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What Trump's election to the White House could mean for EVs

suimt — Wed, 06 Nov 2024 21:19:02 +0000

Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced the massive $2.2 billion investment to fully renovate the facility to build a variety of all-electric trucks and SUVs.

Photo by Jeffrey Sauger for General Motors

DETROIT – President-elect Donald Trump’s victory over Vice President Kamala Harris is expected to send the U.S. electric vehicle industry into a period of uncertainty.

Republicans, led by the former president, have largely condemned EVs, claiming they are being forced upon consumers. Trump has vowed to roll back or eliminate many vehicle emissions standards under the Environmental Protection Agency as well as incentives to promote production and adoption of the vehicles such as the Biden administration’s Inflation Reduction Act of 2022.

Auto industry insiders and other officials have said it would be difficult for Trump to completely gut the IRA, but he could defund or limit EV subsidies through executive orders or other policy actions.

Several people said they would expect Trump to target federal consumer credits that currently offer up to $7,500 for the purchase of an EV rather than target industrial production credits for companies.

“The IRA will probably have some adjustments … I don’t think the IRA will go away,” David Rubenstein, co-founder and co-chairman of The Carlyle Group investment firm, told CNBC on Wednesday. “It has some really good things in it that I think Republicans and Democrats will like.”

Many of the investments into EV production under the IRA having been taking place in Republican states such as Ohio, South Carolina and Georgia.

Automotive executives are also quick to say they don’t base investment decisions on who holds the White House, but there are natural adjustments with new administrations.

“Anytime there’s an administration change, it’s an interesting time for the industry because we have to go through new policies and regulations and have to bring new people up to speed on who we are and what we do,” David Christ, group vice president and general manager of the Toyota Division in North America, said Wednesday during an Automotive Press Association event near Detroit. “Administrations sometimes change every four years, so we don’t really do a lot of modifying the strategy.”

General Motors, Ford Motor and Chrysler parent Stellantis — would be the biggest winners of a second Trump term and Republican control of Congress.

“We see F and GM as the main beneficiaries from the Trump administration,” BofA Securities analyst John Murphy said in a Wednesday investor note. “The current environmental regime would pressure the core business of legacy [automakers, trucks,] to decarbonize by the end of the decade while shifting quickly to an EV portfolio.”

GM’s aspirations for an “all-electric future” and profitable EV business in the near term are highly reliant on federal tax credits.

Analysts had indicated EV startups such as Rivian Automotive and Lucid Group would benefit more with a Democratic win.

Toyota could also be a winner if EV regulations are reduced or eliminated, as the Japanese automaker has been slow to invest in all-electric models compared to hybrid vehicles.

Shares of GM and Ford closed Wednesday up 2.5% and 5.6%, respectively. Stock prices for Toyota and Stellantis, which is experiencing significant problems in the U.S., were essentially level. Lucid and Rivian were each down, 5.3% and 8.3%, respectively.

Shares of automakers after President-elect Donald Trump’s victory.

An outlier is U.S. electric vehicle leader Tesla. CEO Elon Musk heavily campaigned in swing states for Trump, who has discussed making the billionaire a government efficiency czar.

Shares of Tesla soared Wednesday by 15% and earlier notched a new 52-week high.

“We see RIVN and LCID challenged, which is largely reflected in the stocks,” Murphy said. “We don’t expect meaningful issues for TSLA since it has already reached profitability and will introduce more entry level products that could be attractive for the larger public.”

Several automakers did not immediately return request for comment after NBC News and several other media outlets called the election for Trump.

Others such as the Detroit automakers and Hyundai Motor congratulated Trump and the newly elected officials across all levels of government.

“We look forward to working with the new Administration and Congress on policies that strengthen the U.S. automotive industry, which supports 9.7 million American jobs and drives more than $1 trillion into the economy each year,” Ford said.

“We congratulate and look forward to working with the President-elect, Congress, and all elected officials to ensure that the U.S. continues to lead the world in technology and innovation, to the benefit of American workers and consumers alike,” GM said.

“Advanced Clean Cars II” regulations of 2022 call for 35% of 2026 model year vehicles, which will begin to be introduced next year, to be zero-emission vehicles. Battery-electric, fuel cell and, to an extent, plug-in hybrid electric vehicles qualify as zero emission.

Before the election, automotive officials said regardless of who won the White House, many automakers will push for the mandates to be postponed.

The California Air Resources Board reports 12 states and Washington, D.C., have adopted the rules; however, roughly half of them did so starting with the 2027 model year. They are part of CARB’s Advanced Clean Cars regulations that require 100% of new vehicle sales in the state of California to be zero-emission models by 2035.

