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Runtime: 10:10
0:00 Tesla Stock Drops as Investors Wonder What Elon Is Doing
1:18 IRA Removal Threatens EV Investment & Jobs
2:16 Farley: Tariffs Causes Chaos
2:43 Dems Say Trump Pausing EV Program Is Illegal
3:04 JD Power Forecasts Flat U.S. EV Sales
3:26 EU Auto Industry Needs Radical Change, Or Face Extinction
5:31 Lucid’s Rawlinson Predicts 1 Million Sales/Year
6:41 Foxconn Open to Acquiring Renault’s Stake in Nissan
7:19 Lyft Posts First Time Profit, Stock Drops
8:06 Corvette ZR1 Smashes Track Records
8:44 Porsche & Michelin Develop New Wet Racing Tire
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TESLA STOCK DROPS AS INVESTORS WONDER WHAT ELON IS DOING
Tesla stock shot up 90% after last November’s election. Investors figured that Elon Musk’s role in the Trump Administration would benefit the company. And that raised his net worth by more than $200 billion, giving him a total of $442 billion, according to Business Insider. But since Trump’s inauguration last month, Tesla stock is down 23%, wiping out more than $42 billion of the 53-year-old South African’s wealth. Some say that’s because of the controversial work Musk is doing with DOGE, or the Department of Government Efficiency. Others say it’s because Tesla sales are tanking as EV buyers turned off by Musk’s politics are going to other brands. Others point to weak Q4 earnings. But the real reason the stock has fallen in five straight trading sessions seems to be that investors think Musk is trying to do too many things instead of paying more attention to what’s going on at Tesla. Elon also announced that he wants to buy OpenAI for $97.4 billion.
IRA REMOVAL THREATENS EV INVESTMENT AND JOBS
The Inflation Reduction Act helped spur tens of billions of dollars in investment in the U.S. to build out the EV infrastructure. But last month, President Trump paused funding given out by the legislation, which is putting that investment along with thousands of jobs at risk. And according to an Automotive News analysis of Atlas Public Policy Data, the overwhelming amount of that investment, $105 billion which is expected to create 84,000 jobs, is earmarked for Republican leaning states. So some Republicans in Congress are calling on Trump to reform the legislation and not get rid of it all together. The auto industry is also worried they’ll get stuck with excess capacity and stranded capital since just a fraction of the EV manufacturing investments are operational. More than 90% of the projects are currently under construction or still in the planning phase.
FARLEY: TARIFFS CAUSES CHAOS
And one of those automakers that’s concerned is Ford. CEO Jim Farley said that even though Trump has good intentions to help the auto industry, his plans to roll back EV subsidies and threats to increase tariffs on Canada and Mexico is creating “a lot of cost and a lot of chaos.” Farley says the tariffs will benefit Korean, Japanese and European companies, since they’ll be less impacted by them.
DEMS SAY TRUMP PAUSING EV PROGRAM IS ILLEGAL
Democrats are also pushing back against Trump suspending all EV charging infrastructure spending that’s part of the $5 billion NEVI program. Nine Democratic senators say the administration is illegally withholding $3 billion of those funds that have already been appropriated. But so far, they haven’t taken any further action.
JD POWER FORECASTS FLAT U.S. EV SALES
And with all this unpredictability regarding EVs, it’s no surprise to learn that JD Power is forecasting that EV sales will remain flat this year in the U.S. It predicts that 1.2 million EVs will be sold this year, accounting for 9.1% of the overall new car market or the same as it was last year.
EU AUTO INDUSTRY NEEDS RADICAL CHANGE, OR FACE EXTINCTION
An intriguing report from Dunne Insights says that Europe should learn from the Inflation Reduction Act and launch its own effort to build EV batteries or risk losing it all to China. Michael Dunne, a well-known China expert, says Europe should partner with Japanese and South Korean battery makers. And adds it should copy China by demanding that any Chinese automaker that wants to sell cars in Europe needs to partner with a European automaker and that the European automaker should be the majority owner. He also calls for higher tariffs on finished battery cells and components, with a goal that Europe manufactures all of its own cells within three years. The 44-page report titled “Europe’s Auto & Battery Industry–Revolutionary Change or Extinction” has a lot more insight and analysis, and we’ve got a link to it in the description box and transcript for today’s show.
