroom and 11-bath mansion in Los Angeles is prepared to accept $6 million less than what he paid for it less than two years ago — all to beat a ticking clock.
The home features a Kobe Bryant-themed basketball court, car showroom and a 70-foot infinity pool that appears to float some 45 feet above the mountainside, and it’s on sale for a reduced price of $38 million.

If it doesn’t sell by April 1, the property would be subject to a looming new, local mansion tax, which goes into effect next month and could cost the owner a further $2 million.

The grand living area opens to the outdoors with 22 foot ceilings, a 10-ft long fireplace, and a giant wall covered in living green moss that extends across three levels of the home.
EstateLuxShoot

The Brentwood estate, now known as the Star Resort, was built by veteran spec developer Ramtin Ray Nosrati, who sold it back in 2021 for $44 million. According to public records, the almost 16,700-square-foot residence was purchased by the trust of wealthy investor Jeffrey Feinberg, who runs Feinberg Investments. 
About a year after buying it, Feinberg put the home back on the market for $48 million but couldn’t find any takers. Feinberg brought in David Malka of Ikon Advisors to implement a more aggressive pricing strategy, and the original asking price was chopped down $10 million, or almost 21%. To put that price cut into perspective, it amounts to the home dropping almost $64,000 in value every single week for 94 weeks straight since Feinberg bought it.

One wall of the dining room is a 1,000 gallon salt water aquarium with views into the kitchen on the other side.
Yann Ippolito

Malka told CNBC yearly real estate taxes on the Star Resort run his client around $550,000 a year, plus about $20,000 a month in utilities.
“Plus, the staff and so on, so probably a million dollars of expenses [per year],” Malka said.

Jutting out from the lowest level of the home is a Kobe-Bryant-themed half basketball court.
EstateLuxShoot

Trying to unload an expensive mansion in the midst of a banking crisis with the LA real estate market softening and uncertainty looming large isn’t exactly great timing. 
Feinberg, like all luxury mansion sellers in LA, is also contending with the new mansion tax approved by voters in November. The ULA tax, as it’s called, was designed to “fund affordable housing projects and provide resources to tenants at risk of homelessness,” according to the city of Los Angeles website.
It’s levied on the seller as a transfer tax upon the sale of a home, or any real property, that trades for $5 million or more.

The home’s impressive foyer includes double height ceilings and glass walls that open to the pool deck and outdoor bar.
Yann Ippolito

For homes priced between $5 million and $10 million, sellers will have to pay the city 4% of the total sale price. For real estate trading north of $10 million, the rate increases to 5.5%.
The new tax is on top of the city’s current 0.45% transfer tax. And it’s levied based on sale price, not profit, which means sellers will have to pay up even if they’re already taking a loss, as could be the case with the Star Resort.
The city’s website includes a tax calculator, which estimates ULA and city transfer taxes owed on a $38 million deal at $2,261,000, or just under 6% of the total deal.

The primary bedroom is accented by a recessed wood-panel covered ceiling and walls of glass that slide away for access to a private terrace.
EstateLuxShoot

For many high-end home sellers and their agents, the race is on to lock in profits and close on a sale before the new tax takes effect. But for Malka, who wouldn’t discuss his client by name with CNBC, the pressure is on to get the best price and rein in his client’s losses before the new tax takes them even higher.
“That’s why we decided to give a good price cut and send a signal to the market that my seller is motivated to sell and that he wants to move on,” said Malka, who still holds out hope he can broker a deal before the first of the month.

A bar, billiards table and 250-bottle wine cellar on the home’s lowest level.
Yann Ippolito

“It’s crazy,” said real estate broker Aaron Kirman of AKG/Christies International. “People had a four-month window from the day [the new tax] passed to sell a house.”
Kirman, who is one of LA’s top-producing luxury real estate brokers, does not represent the Star Resort, but he does have many clients who are also in a big rush to sell.
It’s a trend, he said, that’s reflected in LA’s Multiple Listing Service (MLS), which according to Kirman shows 86 homes with sale prices over $5 million currently in escrow.

A glass wall in the lower lounge offers a view into a sleek car gallery.
Yann Ippolito

“The tax is coming out at a complicated time with interest rates, inflation and bank issues,” Kirman told CNBC. “It couldn’t have been more of a perfect storm.” 
The ULA tax, he said, “has led to dramatic price reductions on many homes.”
Potential homebuyers are swooping in with all-cash offers, and the promise of a fast-closing deal, Kirman said, but at deep discounts.