EVs made up 10% or more of local market shares in just 11 states and the District of Columbia to begin this year, according to the Alliance for Automotive Innovation, a trade association and lobby group that represents most major automakers operating in the U.S.

Auto executives and industry experts also expect Trump could roll back or freeze the Corporate Average Fuel Economy, or CAFE, standards for model years 2027-2031.

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Harris vs. Trump: Auto insiders weigh in on both candidates, top issues

suimt — Tue, 29 Oct 2024 17:00:01 +0000

New Ford F-150 trucks go through the assembly line at the Ford Dearborn Plant on April 11, 2024 in Dearborn, Michigan.

Bill Pugliano | Getty Images

DETROIT — The automotive industry has become a crucial topic during the 2024 presidential election as Michigan — home of the Motor City and 1.1 million automotive jobs — remains a critical swing state.

Vice President Kamala Harris, former President Donald Trump, and their running mates and supporters have made Michigan a second home in recent weeks as the campaigns attempt to win over undecided voters in the Great Lakes State.

Since 2008, whichever candidate has won the state has moved into the White House, including Trump in 2016 and President Joe Biden in 2020.

“Michigan’s 16 electoral votes have helped thrust Autos into the debate. Between Trump’s hyperactive and contradictory statements and Harris’ quieter views lay deep differences but also convergence,” Jefferies analyst Philippe Houchois wrote in an investor note Monday.

While major automakers and suppliers have shied away from publicly endorsing either presidential candidate, executives and lobbyists from several companies spoke to CNBC on the condition of anonymity to discuss how they’re preparing for each candidate, as well as a likely divided Congress.

Electric vehicles, trade, tariffs, China, emissions regulations and labor are among the top issues automakers are monitoring, according to industry executives and policy experts.

union President Shawn Fain who has been a combative foe to automakers, is concerning to some.

US Vice President and Democratic presidential nominee Kamala Harris greets union workers as she tours an International Union of Painters and Allied Trades training facility in Macomb, Michigan, on October 28, 2024.

Drew Angerer | AFP | Getty Images

If Trump wins reelection, automotive industry officials largely expect that he’ll return to policies and actions from his first presidential term, but those stances could be potentially more aggressive than they were before.

If he’s in office, insiders expect he would roll back or eliminate tightening federal emissions and fuel economy like he did during his first term; renew a battle between California and other states that set their own standards; and potentially enact funding changes to the Biden administration’s key Inflation Reduction Act of 2022 legislation.

Officials said it would be difficult for Trump to completely gut the IRA, but he could defund or limit EV subsidies through executive orders or other policy actions.

Automakers, suppliers and other auto-related companies are preparing for both outcomes as well as a split in Congress, insiders said.

Republican presidential nominee and former U.S. President Donald Trump speaks as he visits a campaign office in Hamtramck, Michigan, U.S. October 18, 2024.

Brian Snyder | Reuters

“There’s no perfect scenario. Both candidates offer some opportunities and challenges,” said a leading lobbyist and public policy expert for a major automaker. “Everyone in our business has to look at the gamut of scenarios.”

Some Wall Street analysts speculate legacy automakers — specifically the “Detroit” companies General Motors, Ford Motor and Chrysler parent Stellantis — would benefit most with Trump and Republican control of Congress.

EV startups such as Rivian Automotive and Lucid Group would benefit more with a Democratic win, largely due to expected plans involving EVs and fuel economy requirements. That’s despite Tesla CEO Elon Musk‘s continued support for Trump.

“Advanced Clean Cars II” regulations of 2022 call for 35% of 2026 model year vehicles, which will begin to be introduced next year, to be zero-emission vehicles. Battery-electric, fuel cell and, to an extent, plug-in hybrid electric vehicles qualify as zero emission.

The California Air Resources Board reports 12 states and Washington, D.C., have adopted the rules; however, roughly half have them starting for the 2027 model year. They are part of CARB’s Advanced Clean Cars regulations that include mandating 100% of new vehicle sales be zero-emission models by 2035.

Only 11 states and the District of Columbia had an EV market share above 10% to begin this year, according to the Alliance for Automotive Innovation, a trade association and lobby group that represents most major automakers operating in the U.S.

Officials said regardless of who wins the White House, many automakers will push for the CARB mandates to be postponed. They also would expect Trump to roll back or freeze the Corporate Average Fuel Economy, or CAFE, standards for model years 2027-2031.

Several automotive insiders said they expect Harris would work on a middle ground for such standard with the automakers, much like Biden, to an extent, has done.

talking point for Democrats four years ago to a rallying call for Republicans.

