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Carvana

From Wikipedia, the free encyclopedia
Not to be confused with Carvanha.

Carvana Co.
Company typePublic
IndustryE-commerce
Founded2012; 12 years ago (2012)
Founders
Headquarters
Tempe, Arizona
,
U.S.
Area served
United States
Key people
Ernest Garcia III (chairman & CEO)
ProductsUsed cars
RevenueDecrease US$10.8 billion (2023)
Increase US$450 million (2023)
Total assetsDecrease US$7.07 billion (2023)
Total equityIncrease US$243 million (2023)
Number of employees
c. 13,700 (2023)
Websitecarvana.com
Footnotes / references
[1]

Carvana Co. is an online used car retailer based in Tempe, Arizona.[2] The company was the fastest growing online used car dealer in the United States and is known for its multi-story glass tower car vending machines.[3][4][5] Carvana was named to the 2021 Fortune 500 list, one of the youngest companies to be added to the list.[6]


History

[edit]
Ernest Garcia III, CEO and co-founder of Carvana

Carvana was founded by Ernest Garcia III, Ryan Keeton and Ben Huston in 2012. The company's initial funding round came from the used car retailer and finance company DriveTime.[7] A year later Carvana opened its first iteration of a car vending machine. In 2015, a fully automated, commemorative coin-operated version of the signature car vending machine opened in Nashville, Tennessee.[4] Carvana currently operates over 30 vehicle vending machines in the US.[8]

In April 2017, the company went public and began trading on the New York Stock Exchange under the symbol CVNA.[9] Also in the same year Carvana acquired rival automotive startup Calypso to enhance vehicle data and analytical tools[10] and in this same year Carvana's co-founders were included in Fortune’s 40 Under 40 list in 2017.[11] The following year Carvana spent $22 million to acquire Mark Cuban-backed Car360 for its smartphone technology for taking vehicle photos with 3D computer vision, machine learning, and augmented reality.[12][13] In 2022, Carvana acquired ADESA, the nation’s second-largest wholesale auto auction chain, for $2.2 billion to increase its real estate footprint. [14]

In response to the COVID-19 pandemic, Carvana introduced touchless delivery and pick-up in March 2020.[15] In Q2 for that year, the company reported a 25% increase in vehicle sales, as a result of physical dealership sellers being closed as a consequence of the COVID-19 pandemic. Carvana had a gross revenue of $1.12 billion, up 13% for April–June 2020.[16] Throughout that year Carvana sold 244,111 vehicles and posted annual revenue of $5.587 billion, making it the second largest online used-car retailer in the U.S.[17] As of November 2023, Carvana's as-soon-as-next-day delivery was available in 300+ markets nationwide.[18] During the COVID-19 pandemic, Carvana's market value surged when consumers turned to vehicle online marketplaces.[19]

In August 2023, Carvana introduced same-day delivery for customers purchasing or selling a vehicle,[20] the service is currently available in Alabama,[21] Arizona, Indiana, North Carolina, Georgia, Dallas-Fort Worth, and Central Florida. [22]

In May 2022, The Wall Street Journal reported that Carvana had to lay off 12% of its staff (2,500 employees)[23] after falling short of growth expectations. Carvana stock was 90% off its 52-week stock price as interest in the company collapsed.[19] On November 4, 2022, Carvana's stock price dropped around 40% following its poor third-quarter financial results. The total number of used vehicles sold declined by 8% to 102,570. Analysts blamed rising borrowing costs and elevated used-car prices.[24][25]

In February 2024, CNBC reported Carvana had spent the last 18 months restructuring its operations and debt given concerns about potential bankruptcy. As part of the shift from growth to cost cutting, the company lowered its headcount by more than 4,000 people, removed $1.1 billion of annualized expenses out of operations; released a new proprietary software called Carli that would allow for end-to-end processing of vehicle reconditioning and other tasks that were previously manual; built specific tools for inbound and outbound logistics activities like mapping, route optimization, and driver schedule management; and introducing new tools that employed generative artificial intelligence for some tasks.[26]

Regulatory history

[edit]
Vehicles not picked up at the vending machine are delivered by a flatbed truck
Outside of the Atlanta car vending machine

In August 2021, Carvana's Raleigh vending machine was issued a temporary ban by regulators in North Carolina due to its failure to properly conduct inspections and provide vehicle titles to customers as required by state law. Carvana continued business in Raleigh from other sites in the area and the vending machine was allowed to resume business in January 2022.[27]