The Star Resort’s main bar is clad in stone and accented with back lit onyx.
Yann Ippolito

The Star Resort’s backyard includes a an outdoor kitchen & bar, infinity pool and lounge areas.
EstateLuxShoot

Jonathan Miller, president of the real estate appraisal firm Miller Samuel, told CNBC it will be hard to project the impact of the tax on any one piece of real estate, but he does have a prediction across the region: “It ultimately lowers achievable prices as compared to the period before April 1 and becomes baked into market expectations in the future.”
In other words, the new tax will create a downward pressure on homes over $5 million as owners anticipate the future cost of higher tax bills.

One of the residence’s seven ensuite bedrooms with a private terrace.
Yann Ippolito 

CNBC asked Miller to crunch market data to see how much sellers of luxury single-family homes in LA would have paid in 2022 if the mansion tax were already in effect. Last year, sales of $5 million-plus totaled almost $2.5 billion.
According to his calculations, all of those sellers combined would have racked up a mansion tax bill of almost $131 million. Sellers of homes trading between $5 million and $10 million would have seen an average tax bill of $43,000, according to Miller’s estimates, and sellers of $10 million-and-up homes would have footed an average bill of $1.2 million.
It’s important to note Miller’s analysis focused exclusively on single-family home sales over the price threshold. According to the city’s projections, which include commercial and multifamily sales, the new tax could generate between $600 million and $1.1 billion annually.

The night view from the pools hot tub.
Yann Ippolito 

According to Miller, the rush to sell before the April 1 deadline matches a similar frenzy in New York four years ago.
“When New York implemented the mansion tax in 2019, there was a surge in closings just short of the July 1 start date and a void of sales in the following months,” he said.

Home cinema with Rolls-Royce inspired star lit ceiling.
Yann Ippolito

The primary bedroom’s terrace includes a fire feature and views of the pool below.
EstateLuxShoot

Kirman said even with the tax pressures, one thing will remain the same: “The house is worth what the buyer is willing to pay for it.”
And if that amount is over $5 million, there will be some new taxes to pay on it.

The Star Resort’s sport simulation room offers virtual golf, hockey and soccer.
EstateLuxShoot

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Young moviegoers don’t mind paying extra fees to see films on the big screen, if it means they get to sit in the best seats in the house, a new survey says.
Morning Consult’s survey of moviegoers comes in the wake of AMC Entertainment announcing its plans to eliminate the one-price-fits-all approach to selling tickets.
Not all moviegoers or cinema chains are on board with a sweeping change to the movie theater ticket pricing.

Group of cheerful people laughing while watching movie in cinema.
Zoran Zeremski | Istock | Getty Images

Young moviegoers don’t mind paying extra fees to see films on the big screen, if it means they get to sit in the best seats in the house, a new survey says.
The survey, from Morning Consult, found that 54% of Gen Z ticket buyers and 46% of millennials found dynamic pricing, a strategy seen in the concert space that charges more for the most desirable seats in a venue, “appropriate” at movie theater chains.

Only 32% of Gen X respondents and 22% of baby boomers felt the same, according to the survey, which was conducted last week. Morning Consult polled more than 2,200 U.S. adults.
The report comes nearly two months after AMC Entertainment announced its plans to introduce “Sightline at AMC,” which will eliminate the one-price-fits-all approach to selling tickets. For example, moviegoers who want to sit in the middle of the auditorium would pay a few dollars more and those who choose the front row would pay a few dollars less.
The initiative, which faced initial backlash from consumers, is expected to roll out nationwide by the end of the year.
Representatives from AMC did not immediately respond to CNBC’s request for comment.
“Our data is showing that more than half of Americans have skepticism towards seat-based pricing,” said Saleah Blancaflor, media and entertainment reporter at Morning Consult. “But it also shows that younger generations, such as Gen Zers and millennials, are interested in heading to the theaters regardless of if they have to pay a few extra dollars to get those better seats.”

