FORD RAISES PROFIT FORECAST DESPITE STEEPER EV LOSSES
Ford Motor delivered healthy profits for the second quarter and raised its profit outlook for the full year, the latest sign that the car business continues to defy Wall Street's gloomy forecasts heading into the year. At the same time, Ford warned Thursday of steeper-than-expected losses in its electric-vehicle business, which has been buffeted by stiff price competition in some parts of the EV market. Ford now expects its EV division to lose $4.5 billion this year, up from an earlier forecast of $3 billion.
Source: The Wall Street Journal
DETROIT 3'S EV GROWING PAINS TEMPER BIG Q2 PROFITS
Robust second-quarter earnings from the Detroit 3 were tempered last week by the growing realization that their pivot to electric vehicles will be slower and costlier than anticipated. While profits and demand remain strong for gasoline-powered vehicles — prompting Ford and GM to raise full-year guidance — Wall Street expressed concern over the companies' EV growing pains, sending shares tumbling at Ford and GM. But executives insisted their long-term electrification plans eventually would pay off.
Source: Automotive News
FORD BLAMES EV PRICE WAR FOR DELAY IN PLANS TO BOOST OUTPUT
Ford Motor Co.'s is throttling back on plans to ramp-up electric vehicle production, pointing the finger at a price war for battery-powered vehicles. The automaker on Thursday said it would need another year to meet a year-end target to reach an annual production rate of 600,000 EVs, which it now expects to reach in 2024. Ford also abandoned plans to be making 2 million EVs a year by the end of 2026.
Source: Bloomberg
JEEP LOOKS TO VEER OUT OF SALES DITCH
The Jeep brand has gone up market in recent years with several pricey new vehicles. Its market share has gone in the other direction. The rugged American brand that spawned the modern SUV has posted lower sales for eight straight quarters. Since mid-2018, Jeep has surrendered significant market share, falling from sixth to ninth in sales among top U.S. brands.
Source: The Wall Street Journal
TESLA HAS ALLEGEDLY BEEN SUPPRESSING RANGE COMPLAINTS
Tesla allegedly equipped its electric cars with misleading range displays and then suppressed owner complaints, according to a Reuters report published Thursday. Citing anonymous sources familiar with make customers feel better when driving away in a newly purchased Tesla.
Reuters said it "could not determine" whether Tesla still uses algorithms that exaggerate indicated range estimates, the matter, the report alleges that, about a decade ago, Tesla began equipping cars with range-estimating algorithms that showed "rosy" projections of driving range on dashboard displays when a car was fully charged, and more realistic range estimates when charge dropped below 50%. The order to exaggerate range estimates allegedly came from Tesla CEO Elon Musk, Reuters reported. The anonymous source cited in the report said Musk "wanted to show good range numbers when fully charged" because it would but reported that the automaker last year became "inundated" with customer complaints about range.
Tesla's solution, according to the report, was to create a special team to cancel customer appointments at service centers if they were related to range complaints.
Alexandre Ponsin, a 2021 Tesla Model 3 owner cited in the report, told Reuters he "was sometimes getting less than half" his car's estimated range, particularly in cold weather, and booked a service appointment believing there was something wrong with the car. EV range can decrease in cold weather, something Tesla has tried to address recently with heat pumps. Ponsin reportedly received two text messages saying "remote diagnostics" had determined the car's battery was fine, and asking to cancel the appointment. Reuters reports that this was the work of a "Diversion Team" based in Las Vegas and tasked with cancelling range-related appointments. Managers reportedly told employees that each cancelled appointment saved Tesla $1,000 and reduced wait times at service centers.
In late 2022, managers allegedly told employees not to run remote diagnostics on vehicles of owners reporting range issues, speeding up the process of cancelling appointments. Reuters reports that "thousands" of customers were told there was nothing wrong with their cars after this policy change, and were instead offered tips on increasing range by changing driving habits.
Tesla maintains more control over the hardware and software aspects of any repair or diagnosis than other automakers, which has led to at least one customer lawsuit alleging unlawful monopolization of repair services.
This isn't the first time Tesla has been accused of being dishonest with range estimates. South Korea earlier this year fined Tesla for minimizing the impact of cold weather on range. It remains to be seen whether these reported claims will lead to any similar actions in the U.S.
Source: Green Car Reports
BMW LIFTS OUTLOOK, WARNS INFLATION AND SUPPLY ISSUES NOT OVER
BMW lifted its annual outlook for its margin on earnings before interest and taxes in the automotive segment on Tuesday but said it foresaw ongoing challenges from supply chain issues and inflation in the second half of the year. The carmaker's forecast mirrored that of competitors such as Mercedes-Benz which also raised their earnings outlook but warned the macroeconomic environment would continue to weigh on output.
Source: Reuters
BATTERY BLOAT COULD BACKFIRE ON ELECTRIC VEHICLE MANUFACTURERS
From 2018 to 2022, the average range of fully electric vehicle models globally jumped from 143 miles (230 kilometers) to 210 miles (337 km). To deliver this, average lithium-ion battery pack sizes increased 10% annually over the same period, going from 40 kilowatt hours to 60 kWh. This rise shows no real signs of letting up. The increase makes sense from an automaker's perspective — consumers in most segments say they want more range. But if left unchecked, this relentless rise in range and accompanying battery-pack sizes will eventually make it very difficult for the battery supply chain to keep pace.
Source: Bloomberg
NOTABLE WHOLESALE PRICE PLUMMET SUBSIDES
Black Book reported another wholesale price decline happening at auctions last week, but the decrease wasn't as significant as analysts spotted earlier this summer. During the stretch that closed on Saturday, Black Book said wholesale values softened another 0.37%, while the estimated average weekly sales rate continued to improve and ticked up to 49%.
Source: Auto Remarketing
TOYOTA PROFIT TOPS ESTIMATES, SENDING SHARES TO ALL-TIME HIGH
Toyota Motor Corp.'s quarterly profit exceeded estimates as improvements in supply of semiconductors and a weak yen helped it capitalize on a global rebound in demand for vehicles. The stock closed at a record high. Operating profit for the three months through June was a record ¥1.1 trillion ($7.7 billion), the world's No. 1 carmaker said in a statement Tuesday. That compared with ¥880 billion projected by analysts. Toyota kept its outlook for operating income for the fiscal year at ¥3 trillion.
Source: Bloomberg
BMW ON EV TARGET BUT 'TOO SOON' TO CALL END OF COMBUSTION ENGINES
BMW said it was raising investment in electrification faster than planned but that it was too soon to set an end date for combustion engine car production, with sales still strong in major growth markets like China and the U.S. The carmaker is close to hitting its target of 15% battery-electric sales this year, beating Mercedes-Benz and Porsche, for whom battery-electric cars have so far made up around 11% of sales.
Source: Reuters
HYUNDAI, KIA RECALL 91,000 US VEHICLES OVER FIRE RISKS...
Urges owners to park outside
Hyundai Motor and Kia said on Thursday they are recalling more than 91,000 newer vehicles in the United States because of fire risks and urged owners to park outside and away from structures pending repairs. The recall covers Hyundai 2023-2024 Palisade, 2023 Tucson, Sonata, Elantra, and Kona vehicles and 2023-2024 Seltos and 2023 Kia Soul, Sportage vehicles.
Source: Reuters
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