For two weeks from May 10, 2022 through May 25, 2022, Illinois suspended Carvana's business license due to customer complaints, effectively banning the company from conducting business in the state. The Office of the Secretary of State of Illinois stated that the company had failed to provide titles to buyers for the vehicles they had purchased within 20 days, as required by Illinois law, and in some cases had illegally issued temporary registrations from other states to customers in Illinois.[28] The state lifted the suspension on May 26, 2022, after imposing strict guidelines on the company's operations. On July 18, 2022, the Secretary of State's office announced that Carvana's suspension was reimposed after finding that company continued to engage in illegal conduct.[29][30] Paul Breaux, Vice President for Carvana, was charged with multiple misdemeanor and petty offenses due to the Illinois issues.[31] On July 29, 2022, Carvana won a temporary injunction against Illinois to resume business in the state and the Illinois Secretary of State was banned from 'suspending or revoking' the company’s certificates of authority and dealer plates.[32]

Similar issues have been faced in other states, including Pennsylvania, where a class action lawsuit has been filed alleging that the company violated the state's Unfair and Deceptive Trade Practices Act by failing to properly transfer ownership to buyers, a matter in which Carvana denies any liability.[27][33]

On October 7, 2022,[34] the Michigan Secretary of State suspended the license for the Carvana dealership in Novi for "immediate harm to the public" due to violations of the Michigan Vehicle Code.[35] Before the October 2022 suspension, the state had conducted an investigation in February 2021 that led to Carvana agreeing to be placed under probation in May 2021 and admitting violations. Additional violations occurred during the probation period, and Carvana agreed to a six-month extension of the probation period in February 2022.[35][36] Despite the suspension, the Novi location continued to operate the following week.[34]

To advance the digital car buying experience and protect vehicle home deliveries, Carvana has championed legislation in Illinois, Iowa and Oregon. [37] [38] [39]

Sponsorships

[edit]

Carvana is a sponsor of the USL Championship's Phoenix Rising Football Club since 2018,[40] and 7-time NASCAR Cup Series championship driver Jimmie Johnson since 2021.[41]

In December 2023, Carvana announced its kit sponsorship for the Chicago Fire FC Franchise of Major League Soccer (MLS). [42]