Blancaflor said these younger consumers are “extremely eager” about the entertainment they consume and are the ones buying the majority of concert tickets, which also have dynamic pricing. In both generations, more than 50% of respondents said they’d be willing to pay a few extra dollars for preferred seats.
Meanwhile, only 36% of Gen X and 25% of baby boomers said they would be willing to pay extra.
However, she noted that while the data could give other cinema chains confidence in altering their pricing, these younger generations do have financial concerns and may balk if it becomes the norm. She also said that movie theaters shouldn’t disregard older generations, who have returned to cinemas in the wake of the pandemic for films such as “A Man Called Otto” and “80 for Brady.”
“While catering towards younger generations is important to the future of moviegoing, they also shouldn’t completely ignore the older generations,” Blancaflor said. “Because they could be missing out on people in those groups that still have an interest in going to theaters but might not be open to these newer initiatives that might be unfamiliar to them.”
Already, cinema chains such as Alamo Drafthouse have said they do not plan to implement dynamic pricing in their theaters.
“We could put more rows in our theaters and we don’t,” Shelli Taylor, CEO of Alamo Drafthouse, told CNBC last month. “We purposely sit in every single chair and we look for the most optimal sightlines. So, our front rows are awesome; there’s no reason for us to discount them.”

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Ouster is on track to realize over $75 million in annual savings, as promised, following its merger with rival lidar maker Velodyne.
The company expects revenues to grow significantly in 2023, following the merger and as it ramps up several new products.
For its fourth quarter, the lidar company reported a loss of 23 cents per share on revenue of $11 million.

The New York Stock Exchange welcomes Ouster Inc. (NYSE: OUST), today, Friday, March 12, 2021, in celebration of its Initial Listing. To honor the occasion, Ouster CEO Angus Pacala, joined by Chris Taylor, Vice President, NYSE Listings and Services, rings The Opening Bell®.

Lidar maker Ouster said on Thursday that it remains on track to realize more than $75 million in annual cost savings by the end of 2023, following its merger with rival Velodyne in February.
CEO Angus Pacala told CNBC in an interview following the company’s fourth-quarter report that Ouster has already begun integrating Velodyne’s people and technology into its existing business, cutting about 200 employees from the post-merger business.

Ouster is on track to achieve about $50 million of the promised $75 million in annualized cost savings by the end of the first quarter, he said, based on the two companies’ standalone costs as of the third quarter of 2022.
For its fourth quarter, which reflects Ouster’s results before the merger with Velodyne was completed, the company reported a loss of 23 cents per share on revenue of $11 million. That’s compared with a loss per share of 17 cents on revenue of $11.9 million during the same period a year ago.
For the full year, Ouster reported $41 million in revenue with a 27% gross margin, in line with its previous guidance to investors. The company shipped over 8,600 lidar sensors in 2022 – but it reported a net loss of about $139 million, or 70 cents per share, for the full year.
Shares were down about 9% in after-market trading on Thursday.
Pacala said that he would encourage Ouster’s investors to look ahead.

“We also booked $70 million in business in 2022,” he said. “And I think that number alone is a very strong indication of how this business is going. We’re carrying a large amount of backlog into this year.”
Lidar, short for “light detection and ranging,” is a sensor technology that uses invisible infrared lasers to create a detailed 3D image of the sensor’s surroundings. Ouster’s lidar units and software are tailored for several industry verticals, including automotive applications, industrial machinery, robotics and “smart infrastructure,” in which sensors and data help to manage energy networks, public water-supply systems, and even traffic signals in urban settings.
Ouster shipped over 2,900 lidar sensors in the fourth quarter, up 23% from a year ago. But its gross margins, a measure of its progress toward profitability, fell to 17% in the fourth quarter from 30% in the year-ago period. Pacala said that discounts on some large-volume sales to existing customers hurt its gross margin during the period, as did spending to ramp up production of Ouster’s new REV7 sensor platform, which launched in October.
Pacala said that early customer feedback on the REV7 has been “incredibly positive” and that while the spending to launch the new platform hurt the company’s fourth-quarter results, he expects that it will pay dividends as 2023 unfolds.
As of year-end, Ouster and Velodyne had a combined cash balance of about $315 million. The combined company expects to generate $15 million to $17 million in revenue in the first quarter, not counting the revenue that Velodyne generated before the merger was completed on Feb. 10.
Ouster hasn’t yet said when it will release its first-quarter results.