Republicans, led by Trump, have largely condemned EVs, saying that they are being forced upon consumers and that they will ruin the U.S. automotive industry. Trump has vowed to roll back or eliminate many vehicle emissions standards under the Environmental Protection Agency and incentives to promote production and adoption of the vehicles.

In contrast, Democrats, including Harris, have historically supported EVs and related incentives.

Harris hasn’t been as vocal about backing EVs lately amid slower-than-expected consumer adoption of the vehicles and consumer pushback. She has said she does not support an EV mandate such as the Zero-Emission Vehicles Act of 2019, which she co-sponsored during her time as a senator, that would have required automakers to sell only electrified vehicles by 2040.

Lucid Group CEO Peter Rawlinson told CNBC on Monday that regardless of which presidential candidate wins the election, he believes America’s EV industry is still in its infancy and needs to continue to be “nurtured.”

Rawlinson, whose company has the most efficient EVs on sale, also argues the IRA should favor not just the size of a battery, like it currently does, but the efficiency of the vehicles.

“That’s effectively incentivizing electron-guzzling EVs,” he said. “It actually incentivized to put more batteries in and be less efficient.”

negotiated under Trump’s first term in office and took effect in 2020. However, the former president and Democrats have said it needs to be improved to better support American automotive production.

While Trump touted the deal when it was renegotiated, Harris was one of 10 U.S. senators who voted against USMCA at the time.

GM CEO Mary Barra last week said the automaker is “paying careful attention” to the election, including how potential changes in trade and tariffs could impact the company.

“We have and we’ll continue to engage constructively with the policymaking process regardless of the election outcome. When you look at the number of jobs created in the U.S., even with some vehicles that are manufactured outside, a lot of them are in our partners from an ally perspective,” she said. “It’s a very complex situation.”

Tariffs are central to Trump’s plan for the auto industry. He has said he would be willing to increase tariffs dramatically to prevent Chinese automakers from importing cars into the U.S. from factories in Mexico.

Chinese automakers are not currently doing that, but are expected to attempt to use that method of importing in the years ahead, as they expand sales and build localized production plants in the country.

Harris has reportedly called Trump’s tariff proposals “a sales tax on the American people.” The vice president hasn’t outlined any specific changes she’d make to the current tariff structure if elected, including on Biden’s announcement of raising the tariff rate on EVs imported from China from 25% to 100%.

Non-U.S.-based automakers, which together account for 48% of U.S. production and 52% of USMCA production, look more positively leveraged to Harris winning, according to Jefferies.

speech at the Democratic National Convention.

The UAW arguably has more political clout than any time in a generation, led by Fain and his top advisors who he brought in from outside the union’s ranks. But there has been a divide in the UAW and other unions regarding the historically Democratic-backed organizations and their members.

While the Teamsters declined to endorse a candidate due to a divide in the union, UAW leaders not only endorsed Harris but have been a driving force for her election campaign in Michigan and other states.

The UAW last week said internal polling showed increasingly “strong support for Kamala Harris over Donald Trump, with Harris’ lead over Trump surging in the last month.”

Meanwhile, Trump and Fain have consistently criticized one another over the past year, as the union attempts to organize as many auto plants as possible following major contract gains won during negotiations last year with the traditional Detroit automakers.

Blue-collar workers such as UAW members were viewed as crucial supporters for Trump’s first presidential election over Democratic candidate Hillary Clinton in 2016.

— CNBC’s Michael Bloom contributed to this report.

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Biden says Elon Musk was an 'illegal worker' when he began U.S. career

Aseem — Sun, 27 Oct 2024 02:32:29 +0000

President Joe Biden called out Tesla and SpaceX CEO Elon Musk, now a Republican megadonor and Trump campaign surrogate, for hypocrisy on immigration on Saturday, saying Musk launched his long career in the U.S. as an “illegal worker” before becoming the world’s wealthiest man.

The president made these remarks at a campaign event to support Democrats that took place in Pittsburgh, Pennsylvania, on Saturday.

Labeling Musk as former President Donald Trump’s wealthy new “ally,” Biden said, “That wealthiest man in the world turned out to be an illegal worker here when he was here,” referring to Musk.

“He was supposed to be in school when he came on a student visa. He wasn’t in school. He was violating the law. He’s talking about all these ‘illegals’ coming our way,” Biden added.

He then criticized Trump and Republicans for failing to sign legislation that would fix “the problem with the border.” He added, “We have fewer people crossing the border illegally now — or crossing the border period — than at any time since his third year as President of the United States.”

The Trump campaign did not immediately respond to CNBC’s request for comment on Biden’s remarks.

Musk recently completed a series of “town hall” events in the same swing state of Pennsylvania, where he sought to convince voters to back Trump and Trump’s policies. Musk also stirred up his fan base there by doling out $1 million lottery-style prizes to registered voters in swing states who signed a petition distributed by his pro-Trump group, America PAC.

