Starboard Puts CarMax on Notice, Carvana Goes Hollywood, Lucid's CarPlay Win

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Episode #1291: An activist investor pushes CarMax to overhaul its digital game, Carvana accelerates same-day delivery into Los Angeles, and Lucid rolls out CarPlay and Android Auto updates while resetting its software strategy.

Activist investor Starboard Value is turning up the heat on CarMax's incoming CEO, arguing the used-car giant has plenty of untapped potential, and they've got a $350 million stake to back up that opinion.

• Starboard sent a letter to CEO-elect Keith Barr calling out CarMax for falling short, and pushing for a streamlined online trade-in process and better digital conversion rates.
• The firm wants SG&A expenses capped at 70–75% of gross profit, and believes modest price cuts of $100–$300 per vehicle could restore competitiveness.
• Starboard is also nominating two board members, including its own CEO Jeffrey Smith, signaling this is more than a suggestion.
• Analysts at Truist agree there's room to improve, but warn that gaining ground on Carvana while cutting costs at the same time won't be easy.
• "If CarMax can get its flywheel moving again as Starboard talked about, then I think the stock would be drastically higher than it is today," said Morningstar analyst David Whiston.

Carvana is taking its same-day delivery service to the City of Angels, and if you thought they were already moving fast, Los Angeles is about to find out what that really means.

• Carvana has rolled out same-day vehicle delivery to the Los Angeles metro area, letting eligible customers go from online checkout to driveway delivery in a matter of hours.
• Customers looking to sell can also get same-day pickup or drop-off after completing an online appraisal — making the whole transaction, buy or sell, a same-day affair.
• LA joins Sacramento and San Diego, making California one of the more saturated same-day markets, with Carvana now operating the service across 20 states nationwide.

Lucid Motors is delivering some good news to Gravity SUV owners just in time for its investor day. After a rough few months of software headaches, it's a welcome update.

• • Lucid is pushing a software update to North American Gravity SUV owners Thursday that enables Apple CarPlay and Android Auto, with European and Middle East owners getting it in late March.
  • The features have been available on the Lucid Air sedan for some time, but the Gravity has had a rocky software rollout, significant enough that Lucid's interim CEO issued a public apology to owners.
  • Lucid recently parted ways with several top software leaders and last month laid off 12% of its workforce.

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