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A former fugitive in the securities fraud case involving a New Jersey deli company once valued at $100 million renounced his U.S. citizenship in 2019, prosecutors revealed.
Peter Coker Jr. “poses a serious risk of flight,” prosecutors said as they asked a federal judge to deny him bail two months after he was arrested in Thailand.
The Hong Kong businessman, his father and a third defendant are accused of a scheme to artifically boost the stock prices of two companies, Hometown International and E-Waste.
Hometown International owned just one small, money-losing deli in Paulsboro, New Jersey, at the time.

Peter Coker Jr., left, is issued search warrants from police at his villa on the southern resort island of Phuket, Thailand, Jan. 11, 2023.
Crime Suppression Division, Royal Thai Police | AP

NEWARK, N.J. – A former fugitive in the securities fraud case involving a New Jersey deli company once valued at $100 million renounced his U.S. citizenship in 2019, prosecutors revealed Thursday as they asked a judge to deny him bail.
Peter Coker Jr. “poses a serious risk of flight, and … there are no conditions or combination thereof that can assure his appearance at future proceedings,” said the letter by the U.S. Attorney’s Office to federal Magistrate Judge Edward Kiel.

In the same letter, prosecutors said Coker Jr. had “stood to make tens of millions of dollars” from a hoped-for reverse merger of the deli company, which the goal of the “complex, long-term fraud’ spanning at least seven years that grossly inflated its stock price.
“And the only reason that the Defendant and his co-conspirators were unable to achieve their ultimate objective of entering into a reverse merger, which would have allowed for a massive payout, was because of negative news articles that exposed their fraud,” the letter to Kiel said.
CNBC in 2021 published several dozen articles that exposed eyebrow-raising consulting agreements, troubled legal histories, and other issues related to people connected to the deli company.
In their own filing Thursday, Coker Jr.’s defense said the Hong Kong businessman relinquished American citizenship “primarily for economic reasons and in recognition of his personal and professional life.”

Immigration snag

Coker Jr., who was extradited from Thailand last week and kept in jail since then, was scheduled to appear in Newark federal court on Thursday afternoon for a detention hearing in the case, where his father Peter Coker Sr. and a third man also are charged.

But he was never brought from a holding area to the courtroom, where his parents were waiting.
Instead, there was a two-hour delay in the start of the hearing that ensued after the judge, a prosecutor and Coker Jr.’s defense lawyers for the first time learned that there is a hold on him from the U.S. Immigration and Customs Enforcement agency.
Such a detainer is standard when a non-citizen is extradited to face criminal charges in the U.S.
During the delay, Coker Jr.’s lawyers met with him and talked to the prosecutor.

Peter Coker Sr. and his wife Susan Coker at U.S. District Court in Newark, New Jersey, March 15, 2023.
Dan Mangan | CNBC

Kiel eventually took the bench and began the hearing. Coker Jr.’s lawyers told him told the judge that they will seek an attorney to represent him in connection with the ICE detainer.
The ICE hold, which was lodged when Coker Jr. landed at JFK International Airport in New York last week, could keep Coker Jr. in jail even if he is granted bail in the criminal case.
In their letter seeking Coker Jr.’s detention, prosecutors cited his access to funds overseas, his citizenship from another country, his three decades living abroad in Hong Kong, and the 20-year maximum possible criminal sentence he faces if convicted as reasons to fear he will flee the charges.
“No evidence is more telling than a defendant’s own words,” prosecutors wrote.
They cited Coker Jr.’s legal statement on June 5, 2019, saying, “While I was born and raised in the U.S., I moved to Hong Kong in July, 1992 for career reasons and have established my roots and extensive social and family ties here. I have no intention to return to live or work in the U.S., and have therefore decided to renounce my U.S. nationality.”
Attorneys for Coker Jr. at his arraignment last week argued he was willing to put up all the money he has, about $4 million, and his parents’ North Carolina home as collateral to secure his release on bond in the case.

Shell game

Coker Jr., Coker Sr. and James Patten were charged in an indictment on Sept. 26 with a scheme artificially boost the prices of publicly traded stocks of Hometown International, and a related shell company, E-Waste, to increase their attractiveness as merger partners for private companies.
While the elder Coker and Patten were arrested in North Carolina and then released on bonds of $100,000 each, Coker Jr. was a fugitive for months before being found and arrested in a resort area of Thailand by police there in January.
Coker Jr. had traveled there on a passport from the Caribbean island of St. Kitts and Nevis, where he has citizenship.
In their own letter to Kiel on Thursday, Coker Jr.’s attorneys argued he remained in Phuket, Thailand, after learning of his indictment because he was too sick to travel.
Coker Jr. claimed he was receiving medical attention for cirrhosis of his liver and hypoxemia prior to his arrest.
“Mr. Coker’s appearance in the United States would have likely occurred sooner if not for serious health issues he faced in the period following the unsealing of the indictment against him,” his attorneys argued in the filing.
“Mr. Coker prioritized seeking medical treatment in his local community of Thailand rather than immediately surrendering to authorities and risking the possibility that he would be transported by plane to the United States against his doctor’s advice.”

Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC

The indictment alleges that as a result of the scheme, the stock price of Hometown, which owned only a small, money-losing shop dubbed Your Hometown Deli, rose more than 900% as a result of the alleged scheme. E-Waste’s shares skyrocketed by almost 20,000%. The deli, which served Italian subs and cheesesteaks in Paulsboro, a small New Jersey town across the Delaware River from Philadelphia, has since closed.
Both companies publicly disavowed their massive market valuations after CNBC revealed legal issues surrounding people connected to the companies, including Coker Sr.
The younger Coker served for some time as Hometown International’s chairman.
Gabrielle Fonrouge reported from Newark and Dan Mangan reported from Englewood Cliffs, N.J.

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Ford on Thursday forecast a drastic turnaround for its electric vehicle unit, reiterating that it expects its EV business to be solidly profitable by the end of 2026.
Here, step by step, is how Ford expects Model e to get to a positive 8% EBIT profit margin in under four years.
Wall Street analysts are still skeptical, with one calling the 8% target “especially optimistic.”

John Lawler, Chief Financial Officer of Ford, rings the opening bell at the New York Stock Exchange (NYSE), March 23, 2023.
Brendan McDermid | Reuters

Ford Motor disclosed Thursday that its electric vehicle unit, called Ford Model e, lost $2.1 billion in 2022 — and could lose as much as $3 billion in 2023.
But the company also forecast a drastic turnaround, reiterating that it expects its EV business to be solidly profitable by the end of 2026. So how will it pull that off?

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The automaker’s answer started with a single slide it presented during a “teach-in” for analysts and investors in New York on Thursday.
On an earnings before interest and tax, or EBIT, basis, Ford Model e had a profit margin of roughly negative 40% in 2022, it said. Ford is targeting a positive EBIT margin of 8% for the unit by the end of 2026.
“We’re already seeing green shoots of the improvements in the profitability of Model e,” Ford CFO John Lawler said Thursday during the investor event. “From a contribution margin perspective, we expect Model e to approach breakeven at the end of this year, and, in 2024, we believe our first generation products can be EBIT margin positive.”

But Model e as a whole won’t be profitable for a while yet, Lawler said, because of the heavy investments Ford will be making to scale up production and roll out more new EV models. Here, step by step, is how Lawler said Ford expects Model e to get to a positive 8% EBIT profit margin in under four years:

Scale. Simply put, building more EVs and allowing the supply chain to mature will yield greater economies of scale. Ford expects to have the capacity to build EVs at a rate of 2 million per year by the end of 2026. That alone will provide roughly 20 points of margin improvement, according to Ford’s projections.
Design and Engineering. Lawler said Ford is “obsessing over energy efficient designs because they will allow us to significantly reduce the battery size and cost.” He said such designs will lead to “ultra-high simplicity of manufacturing and platforms that maximize commonality and reuse,” which will yield another 15 points of margin improvement.
Battery. While costs have come down, batteries are still the most expensive part of an EV, especially if the automaker is buying them from third-party manufacturers, as Ford has been. To make matters worse, or at least more costly, Ford’s EVs have so far used relatively expensive lithium-ion cells, rather than the cheaper lithium iron phosphate, or LFP, cells used by Tesla in its less expensive models. Ford’s plan to bring those costs down further centers on bringing battery-cell manufacturing in house, either directly or via joint ventures with battery makers. In addition, it will soon begin offering LFP as a lower-cost option on some of its EVs — starting later this year with cells bought from Chinese battery giant CATL, and from a new Michigan factory that will come online in 2026. As those efforts scale up, Ford expects to gain another 10 points of margin improvement.
Other. Ford also expects to find incremental gains by selling software and services, such as driver-assistance system BlueCruise, to EV owners, via benefits in the Inflation Reduction Act, via improvements in raw materials costs, and with other tweaks here and there. But pricing — specifically, the need to stay competitive with a fast-growing number of EV rivals — may offset all of that to some extent. Ford thinks the upshot will be about 3 points of margin gain, just enough to bring it to that targeted positive 8% by the end of 2026 — if all goes according to plan.