According to an analysis by the Peterson Institute for International Economics, Trump’s new immigration policy proposals include plans for the largest deportation operation in U.S. history, ending birthright citizenship, and revoking the visas of and deporting foreign students who are pro-Palestinian protestors, among others.

Biden’s comments about Musk, his Trump alliance and hypocrisy on immigration followed a Washington Post report that cites correspondence, legal records and multiple people who helped Musk attain a work visa in 1996 after he had already been working here without one.

Musk had arrived in the U.S. with the stated intention of attending grad school at Stanford in the mid-90s. He did not enroll in the program to which he said he was accepted and instead began to build a venture-backed startup called Zip2 with his brother.

The Washington Post wrote that investors in Musk’s first company worried about their “‘founder being deported’ and gave him a deadline for obtaining a work visa.”

Zip2 sold for about $300 million in 1999, a windfall that enabled Elon Musk to later become an early investor in and chairman of Tesla, and to start his capital-intensive aerospace venture SpaceX, which is now a major U.S. defense contractor.

Those businesses have propelled Musk to become the world’s wealthiest person on paper. According to Forbes, the Tesla CEO’s net worth stands at around $274 billion today.

In late 2022, Musk used that considerable wealth to acquire the social network Twitter in a $44 billion buyout.

On the platform, since rebranded X, Musk has repeatedly claimed in posts seen by his massive online fan base that “open borders” and undocumented immigrants are somehow harming the United States.

He also has shared the false claim that noncitizens are systematically voting in U.S. elections, a conspiracy theory floated by conservative groups to lay the legal groundwork to contest the election results if the Democratic nominee, Vice President Kamala Harris, wins the presidency.

In the U.S., it’s already a federal crime and a crime under every state’s laws for noncitizens to register or vote in federal elections.

According to studies compiled by the Brennan Center for Justice, “extensive research reveals that fraud is very rare, voter impersonation is virtually nonexistent, and many instances of alleged fraud are, in fact, mistakes by voters or administrators. The same is true for mail ballots, which are secure and essential to holding a safe election amid the coronavirus pandemic.”

— CNBC’s Rebecca Picciotto contributed to this report.

Volkswagen's Scout Motors reveals first EVs as it shifts to include plug-in hybrids

suimt — Fri, 25 Oct 2024 00:49:43 +0000

Scout Terra pickup truck and Scout Traveler SUV concepts

Scout

NASHVILLE, Tenn. — Volkswagen-backed Scout Motors revealed its first electric vehicles Thursday and announced plans for the brand to expand its lineup to include an emerging type of plug-in hybrid electric vehicle in addition to EV models.

Scout, a former American vehicle brand from 1961 to 1980, was expected to exclusively offer EVs in a bid for the German automaker to expand its presence in the U.S. However, slower-than-expected adoption of EVs and higher costs have led it to change course and include extended-range electric vehicles, or EREVs.

“Being a startup that moves quickly, we can pivot,” Scout CEO Scott Keogh, a longtime auto executive who previously led VW’s operations in the U.S., told CNBC. “The pivot that we made a number of months ago into offering range extender definitely was a smart play.”

EREVs are basically a type of plug-in hybrid electric vehicle. They include EV motors and battery cells, as well as a traditional internal combustion engine to power the vehicle’s electric components when the battery loses its energy. The engine essentially acts as a generator to power the EV components when needed.

Scout Terra pickup truck concept

Keogh said Scout added EREVs to better protect the brand from any market volatility amid less-than-expected consumer demand for EVs.

“We think electrification is the future. Range extender sets it up as an EV car, so it introduces people to electrification, yet it has a super smart, let’s say, ‘backup plan,'” he said during an interview Thursday. “It will drive like an EV.”

He said Scout has no plans to offer a traditional, non-electric vehicle with only an internal combustion engine.

The company’s first vehicles — a full-size pickup truck and large SUV — will cover about 40% of the highly profitable U.S. sales market.

Keogh said the company targets to be profitable on an operational basis within the first full calendar year after initial production of the vehicles, which will be built at a $2 billion plant that’s under construction in South Carolina.

“If you look at these profit pools, these two areas, from this size pickup truck to this sized SUV … these are the largest profit pools in the world,” Keogh said.

Scout Traveler SUV concept

Scout

Being profitable during that timeframe would be quite a success, as current EV startups such as Rivian Automotive and Lucid Group lose tens of thousands of dollars on each vehicle they produce after several years.

Meanwhile, Keogh said an announced software deal between VW and Rivian will not impact Scout’s operations. He described the $5 billion software deal, which includes the establishment of a joint venture, as an “exciting opportunity” for Scout.