LUCID’S RAWLINSON PREDICTS 1 MILLION SALES/YEAR
Peter Rawlinson, the CEO of Lucid, thinks that by the early 2030’s the automaker will be making a million vehicles a year. One way it could get there is with an expanded lineup. Lucid launched the Gravity SUV at the end of last year and by the end of next year it plans to start making vehicles off a new mid-size platform. The automaker already produces the most efficient EV powertrain on the market, which allows it to cut cost and it says that approach will have a cascading effect on its new mid-size vehicles, which will start around $50,000. Rawlinson says that’s when Lucid can start competing directly with Tesla. He also thinks that in about 10 years people, especially those that live in the city, will start to realize they don’t need as much EV range for daily driving and he expects to offer vehicles that can travel roughly 180 miles on a charge. The other way Lucid will reach a million vehicles a year is by working with other automakers. It already has a deal to supply Aston Martin with its EV powertrain and Rawlinson says it’s in talks with several other companies about similar deals.
FOXCONN OPEN TO ACQUIRING RENAULT’S STAKE IN NISSAN
Last week Nissan shocked the industry by calling off a possible merger with Honda. Nissan says it’s still looking for a new partner and prefers to team up with a tech company that’s based in the U.S. But Taiwanese electronic contract manufacturer, Foxconn, has been interested in a partnership with Nissan since last year and Foxconn’s chairman just came out and said that it’s interested in cooperating with Nissan. He said that the tech company could take a stake in Nissan and that it would be open to acquiring Renault’s 36% stake in the automaker. Both Nissan and Renault declined to comment.
LYFT POSTS FIRST TIME PROFIT, STOCK DROPS
Lyft, the ride-hailing company, looks like it finally achieved an important milestone. It was fully profitable last year, the first time the company posted a full-year GAAP profit. The company only made $22.8 million in net profits, but that compares to a loss of $340 million the year before. It provided 828 million rides, up nearly 17%. Revenue shot up 31% to $5.7 billion, and it generated $766 million in free cash flow which gives management a lot of money to play around with. Even so, investors were not very impressed. The stock dropped nearly 5% after the earnings report.
CORVETTE ZR1 SMASHES TRACK RECORDS
How do you brag that you’ve got the best sports car of all? One way is to show that it’s faster than anyone else. Chevrolet took the Corvette ZR1 to five different race tracks in the U.S. and started smashing production car lap records. It now holds the top time at Road America and Road Atlanta, on one of the courses at Watkins Glen and at two of the courses at Virginia International Speedway. And Chevy says it used 4 different drivers to set those records. The ZR1 is currently the top version of the Corvette and starts at just under $175,000.
PORSCHE & MICHELIN DEVELOP NEW WET RACING TIRE
And speaking of cars on the track, Porsche and Michelin have developed a new wet-weather racing tire. The new Michelin Pilot Sport S 5 has been tailored for the 992-generation of the Porsche 911 GT3 RS, specifically for track use in wet conditions. Rain can sometimes spell the end of a track-day event, but with the right set of tires, it doesn’t necessarily have to.
And that brings us to the end of today’s show. Thanks for making Autoline a part of your day.
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“CEO Jim Farley said that even though Trump has good intentions to help the auto industry,”??? How can threatening tariffs on everything from Canada and Mexico, and actually enacting them on steel and aluminum, in any way, be considered “good intentions to help the auto industry”?
Given the difficulty a friend is having with getting a Rivian repaired after a minor crash, I’d be very reluctant to buy a Lucid, even though I like the products. I’d expect parts availability and number of shops certified to repair Lucid might be even worse than Rivian, which is apparently pretty bad. Also, the Lucid Air has the worst reliability results of all vehicles in CR’s surveys. How long do you have to wait to get warranty work done?
They need to take the ZR1 to the ‘Ring, if it would be able to set records there. That seems to be the place that production car records get publicity.
Kit —
I think Farley’s prefaced comments, were meant to not place Ford in the cross hairs of the administration, but still make the point he intended to make. That the administration’a are more than just unpopular by those in the industry, but especially short, the could do serious harm and may be disastrous long term, with some possibly not able to recover!
What that report suggesting what EU legislators could/should do to Chinese companies, has on several occasions been mentioned by commentator here on ALD, in many respects. It was amusing to me to hear what sounded like what people have said in this form, coming from what is a respected industry insider. Or is that insider secret an ALD audience member?!?!
No one in the industry wants to get in Trump’s crosshairs on tariffs. But a 25% tariff on Canadian and Mexican vehicles and components will tear up the North American supply chain and financially damage every automaker that depends on it. Farley is showing more courage than the other CEOs by speaking out. Better to raise Trump’s (temporary) ire than lose billions of dollars because you kept your mouth shut.
