Listen to “AD #2765 – Tesla's Stock Sent Soaring; U.S. January Sales Better Than Expected; GM Starting Origin AV Production in 2022” on Spreaker.
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Runtime: 8:23
* At time we recorded this show Tesla’s stock was at $780 a share, but it is now up to $900 a share. *
0:07 1st Gigafactory Profit Sends Tesla’s Stock Soaring
1:07 Tesla’s Market Cap Hits $140 Billion
1:43 U.S. January Sales Better Than Expected
2:27 U.S. Incentives Down, ATPs Up
3:32 Hyundai to Halt Most Production in South Korea
3:57 Toyota Develops Marine Fuel Cell System
4:52 Kia Teases All-New Sorento
5:40 GM to Start Origin AV Production in 2022
6:24 Renault Reveals Refreshed Megane
7:18 Mid-Engine ‘Vette Starts Down Production Line
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TESLA’S STOCK SOARING
When you hear the words Tesla and ludicrous, you think of its crazy speed boost feature. But now, ludicrous seems like a better way to describe its stock price. A year ago, $500 a share seemed outlandish but yesterday Tesla’s stock closed at $780 a share, a jump of 20% in one day. The company’s stock surged after Panasonic revealed that its battery joint venture with Tesla is profitable for the first time. Now, $1,000 a share doesn’t seem that far-fetched for the EV maker. But even that is on the low-end. Investment firm ARK Invest forecasts that Tesla will hit $7,000 a share by 2024. And that’s not even its most optimistic scenario. In its bull case, it says Tesla could reach $15,000 a share. And if that’s not ludicrous, I don’t know what is.
TESLA’S MARKET CAP SOARING
Tesla now has a market capitalization of $140 billion. If it hits $1,000 a share it will be worth $180 billion. At $7,000 it would be worth $1.2 trillion. And at $15,000 a share it would be worth $2.7 trillion. But before you get too caught up in this, keep in mind that Ward’s is reporting Tesla’s sales in the U.S. market dropped 65% last month. A couple of bad sales months could easily send those shares tumbling.
U.S. JANUARY SALES BETTER THAN EXPECTED
But most automakers had a pretty good month in the U.S. market. The numbers look better than the analysts were forecasting. The SAAR, or seasonally adjusted annual rate, came in at 16.8 million, versus 16.7 million the year before. Automakers sold 1.130 million vehicles, versus 1.133 million a year ago, so sales were down only 0.2%. Even though GM no longer reports sales on a monthly basis, Wards Intelligence says it believes GM had a strong month, possibly with large fleet orders, as the company is pulling out all the stops to regain sales it lost from 40 day UAW strike last fall.
| U.S. January Sales | |||
|---|---|---|---|
| 2019 | 2020 | Change | |
| SAAR | 16.71 Million | 16.84 Million | |
| Sales | 1.130 Million | 1.133 Million | -0.2% |
INCENTIVES DOWN, ATPs UP
And here’s where the numbers really start to get interesting. According to ALG, or Automotive Lease Guide, automakers cut their incentives 1.3%, but average transaction prices, or ATPs, were up 2%. Wards says part of the reason they could do that is that inventory levels are at a 6 month low. Automakers have not scheduled any increase in production so it looks like they’re going after better margins instead of higher sales. Even so, with sales strong and incentives down, Wards says we could see an upside surprise in sales this year. And here’s our Autoline Insight, or maybe we should call it our Autoline Observation. As long as the economy is healthy, car sales never go down during a presidential election year.
| U.S. January LV Sales | |
|---|---|
| Sales Incentives | -1.3% |
| ATPs | +2.0% |
HYUNDAI TO HALT MOST PRODUCTION IN SOUTH KOREA
A quick follow up to yesterday’s story about Hyundai suspending production of the Palisade in South Korea. Now the company is halting production at most of its factories in its home country due to parts shortages caused by the coronavirus outbreak in China. Some of the plants will restart production next week. But this is a blow to Hyundai since 40% of its global production output comes from South Korea.
TOYOTA DEVELOPS MARINE FUEL CELL SYSTEM
Toyota sure believes in fuel cell technology. We’ve seen cars, semi trucks, buses and forklifts from Toyota and now it developed a fuel cell system for boats. It fitted a modified version of the fuel cell system used in the Mirai into a 31 meter or roughly 100 former racing catamaran boat. The system was made more compact to make it suitable for marine applications. The boat also features a mix of renewable energies, highlighted by solar panels nearly covering its entire upper deck and an on-board system that produces hydrogen from seawater. The boat is on a 6-year mission, which started in 2017, to travel around the world and was only fitted with the Toyota system at the end of last year. So, it will be at least another 3 years before we will see a system like this available to the rest of the boating world.
KIA TEASES NEW SORENTO
And Kia released a couple of teaser sketches of the all-new Sorento. The fourth-gen model is the first to be built on the company’s new mid-size SUV platform. It will offer a hybrid option for the first time and it will be available with advanced driver assistance systems. Kia didn’t share many details but we’ll learn more in early March when its unveiled at the Geneva auto show. But if you’d really like to see more, do a search. I saw that there are some uncovered spy photos circulating the internet.
GM TO START ORIGIN PRODUCTION IN 2022
We have a little bit clearer picture of when General Motors’ autonomous unit Cruise will begin using those autonomous shuttles called Origin for public ride hailing. Autoforecast Solutions reports that GM will start making the Origin at its Hamtramck plant in Detroit starting in November of 2022. That suggests it will go into service sometime in 2023. Autoforecast also says GM cancelled plans to start making the second generation of the autonomous Cruise AV in favor of making the Origin instead. But it will continue making the first generation car. By the way, that Hamtramck plant is where GM is going to build all its new generation electric vehicles, including the Hummer.
RENAULT REVEALS REFRESHED MAGANE
Renault is refreshing all versions of the Megane. No real changes in exterior styling, but it does get new LED headlamps and the interior is reworked and modernized. It features new larger display screens as well as new driver assistance systems. There’s more options under the hood. A plug-in hybrid is now available, which mates a 1.6L 4-cylinder gas engine with two electric motors. A 9.8 kWh battery feeds the motors and provides an estimated range of up to 50 kilometers based on the WLTP test cycle. That converts to roughly 27.5 EPA miles. A new R.S. model replaces the GT Line and features a 300 horsepower 1.8L turbocharged engine mated to either an automatic or manual transmission. The new Megane will go on sale this summer.
MID-ENGINE ‘VETTE STARTS ROLLING DOWN PRODUCTION LINE
Corvette fans will be happy to know that production of the new mid-engine ‘Vette started yesterday and shipments to dealers will start late this month or in early March.
And be sure to join us for Autoline After Hours this Thursday. The show will be all about design because our special guest is John Manoogian, a former GM designer and the current Director of Design at the Quadrobot Corporation, which is an EV startup in the Detroit area. So if you have any questions send them our way to viewermail@autoline.tv. That’s this Thursday at 3PM eastern time.
But that’s it for today, thanks for watching and please join us again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.