“It’s good for scaling. It’s good for technology. It’s good for everything,” Keogh said.

Scout’s South Carolina plant is planned to have a production capacity of 200,000 vehicles. Scout expects to use batteries — the most expensive part of an electric vehicle — from VW’s joint venture battery cell manufacturer in Canada.

The company opened reservations for the vehicles Thursday night on its website. Scout plans to sell the vehicles directly to consumers instead of through a traditional franchised dealer network like VW does in the U.S.

North American Charging Standard, an 800-volt architecture with up to 350-kilowatt charging capability, and will be capable of bi-directional charging that will allow the vehicle to act as a generator.

Toyota Land Cruiser. It’s larger than Jeep’s well-known Wrangler, which is currently available as a plug-in hybrid electric vehicle.

The truck is a full-size pickup — a segment currently dominated by Ford, General Motors and Stellantis’ Ram brand. But the electric pickup market where Scout will compete remains a developing market.

Automakers such as GM and Ford rushed to release all-electric pickup trucks early in this decade to compete against several EV startups, many of which never materialized, as well as Tesla. Stellantis is expected to release all-electric and EREV full-size pickups by next year.

Scout Traveler SUV concept

But after rushing the vehicles to market, sales slowed. Much like the overall EV industry, the large vehicles went from commanding significant price premiums to being highly incentivized.

Overall, this electric “truck” market, including the SUVs, accounted for nearly 58,000 vehicles sold during the first half of this year, according to estimates from Motor Intelligence. That’s less than 1% of the roughly 7.9 million light-duty new vehicles sold during that time in the U.S., but a 35% quarterly increase from the first to the second quarter, according to the data.

Keogh believes Scout can differentiate itself in the market with its products, lower pricing and brand appeal. Additional Scout products are expected to follow in the years ahead, Keogh said.

“Can we consider some point in the future sizing down? Absolutely,” he said. “You want to throw the dart at the best place first. And I think we’ve done that between these two vehicles.”

S&P 500 rises to end three-day losing run, lifted by surge in Tesla: Live updates

Aseem — Thu, 24 Oct 2024 21:24:28 +0000

Traders work on the floor of the New York Stock Exchange during morning trading on Oct. 8, 2024.

Michael M. Santiago | Getty Images

The S&P 500 bounced back on Thursday, posting its first positive day in a week that has been beset by higher rates.

The S&P 500 added 0.21% to 5,809.86 and snapped a three-day run of losses. The Nasdaq Composite jumped 0.76% and closed at 18,415.49. The Dow Jones Industrial Average lost 140.59 points, or 0.33%, to end at 42,374.36. The blue-chip index notched a four-day losing streak, its first since June.

Tesla was the best-performing stock in the broad market index. The electric vehicle manufacturer surged nearly 22% after posting third-quarter results that beat analysts’ expectations, registering its best day since 2013. Molina Healthcare gained 17.7% on better-than-expected earnings and revenue. Whirlpool and UPS also jumped after posting results.

Dragging the Dow was IBM, which fell more than 6% as the company’s consulting revenue narrowly missed analysts’ estimates. Boeing slipped 1.2% after its machinists rejected a new labor contract.

Roughly 160 S&P 500 companies have posted quarterly results so far, but their earnings growth has been underwhelming. The blended growth rate, which tracks reports that have already come out and estimates for those set to report, indicates an overall S&P 500 earnings growth rate of 3.4% from the year-earlier period, according to FactSet. That result came up short of analysts’ projections.

Treasury yields moved lower, easing from three-month highs reached in the previous session. The 10-year Treasury yield topped the 4.25% threshold on Wednesday at the high of the session.

“The pressure on the market has been from the rate side,” said Rob Haworth, senior investment strategist at U.S. Bank Asset Management. “That’s really what has dampened equity market enthusiasm, and you haven’t had big enough earnings news yet to drive the market to a new high … we’re also not seeing as broad a momentum as we were seeing.”

Stocks are coming off a losing session, with the Dow suffering its biggest one-day drop since early December, falling more than 400 points on Wednesday. The S&P 500 shed nearly 1% and the Nasdaq lost 1.6%.

Dow drops more than 350 points as Wall Street's rally takes a breather: Live updates

Aseem — Mon, 21 Oct 2024 19:32:50 +0000

A trader works on the floor of the New York Stock Exchange.

NYSE

The Dow Jones Industrial Average fell Monday, giving back some of the strong gains from last week, as Treasury yields rose and investors awaited new earnings reports.

The S&P 500 slipped 0.3%, while the Dow Jones Industrial Average lost 330 points, or about 0.8%. The Nasdaq Composite hovered just above the flatline.