Not all of those margin gains will take years to materialize. Lawler said that Ford thinks it can still reduce the costs of making its current first-generation EVs — the Mustang Mach-E crossover, F-150 Lightning pickup and E-Transit van — by incorporating lessons it’s learning as it engineers its second-generation models, which are due to launch over the next few years.

Despite the considerable detail that Ford provided Thursday, some Wall Street analysts are still skeptical that Ford can achieve an 8% EBIT margin on EVs by 2026.
“We believe investors are likely to remain skeptical on the path to appropriate margins, especially amid inflationary headwinds and price declines,” Barclays’ Dan Levy said in a note following the event.
Wells Fargo analyst Colin Langan shared similar thoughts in an investor note Thursday morning: “It’s unclear how Ford expects to get to its 8% 2026 target margin for Model e” as long as sales expectations remain the same.
Part of that near-term help may come from the Inflation Reduction Act, which provides company-level credits for making batteries and vehicles in North America, as Ford plans to do with the EVs it sells here. But as Deutsche Bank analyst Emmanuel Rosner pointed out Thursday, Ford’s 8% margin goal was announced “well before IRA.” That means any benefit realized from the legislation should be in addition to that goal, he said in an investor note during Ford’s presentation.
Rosner, prior to Thursday’s event, called the 8% margin target “especially optimistic” when compared with crosstown rival General Motors, which is only targeting low- to mid-single digit margins on its EV business by 2026, excluding any IRA benefits.
Lawler said the company will provide more details on Model e’s path to profitability during Ford’s annual capital markets day on May 22.
“We are laser-focused on building an industry leading portfolio of highly differentiated EVs that inspire our customers and play to Ford’s strengths in pickup trucks, vans and SUVs,” Lawler said.

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Apple plans to spend $1 billion a year on theatrical releases, according to a new report.
Cinema stocks like IMAX and AMC jumped on the news.
The investment is part of the tech company’s efforts to raise its profile in Hollywood and lure subscribers to Apple TV+.

Moviegoers line up at the AMC Loews Lincoln Square box office on March 05, 2021 in New York City.
Michael Loccisano | Getty Images

Cinema stocks jumped Thursday after a report said Apple plans to spend $1 billion a year on theatrical film releases.
The investment is part of the tech company’s efforts to raise its profile in Hollywood and lure subscribers to its streaming service, Apple TV+, Bloomberg reported, citing people familiar with the matter.

Typically, Apple has released films directly to its streaming platform or allowed limited runs in a small number of theaters for Academy Award eligibility. Apple recently won best picture for its film “CODA.”
The commitment to longer theatrical releases is a way for the company to appease talent, who want their projects on the big screen, and drum up awareness for its streaming platform, which is estimated to have between 20 million and 40 million users, much smaller than rivals Netflix and Disney+.
Cinemark jumped as much as 10% on the news, while IMAX and AMC rose about 4% and 5%, respectively. They gave up some of their gains later Thursday but all finished positive for the day.
Apple didn’t immediately respond to a request for comment.
Amazon made a similar commitment last November, promising to make between 12 and 15 movies for movie theaters each year.

Bloomberg’s report indicated that Martin Scorsese’s crime thriller “Killers of the Flower Moon,” Matthew Vaughn’s spy movie “Argylle” and Ridley Scott’s historical epic “Napoleon” are on the short list for these longer theatrical runs. No plans have been finalized, but these releases could remain in cinemas for at least a month. Last year, Apple TV+ became the first streaming service to win the Academy Award for best picture, with “Coda.”
In the wake of the pandemic, distributors shortened the theatrical release window to 45 days from from around 90 days. Some studios have deals with cinema chains that allow for shorter runs based on ticket sales. Then there are others, like Paramount and Skydance’s “Top Gun: Maverick,” which remained in theaters long after the 45-day time period.
Already, 2023 is expected to be a stronger year at the domestic box office, as production levels returned to normal in 2022, but word of Apple’s additional film commitments gives the industry another confidence boost.
–CNBC’s Kif Leswing contributed to this report.

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