Kit again what you fail to see it’s the intention behind tariffs or the threat of them is part of an overall negotiation to get manufacturing jobs back into the US. So sure GMs Buick brand is likely not happy since they manufacture in China. Many people like myself feel like oh well too bad for Buick. They chose to build in China and exploit the cheap labor and did it provide cheaper cars to Americans? Nope it was about profits and sure Jim Farley is scrambling because Ford bought into the EV craze without doing enough marketing to see that most people don’t want them. So irregardless of tariffs they are hustling to offer products people want and I’m sure he’ll be more than happy to blame their failure to look ahead on Trump.
The long term affect is American jobs and yes probably will be some growing pains to get there going to take alot to unscrew the mess the last 4 years created.
Sure would like to understand Farleys reasoning behind saying any tariffs would benefit Korean and Japanese manufacturers? Maybe cause they know how to build an affordable vehicle people want. While it sounds like Farley is saying Ford can’t compete with manufacturers that have tariffs added to their cost. Hum.
Kudos to Farley. Last of the Americans.
The first Trump administration’s tax breaks for business created a slightly bigger deficit than the Biden administration. And didn’t prevent eben Boeing’s fall, because a quick high from stock buybacks won’t stop the substance abuse in this high-applied science world.
Lambo, Trump is just creating chaos, and turning the US into a an unreliable trading partner no one can trust. As far as Envision, they are building it in China for same reason BMW builds X5 in the US. That’s where the market is. Far more Envisions are sold in China than in the US.
Companies are not going to move manufacturing back to the US, with all of the instability, unless they have an idle plant, with equipment, which would take almost nothing to restart.
If only we had companies that produced aluminum and steel in the US. Oh wait, we do! No tariffs on that supply Mr. Farley. And maybe stop wasting the supply you do have building Mustang Mach Es that you can’t sell. Better start moving your plants back to the US, something anyone with any CEO with foresight, kind of the basic requirement of that job, would have began early last year.
Why do I get a notification to log in when there’s no way to do so. I would like to be able to view the program
Daily, smelting aluminum involves electrolizing molten rock. It takes huge amounts of energy to do that. Quebec has cheap hydro, ideal for the process. It would be idiotic, financially and environmentally to do a lot of that in the US.
Yes kit the Buick sells or did sell the majority of the volume in China and that makes sense but if the sales in the US fall off due to tariffs I guess maybe Buick should have had something in their line up made here. Again that’s managements failures.
And yes ALD even announced a week or so ago that MB or BMW are looking to move production into their Tenn plant that was slated for Mexico.
So yes production will get moved. Opening plants to make raw material and components will start to make sense when you take away the cost advantage of manufacturing overseas. I’m not sure why this is such a hard concept for people to understand. And the so called chaos isn’t any worse than when economic advantage dictates moving a line to South Africa, Asia or Europe. They move lines all the time. No doubt the whining is way worse than the actual change requires. When they make a move to save a few bucks on a part you don’t hear a peep. But to save the same money on a tariff it’s nothing but whining.
I could see it making sense to some, threatening China for a good bargaining position, but threatening our friends like Canada and Mexico is just idiotic. He made the free North American trade possible in his first term, now he’s just creating chaos and destabilizing industry and the economy. Somebody please stop him.
Daily Driver: Mach E’s that don’t sell? They outsell the gasoline Mustangs 2x!
I think the disconnect with the tariffs, is the administration’s reason for them with the country’s neighbors to the north and south. Not only was Trump responsible for the new trade agreement between the three countries (which came out of nowhere to some), to get Canada and Mexico to do more to control illegal drugs and immigrants from entering the US, he added a tariff on goods coming from them? What does one have to do with the other? If he felt the leaders of those countries could do more in those areas, why couldn’t they focus negotiations on that. Instead, he puts tariffs on goods! So, let’s say Canada and Mexico place ball, do the tariffs on goods go away? While many say the tariffs are to bring jobs back, to the US, but Trump has gone the record as saying that the tariffs, on the Canada and Mexico at least, are because of illegal drugs and immigrants that are coming into the US illegally. So why the attack on businesses when the focus is on the policies and actions of his few leaders? These auto OEMs have already invested heavily on something the new administration has done an about face on, should they spend the money to move these things to the US and the leaders work their differences out, will the Trump administration change course again? To KITs point, how does an organization move forward in step with new direction from policy makers, when the changes come fast and furious, are highly punitive, and flip-flop with little rhyme or reason? As if to say ‘they will address this problem, by coming down heavy on something that has nothing to do with the actual problem they want to fix’!