Consumer and homebuilder stocks were among the biggest losers as fears about higher-for-longer interest rates crept up, with Target and Builders FirstSource each down more than 4%. Lennar also shed more than 3.5%.

The yield on the 10-year Treasury jumped, rising more than 10 basis points to 4.178%.

“Bond yields continue to back up, which implies to me that investors are now thinking that the Fed will be slower to lower interest rates because the economy remains resilient,” CFRA chief investment strategist Sam Stovall said. “As a result, the Fed will likely have a harder time pushing the inflation rate down to its target 2% level in the next year or so.”

Earnings will be key this week with roughly one-fifth of the S&P 500 set to report. Among the companies on deck are Tesla, Coca-Cola and GE Aerospace.

Thus far, the results have been mixed. Of the 14% of S&P 500 companies that have already posted third-quarter results, 79% have beaten expectations, according to FactSet’s John Butters. Analysts have significantly downgraded their earnings expectations for the quarter in recent months.

“I don’t think that we are in the beginnings of an earnings recession or anything like that, but the bar has been set very, very low … rarely does anybody injure themselves falling out of a basement window,” Stovall said. “So with earnings this low, chances are that this will be the 60th quarter out of the past 62 in which actual results exceed end-of-quarter estimates.”

Still, investors are largely optimistic equities still have further room to run, but they are mindful that stretched valuations, particularly ahead of the U.S. presidential election and amid rising geopolitical risks, could also mean further choppiness.

Monday’s moves come after both the S&P 500 and 30-stock Dow registered all-time highs on Friday, cementing a sixth straight weekly advance for both benchmarks.

Here's what investors need to know after GM's capital markets day

suimt — Wed, 09 Oct 2024 14:58:54 +0000

The GM logo is seen on the facade of the General Motors headquarters in Detroit on March 16, 2021.

Rebecca Cook | Reuters

DETROIT — Wall Street reacted to General Motors’ investor day on Tuesday with a shrug.

Executives used the Detroit automaker’s event to focus on broad, near-term updates to the company’s operations in an attempt to separate itself from its competitors amid more challenging market and economic conditions. But it did little to move the company’s stock.

GM believes it is in a unique position to outperform the industry and Wall Street’s expectations with its all-electric vehicles and traditional internal combustion engine vehicles. The company expects to improve profits for both types of vehicles as it targets adjusted earnings next year to be similar to 2024.

“It all starts there: scale, capital efficiency and cost discipline. These will differentiate us from others in our industry, and frankly, from our own past performance,” GM CEO Mary Barra said during the roughly three-hour event from its manufacturing operations in Spring Hill, Tennessee.

GM President Mark Reuss even took jabs at its traditional crosstown rivals Ford Motor and Stellantis. Without naming them, he said GM doesn’t need a “skunkworks” team to develop affordable EVs like Ford and that cutting to profitability, like Stellantis appears to be doing, doesn’t work.

Nonetheless, investors have largely failed to reward GM for being ahead of the curve for domestic EV production as well as outperforming many automakers in the profitability of its traditional gas- and diesel-powered vehicles.

Several Wall Street analysts were unchanged in their opinion and ratings of the automaker after the event, citing continued optimism but a lack of details in its overall strategy.

Shares of GM, Ford and Stellantis in 2024

“A missed opportunity — no strategy, just tactics. GM’s investor day showcased many of the company’s current achievements, but did not provide much insight on strategy,” Bernstein analyst Daniel Roeska wrote Wednesday in an investor note.

Others such as Barclays’ Dan Levy and BofA Securities’ John Murphy said while the event lacked some details, it fortified GM’s positioning compared to competitors.

“GM’s Investor Day yesterday didn’t provide much in the way of sharp shifts in strategy. However, we believe it served as a strong reminder of GM’s balanced and pragmatic approach — a thoughtful combination of ramping on EVs alongside a keen focus on execution and cost while continuing to generate robust shareholder returns,” Levy wrote in a Wednesday investor note.

Shares of GM closed Tuesday essentially unchanged at $46.01. The stock remains up nearly 30% this year, but it has been under pressure of late due to several downgrades and price target adjustments by Wall Street analysts.

Here are several topics investors should know from the event:

“similar range” to the company’s results this year, CFO Paul Jacobson said.

Its targeted adjusted earnings before interest and taxes for 2024 were between $13 billion and $15 billion, or $9.50 and $10.50 per share, up from previous guidance of $12.5 billion to $14.5 billion, or $9 to $10 per share, earlier this year.

Through the first half of 2024, GM earned $8.3 billion in EBIT-adjusted and generated $6.4 billion in adjusted automotive free cash flow.