References

[edit]
  1. ^ "Carvana Co. 2023 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. February 22, 2024.
  2. ^ Ringle, Hayley (July 7, 2017). "EXCLUSIVE: See inside Carvana's new Tempe headquarters". Phoenix Business Journal. Retrieved November 15, 2021.
  3. ^ Light, Larry (April 27, 2020). "After The Quarantines, We May All Sell And Buy Used Cars The Carvana Way". Forbes. Retrieved November 15, 2021.
  4. ^ a b Lekach, Sasha (March 21, 2019). "Pick up your used car at Carvana's newest car-sized vending machine". Mashable. Retrieved October 31, 2019.
  5. ^ Light, Larry (April 27, 2020). "After The Quarantines, We May All Sell And Buy Used Cars The Carvana Way". Forbes. Retrieved July 26, 2021.
  6. ^ Gull McElroy, Nicole (June 2, 2021). "How did Carvana make it onto the Fortune 500? Unconventional values—and car vending machines". Fortune. Retrieved July 26, 2021.
  7. ^ "Amendment No 2 to S-1/A". Carvana via SEC Edgar. April 17, 2017.
  8. ^ Rodreiguez Ortiz, Omar (August 17, 2023). "A car vending machine? How can buyers use a new gimmicky landmark off I-95 in Hollywood". Miami Herald. Retrieved October 10, 2023.
  9. ^ Korosec, Kirsten. "The 'Amazon of Cars' Has Filed For An IPO". Fortune. No. March 31, 2017. Retrieved July 26, 2021.
  10. ^ "The Amazon Of Cars Just Made Its First Acquisition". Fortune. Retrieved April 16, 2019.
  11. ^ "40 Under 40". Fortune. 2017. Retrieved October 10, 2023.
  12. ^ "Carvana acquires Car360 for $22M to improve its car-buying platform". TechCrunch. Retrieved April 16, 2019. Car360 uses 3D computer vision, machine learning and AR tech to improve images taken of vehicles through a smartphone.
  13. ^ Huddleston, Tom (January 8, 2019). "Mark Cuban says this is Shark Tank's 'No. 1 success story' after start-up sells for $22 million". CNBC. Retrieved September 10, 2019. In April 2018, Carvana acquired Car360, the company Francois, 47, launched in 2015 that uses augmented reality technology and 3-D computer vision to allow people to take 360-degree photos of automobiles with a mobile phone.
  14. ^ Owusu, Tony (February 25, 2022). "Carvana Steps Out of Digital, to Acquire Adesa Auction House for $2.2B". Retrieved November 30, 2023.
  15. ^ "Carvana moves to touchless delivery for online car sales". Payments Dive. March 26, 2020. Retrieved July 26, 2021.
  16. ^ Naughton, Nora (August 10, 2020). "Growth in Online Shopping and Used Cars Lifts Carvana, Attracts Competition". The Wall Street Journal. Retrieved August 10, 2020.
  17. ^ "Q4 2020 Shareholder letter" (PDF). Retrieved March 11, 2021.
  18. ^ "Carvana Launches in Wichita With As-Soon-As-Next Day Vehicle Delivery". Yahoo!. June 30, 2021. Retrieved July 26, 2021.
  19. ^ a b Foldy, Ben (May 10, 2022). "Carvana Plans to Lay Off 12% of Workforce as It Closes Expansion Deal". The Wall Street Journal. Retrieved May 11, 2022.
  20. ^ Berthiaume, Dan (August 23, 2023). "Carvana rolls out same-day delivery". Chain Store Age. Retrieved November 30, 2023.
  21. ^ "Revolutionizing Auto Retail: Carvana Launches Same-Day Delivery in Birmingham". automotivenewnow.com. Retrieved January 24, 2024.
  22. ^ "Carvana Launches Same-Day Delivery in Central Florida". AutobodyNews.com. November 29, 2023. Retrieved November 30, 2023.
  23. ^ Weiss, Elias (May 10, 2022). "Without Warning, Carvana Lays Off 2,500 in Phoenix". Phoenix New Times. Retrieved May 12, 2022.
  24. ^ Lee, Jinjoo (November 4, 2022). "Carvana's Rose-Tinted Windshield Is Dangerous". The Wall Street Journal.
  25. ^ Patrick, Margot (November 4, 2022). "Carvana Stock Falls on Sales Decline". The Wall Street Journal.
  26. ^ Wayland, Michael (February 2, 2024). "A year after bankruptcy concerns, Carvana is leaner and ready for its Wall Street redemption". CNBC. Retrieved February 6, 2024.
  27. ^ a b Hyatt, John. "Carvana's 'Chaotic' Zoom Firing Caps Company's Struggles Amid Market Downturn". Forbes. Retrieved June 30, 2022.
  28. ^ Wallace, Danielle (May 17, 2022). "Carvana banned from doing business in Illinois over registration, title issues". FOXBusiness. Retrieved June 30, 2022.
  29. ^ "Carvana License Suspended Again In 2 Months In Illinois". NASDAQ. July 20, 2022. Retrieved July 20, 2022.
  30. ^ Matthews, Brad (July 20, 2022). "Illinois cracks down on Carvana for second time over out-of-state registration permits". The Washington Times. Retrieved July 20, 2022.
  31. ^ Carvana Allowed to Buy, Sell Cars in Illinois While Defending Legal Challenges NBC 5 Chicago (WMAQ)
  32. ^ Moore, C.J. (August 1, 2022). "Carvana wins temporary injunction against Illinois, can resume business in state for now". Automotive News. Retrieved October 10, 2023.
  33. ^ Adelman, Jacob. "Carvana Sought to Disrupt Auto Sales. It Delivered Undriveable Cars". barrons.com. Retrieved June 30, 2022.
  34. ^ a b Carvana dismisses state's demand to cease operations, calls regulations 'outdated' WXYZ-TV
  35. ^ a b "Michigan suspends Novi car dealership Carvana's license citing 'imminent harm' to public". Detroit Free Press. Retrieved October 11, 2022.
  36. ^ ‘Baseless and reckless’: Suspended Novi car dealership fires back at Michigan Secretary of State Click on Detroit
  37. ^ "Carvana-backed vehicle home delivery bill signed into law in Illinois". Automotive Remarketing. August 30, 2023. Retrieved November 30, 2023.
  38. ^ "Iowa Passes Remote Vehicle Sales Law". Used Car News. May 1, 2023. Retrieved November 30, 2023.
  39. ^ "HB 3080 Enrolled". Oregon State Legislature. Retrieved November 30, 2023.
  40. ^ "Phoenix Rising FC reveals 2018 uniforms, announces new sponsor". Arizona Sports. March 11, 2018. Retrieved April 16, 2019.
  41. ^ "Jimmie Johnson announces Carvana as sponsor for IndyCar venture with Ganassi". NBC Sports. October 21, 2020. Retrieved October 30, 2020.
  42. ^ Donaldson, Alex (December 13, 2023). "Chicago Fire announce Carvana kit sponsorship, Houston partners with Eleven". SportCal. Retrieved December 15, 2023.
[edit]
Wikimedia Commons has media related to Carvana.
  • Official website
  • Business data for Carvana Co.:
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