Here Elon Musk talks about what happens when he spends more time in the conference room than on the factory floor. Musk recently announced his move to Texas from California. He's not alone. Originally posted on Your Survival Guy. … [Read more...]
Will the Transition to Electric Vehicles Hit Auto Dealerships Profits?
About 150 U.S. Cadillac dealerships are exiting the brand rather than making the investments Cadillac is requiring to sell electric vehicles. If electric vehicles are the future of transportation as we are told, auto dealerships may suffer. While the vast majority of sales at auto dealerships come from new and used cars, about half of gross profits come from the service and parts department. The problem for auto dealerships is that according to Consumer Reports, electric vehicles cost about half as much to maintain as internal combustion engine vehicles. Few businesses would be able to … [Read more...]
Driverless Car Rollout Will Take Years and Billions of Dollars
The Wall Street Journal's Stephen Wilmot explains the time and capital it will take to make driverless cars a reality. He writes: Driverless cars are moving out of science fiction and onto U.S. roads. But this is just the start of a long journey before they fulfill their transformative potential. Signs of very early-stage commercialization are emerging from the corporate science projects that want to remove human drivers from vehicles. Alphabet’s Waymo seems furthest ahead with its “robotaxi” project in the suburbs of Phoenix. Customers used to have to sign a nondisclosure agreement to … [Read more...]
S&P 500 Index Funds Double Down on Bubble Stocks
Tesla is being added to the S&P 500. Measured by market value, Tesla is the largest car company in the world and the 10th largest company in the United States. It is also the most expensive car company in the United States by a factor of almost 25 times when measured relative to sales. General Motors trades at .52X sales, Ford at .27X, and Tesla at 13.3X sales. Even if you assume Tesla can double sales by 2023, the stock is still about 12X as expensive as General Motors. Despite the astronomical valuation, funds that track the S&P 500 will make Tesla a top ten holding. Doesn’t … [Read more...]
Detroit Fights Back Against Auto Tech Upstarts
GM is hiring thousands of new tech employees to fight back against Silicon Valley upstarts who are trying to erode Detroit's dominance of the auto industry. Christina Rogers reports for The Wall Street Journal: General Motors Co. GM 5.36% plans to hire 3,000 new workers to bolster its engineering and software-development expertise, the latest auto maker to bulk up on tech talent as competition with Silicon Valley intensifies for the future automobile. GM said Monday the hiring will start now and continue through the first quarter of next year, focusing mostly on filling positions in … [Read more...]
European Auto Consumers Don’t Want What their Governments Are Selling
Like drivers in the U.S., Europeans prefer SUVs over tiny cars with no speed or cargo space. Those understandable preferences though are bumping up against strict goals the EU has set for lowering automobile-generated emissions of CO2. William Boston and Andrew Barnett report for The Wall Street Journal, writing: In the early years of Europe’s effort to curb emissions, manufacturers were able to rely on growing engine efficiency as well as regulatory exemptions and loopholes to cut emissions. But as the goal became more demanding, pressure rose to develop new technologies, especially electric … [Read more...]
Nikola Founder’s Exit a Reminder of How Manias Can End
The mania in electric vehicle stocks has been nothing short of spectacular in 2020. Tesla has become the 7th largest company in the United States based on the anticipation of what might be many years in the future. Nikola, an electric-truck startup that doesn’t yet produce anything, was larger than Ford Motor Company for a few weeks over the summer. Manias are like wild parties. Both are a blast while they last, but the hangover you wake up to makes you swear you’ll never do that again. William Boston and Ben Foldy report in The Wall Street … [Read more...]
Ford’s Existential Project
The Ford F-150 is the second-highest grossing branded product in the world. It is second only to the iPhone. Ford did $42 billion in sales of the F-150 in 2019. Morgan Stanley has estimated that the F-150 may be responsible for 90% of Ford’s total global profit. Ford and GM own the light-duty truck market in the U.S., but new competitors are emerging. Electric vehicle drive trains are all the rage in the stock market today. Not so much in the actual market for trucks just yet, but that may change. If it does, Ford and GM will have to stay on top to survive. Ford understands the stakes if … [Read more...]
Competition is Heating up for Electric Vehicles
Tesla is getting a new competitor. Barron's Al Root reports on the new EV offering by Lucid Motors, the Lucid Air. The Air is build to compete with Tesla's Model S sedan and claims some pretty impressive specifications. Root writes: The new EV is a luxury sedan like the Tesla (ticker: TSLA) Model S. It’s the Lucid Air from Lucid Motors, a privately held EV maker. The Air made its debut in Silicon Valley Wednesday evening. “Lucid Motors is driven to make the electric car better, and by doing so, help move the entire industry forward, toward accelerated adoption of sustainable mobility,” … [Read more...]
The 1 Million Mile Battery
Tesla is rumored to be coming out with a 1 million mile battery that will be announced in September. Is this a game-changer for Tesla? Well no, there are other firms coming out with the same type of technology. They just aren’t as promotional or don’t have the same cult-like following as Tesla. The Economist has the details. Producers are now, though, planning to go much further than that, with the launch of “million mile” (1.6m kilometre) batteries. Zeng Yuqun, the boss of Contemporary Amperex Technology, a giant Chinese firm which produces batteries for a number of carmakers, said in … [Read more...]
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