Jacobson said GM’s capital spend also is expected to be consistent in 2025 with this year. GM’s 2024 financial guidance includes anticipated capital spending of between $10.5 billion and $11.5 billion.

is ultimately dead.

GM will drop the “Ultium” name for its electric vehicle batteries and supporting technologies after spending years promoting the brand as it rethinks its EV and battery operations.

The company said the batteries and the technologies will remain, but the name will be gone, except in production operations such as its “Ultium Cells” joint venture plants with LG Energy Solution.

Instead, GM plans to use a variety of battery chemistries and cell designs, said Kurt Kelty, a former Tesla executive who joined GM as vice president of battery earlier this year.

“GM is evolving to a multifaceted approach,” he said. “This should only help GM strengthen our position of producing more EV models than any other automaker.”

previously announced initiative that’s expected to retire roughly 250 million shares of the automaker.

From 2022 through the end of 2024, GM will have returned about $20 billion to shareholders through share repurchases and dividends, Barra said.

The automaker is targeting to get below 1 billion outstanding shares by early 2025, Jacobson said. It has more than 1.1 billion outstanding shares as of Wednesday morning, according to FactSet.

operations in China.

GM’s operations in China have experienced a decade-long slide in earnings, and executives said they are discussing restructuring options with their China-based partners.

“In China, you’ll begin to see evidence of a turnaround this year, with a significant reduction in dealer inventory and modest improvements in sales and share,” Barra said.

Regarding Cruise, GM said its spending next year is not expected to top this year’s. It did not provide updates on its long-term plans for the troubled robotaxi business.

With GM’s investor day being two days ahead of Tesla’s highly anticipated robotaxi day, Wall Street analysts expected some sort of update on the venture, especially regarding future financing or capital spend for the company.

Hyundai Motor: When asked about GM’s announced non-binding memorandum of understanding with Hyundai, Barra said the teams “are working closely and making progress every week on what will become definitive agreements.”
Chevy Bolt: GM said its next-generation Chevrolet Bolt EV that’s expected next year will be only slightly higher than the 2023 Bolt, which started at $28,795.

PHEVs: GM reconfirmed plans to introduce plug-in hybrid electric vehicles, of PHEVs, in 2027. In the meantime, Reuss, citing single-digit market share, said GM is “not missing on anything right now without PHEVs.”

— CNBC’s Michael Bloom contributed to this report.

Tesla recalls more than 27,000 Cybertrucks to fix rear-view camera delay

Aseem — Thu, 03 Oct 2024 11:21:07 +0000

New Tesla Cybertruck vehicles parked at a logistics drop zone in Seattle, Washington, US, on Thursday, Aug. 22, 2024.

M. Scott Brauer | Bloomberg | Getty Images

Tesla said on Thursday it would recall more than 27,000 Cybertrucks due to delayed rear-view camera images that could impair driver visibility and increase crash risks, adding that a software update would resolve the issue.

The recall affects most Cybertrucks in the U.S. and is the biggest one for the electric truck. Tesla had issued a recall in April to fix a loose accelerator pedal pad and another in June over issues with windshield wipers and exterior trim.

The electric-vehicle maker started deliveries of the Cybertruck in November 2023, after a two-year delay due to production problems and battery-supply constraints. Tesla has not disclosed Cybertruck production or delivery numbers so far.

Tesla CEO Elon Musk launched the Blade Runner-inspired truck to refresh the company’s aging lineup amid slowing EV demand.

Issues with the model are closely watched by investors due to the resources Tesla has invested in its development.

The automaker said on Thursday that the Cybertruck’s system in the affected vehicles might not complete a shutdown process before it is commanded to boot up, resulting in a delay in displaying the rear-view image.

The image may not appear within two seconds of placing the vehicle in reverse, and the display may appear blank for up to six to eight seconds when the vehicle is shifted into reverse, Tesla said in a report with the U.S. National Highway Traffic Safety Administration.

The company said it identified the issue early last month, and all Cybertrucks currently in production have received the software fix.

CEOs are tired of being held responsible for gun regulation

Aseem — Mon, 03 Apr 2023 11:19:35 +0000

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

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Americans have grown used to corporate executives treading the well-worn paths of the Northeast corridor to convene alongside elected officials in Washington, DC, and discuss geopolitics, policy and all that’s in-between.

In 2017, major CEOs from across the country came together to oppose North Carolina’s transgender bathroom law. In 2019, they called abortion bans “bad for business.”

After the deadly attack on the US Capitol on January 6, 2021, many of corporate America’s biggest names denounced the rioters and pledged to halt their political giving.

Recently, more than 1,000 companies promised to voluntarily curtail their operations in Russia in protest of Moscow’s war on Ukraine.

