After Volvo and Toyota recently announced big plans to electrify their fleets, Fiat Chrysler has come around to the idea as well. Tough rules in Europe and better battery technologies are pushing many auto manufacturers to consider moving their fleets over to electrical power. Chester Dawson writes: The push into EVs has been hastened by increasingly stringent regulations globally on fuel-economy standards and tailpipe emissions, along with generous government subsidies. That is prompting more auto makers to offer alternatives to gasoline engines. That trend was highlighted when the U.K. … [Read more...]
Do Electric Cars Threaten the Livelihood of 20 Million Auto Workers?
The FT reports on the threat that the electric car revolution poses to auto workers in the U.S. and Europe. Because electric cars have far fewer moving parts some researchers believe that far fewer people will be needed to make the vehicles and the parts that go into them. The auto industry is fond of saying that if it were a country, it would be one of the world’s largest economies. Its figures show it supports around 7m jobs in the US alone and close to 13m in Europe. Robots may have encroached on the assembly line already, but wait until the beguilingly deceptive electric car takes … [Read more...]
Is the UK Auto Market about to Change Forever?
Under pressure from activists, the UK has been forced to release a plan on dealing with air pollution. As part of that plan Michael Gove, the current environment secretary, has announced that by 2040 the sale of cars running on petrol (gasoline) or diesel will be banned in the UK. Jim Pickard and Peter Campbell write of the plan in the Financial Times: Mr Gove will say that all new cars will have to be fully electric within a quarter of a century. His promise to ban other engine types — including hybrids — shifts the government further from its existing position, which was an “ambition” for … [Read more...]
Are Low Rental Sales Signaling the End of the Auto Boom?
After plunging during the financial crisis, sales of automobiles had been accelerating right up into December 2016. Since then they've tailed off. And now news of userd car prices coming down and rental firms buying fewer new cars to replace their older models implies things could get worse before they get better. This piece of a Wall Street Journal article by Mike Colias and Adrienne Roberts highlights that rental company CEOs are getting nervous about the auto market. Enterprise, one of the leading car-rental firms, reduced its vehicle purchases in the first half of the year compared … [Read more...]
Long-Awaited Tesla Model 3 to Roll Off Assembly Line Friday
Current and aspiring Tesla owners and enthusiasts have long been anticipating the roll-out of the car company's "Model 3." The Model 3 will be Tesla's first mass-produced car, and prices will start at $35,000, aimed squarely at the mid-market. Tesla CEO Elon Musk hopes to ramp up production of the Model 3 to to 500,000 cars in 2018. Things will start slow though, with an anticipated 100 cars produced in August. Neal Boudette reports at The New York Times: Tesla said production of its first midpriced car, the Model 3, would begin on Friday, two weeks earlier than planned, with the first … [Read more...]
Volvo puts Tesla in its Cross Hairs
Tesla shares are on fire, up 65% YTD. Tesla is a story stock. Even more so than the FANGs. Tesla’s investors seem to be convinced that the world is moving toward electrification of the global auto fleet (probably true) and Tesla is going to lead the way and in the process become the most profitable car business the world has ever seen. The latter assumption seems suspect. The auto business is fiercely competitive. The GM’s, Mercedes, BMWs, and as outlined here, Volvos of the world, aren’t going to sit idle. Volvo Cars announced that every model from 2019 onwards would have an electric … [Read more...]
Is the Boom in Global Auto Debt a Looming Crisis?
The boom in U.S. sub-prime auto debt is a looming concern for U.S. regulators, but the problem is apparently not contained to the U.S. The FT reports that borrowing for cars in the U.K. is also booming. The auto debt on bank balance sheets is still small relative to the size of bank assets in the U.S. and U.K., so a systemic crisis probably isn’t something to be overly concerned about today. If you start to see an explosion in CDOs and synthetic CDOs, then you can start to worry. But economists and some in the industry are worried about what is going on under the bonnet of the used car … [Read more...]
Slowing Auto Market Signals Late Cycle Dynamics
Although the current economic expansion has been underwhelming for many industries, the auto market was the exception. The auto market was hit hard in the last recession, but carved out a V-shaped recovery with steady growth for much of the expansion. But change is now afoot. The used car market is over supplied. Used car prices are contracting and growth in new car sales has stalled. General Motors has decided to extend its typical summer factory shutdown to clear bloated inventories. GM’s inventories are almost 44% higher than a year earlier. Slower production in the auto sector is … [Read more...]
Tesla, “Bursting at the Seams,” Will Build New Plant
A new SUV, the Model Y, from Tesla will be built at a new factory, according to Tesla CEO Elon Musk. The Model Y will be built from the ground up on its own platform, rather than sharing a platform with other Tesla vehicles. Musk says he's giving serious consideration to three factories in the U.S., and maybe 10 or 20 globally. Shareholders are eating it up. Tim Higgins reports at the Wall Street Journal: “We actually made a mistake in trying to derive the Model X from the Model S platform,” he said. “It would’ve been better to just design an SUV the way an SUV should be designed. Design a … [Read more...]
Is This Company About to Beat Tesla, Google and Apple to an All-electric Autonomous Car?
Despite the attention and even cult-ish devotion given to Silicon Valley tech companies like Apple and Google, and the unfettered media fascination with every word out of Elon Musk, a company far away from California is preparing to dominate the market for all electric autonomous vehicles. The company has an army of engineers working on its test vehicles. And it is so advanced in its plans for the vehicles it has already begun mass production. And rather than collaborating with another auto-maker or software company, this company is doing all its work in-house. The company is GM. GM … [Read more...]