Dick’s Sporting Goods stopped selling semi-automatic, assault-style rifles at stores and Citigroup put new restrictions on gun sales by business customers after the mass shooting at a high school in Parkland, Florida, in 2018.

A year later, after mass shootings at a Walmart in El Paso, Texas, and a nightclub in Dayton, Ohio, Walmart ended handgun ammunition sales.

Corporate leadership has long been vocal on the issue of gun control – in 2019 and again this past summer nearly 150 major companies – including Lululemon, Lyft, Bain Capital, Bloomberg LP, Permanente Medical Group and Unilever – called gun violence a “public health crisis” and demanded that the US Senate pass legislation to address it.

That’s why corporate America’s silence in the wake of the latest mass shooting at a school in Nashville is so jarring. The United States has come to rely on the increasing power of large corporations as political advocates.

But Yale professor Jeffrey Sonnenfeld, a vocal advocate of corporate social responsibility who has a direct line to major CEOs around the globe, said that top executives are forlorn. Their previous efforts haven’t done much to push the needle on gun control legislation and without more backing, they don’t know what else they can do at the moment, he said.

Before the Bell spoke with Sonnenfeld, who runs Yale School of Management’s Chief Executive Leadership Institute, a nonprofit educational and research institute focused on CEO leadership and corporate governance.

This interview has been edited for clarity and length.

Before the Bell: CEOs have been quiet about gun reform since the latest mass school shooting in Nashville, have you heard anything about plans to speak out?

Jeffrey Sonnenfeld: Where is everybody else? Where is all of civil society? CEOs are just one group of people and it’s like we’re turning to them to be our saviors on every topic. They’ve joined causes with valor and nobility but they can’t just be taking cause after cause as if there’s nobody else in society. The social change that happened in the 1960s wasn’t being led primarily by CEOs. Social changes really happened when we saw the interfaith activity of clergy locking arms and canvassing legislators. We saw campuses alive and aroused. Where’s all the student activism?

The CEOs are still the most active even if they’re less active than they were six months ago. They’re not there as hired hands of shareholders to fill the role of politicians and civic leaders. They’re there to join that chorus, but they don’t want to be the only one singing.

So is this what you’re hearing from top CEOs? Have they gotten tired of advocating?

I just got off of a CEO call on voting rights and this morning we had a forum on sustainability – CEOs are still the most active on these fronts. It’s the same thing on immigration reform. If a CEO was working an 18 hour day on a 12 day week, they still couldn’t address all of the issues that need addressing.

The nation’s CEOs are waiting for everybody else to join them. They don’t need to restate something they’ve already stated. They’ve jumped in the pool, where’s everybody else?

So what do you think has led to this complacency amongst Americans and the growing reliance on CEOs to advocate on our behalf?

They’ve taken a very strong stance and they’ve gone out further than the general public. They are where the general public is on surveys, but they’re not where the general public is on action in the streets. So we’re ready for others to now do something. Enough already on saying ‘what are the CEOs doing?’ Social capital is as valuable as financial capital. CEOs understand that in their soul, they want there to be social capital. They want there to be public trust, but they need the rest of civil society to join them. And that’s their frustration.

It sounds like CEOs are frustrated?

Yeah, they’re frustrated.

But don’t these CEOs hold the purse strings in terms of donating to powerful politicians?

You would think that, but since the 2020 elections much less of campaign contributions have come from big business. Since the 2021 run on the Capitol, a lot of businesses either had an official moratorium or they’ve given mere pennies to politicians. The common impression on the street that CEOs are controlling campaign purses strings is 100% wrong.

By CNN’s Chris Isidore

Tesla reported. a modest 4% rise in sales in the first quarter compared to the final three months of last year, despite a series of price cuts on its lower priced vehicles and talk by CEO Elon Musk about strong demand at those lower prices.

The first quarter also marked the fourth straight quarter that Tesla has produced more vehicles than it has delivered to customers. Some of that may be due to the ramp up in production at two new factories, one in Texas, the other in Germany, which opened last spring, and a lag between that increased production and sales.

Tesla said there was an increase in the number of its more expensive models, the Model S and Model X, in transit to Europe, the Middle East and Africa, as well as to the Asia Pacific region.

But it does mean that over the last 12 months Tesla has produced 78,000 more cars than it has sold, suggesting that talk of strong demand by Tesla executives may not be backed up by the numbers.

“Early this year, we had a price adjustment. After that, we actually generated a huge demand, more than we can produce, really,” said Tom Zhu, Tesla’s executive in charge of global production and sales. “And as Elon said, as long as you offer a product with value at affordable price, you don’t have to worry about demand.”