The Morning ShiftAll your daily car news in one convenient place. Isn’t your time more important?
Tesla is doing just fine, auto manufacturing is slowly restarting, and regulators still have to rule on the Fiat Chrysler and Peugeot merger. All that and more inThe Morning Shiftfor Monday, May 11, 2020.
Despite a CEO thatis prone to getting mad online, Tesla is doing just fine. One reason is because it was big into online sales before the coronavirus pandemic. Another is because it was big into electric cars before the heavy hitters were, some of whom may have to divert EV development resources because of the pandemic. A third is because investors keep propping up its stock price, valuing it not as a car company (Ford’s stock price as of now: $5.24; Tesla’s: $819.24) but as a tech company. A fourth reason is that Tesla’s well-off customers are less affected by the pandemic.
All that is to say that Tesla stock is up, asAutomotive Newsreports:
Tesla’s stock, despite a brief dip after CEO Elon Musk bizarrely labeled it “too high,” has nearly doubled since Jan. 1, even as its factories in China and California had to close because of the pandemic. Sales continue to climb — Tesla now threatens to crack the top three U.S. luxury brands — and could be further aided if competitors slash spending on costly EV programs.
Tesla has much smaller cash reserves than its established rivals, but its resiliency in the face of this latest threat, experts say, is explained by Wall Street’s infatuation with its aggressive product strategy and forward-thinking sales model.
“So much of stock price depends on the future,” Jessica Caldwell, executive director of insights at Edmunds, told Automotive News. “Their investments in electrification and autonomous technology represent where the future is heading. In the wake of everyone else being more cautious because they have to be, they continue to forge ahead. It comes down to who has potential.”
A fifth reason: the Model Y, which Musk says has been profitable from the get-go.
Another product in Tesla’s portfolio, especially one in the popular crossover space, could prove troublesome for rival luxury brands.
With limited production of the Y, Tesla surpassed Audi by roughly 11,000 vehicles in first-quarter U.S. sales, according to estimates from the Automotive News Data Center, and is gaining on Lexus, BMW and Mercedes-Benz.
A continued ramp-up in Model Y production should further close that gap. “It definitely does create more competition with the luxury brands,” Caldwell said.
I’ll confess to being entertained over the weekend when Elon said he was taking his toysand going to Texas and/or Nevada.
Production is restarting this week at some factories in Michigan, as automakers are desperate to get going again, and look for any good news.
Clearly, if it’s restarting production, the automotive industry has all the kinks worked out and a clear plan on how everything will work, right? Not so much! Apparently we’re all figuring this out as we go along, asAutomotive Newsreports:
Despite the eager attitude, automakers are likely to encounter pain points with smaller suppliers farther down the supply chain, warned Dave Andrea, automotive principal at Plante Moran.
“It’s not just your assembly plant and supply chain ramping up,” Andrea told Automotive News. “We will find the pinch points where supply chains intersect two or three levels down in the chain.”
Andrea suggested that North America might end up in a better competitive position by being the last major developed auto region to succumb to the virus. Because the region shut down after China and Europe, it is in a better parts inventory situation, he argued. “The pump is partially primed and ready to start,” he said. “Regions hit early may have gone down with a dry pipeline.”
Hyundai and Kia’s U.S. plants started last week at reduced capacity, and Volvo Cars USA said it aims to restart its assembly plant May 11.
BMW’s plant in Spartanburg, S.C., also has now resumed.
“We have restarted production with a careful, measured approach,” a BMW spokesman said. “We have no intention of shutting down production again.”
BMW will never, ever shut down production again, nothing will stop it now.
Sales in Chinawere up in Aprilfor the first time in nearly two years, but that could be a short-term spike.
But the good news could prove to be short-lived, the association warned.
“We don’t see this month’s growth as a normal phenomenon, as the domestic epidemic eased and consumers delayed purchases until recently,” said Chen Shihua, the association’s deputy secretary-general. “It is difficult to guarantee positive growth in the coming months.”
The April numbers got a boost from commercial vehicles such as trucks and buses, whose sales were up 32% in April, hitting a record. Commercial-vehicle sales in China typically rise when the government makes efforts to stimulate the economy. Meanwhile, passenger-car sales were down 2.6%.
After sales crashed 42% in the first quarter of 2020, analysts are forecasting total sales of about 23 million vehicles this year, which would be the market’s weakest performance since 2013.
This merger has taken just about forever, but in realityit only happened last year. EU regulators, meanwhile, still have to approve it.
Fiat and PSA sought EU approval on Friday, the Commission site showed.
EU competition enforcers can approve the deal with or without conditions or open a full-scale investigation of about four months following the end of the preliminary review should they have deep concerns.
Kathleen DuRoss Ford was 80. The cause was not clear.
DuRoss Ford, 80, was a former model from Detroit whose father had been a factory worker. She married Henry Ford II, the grandson of Henry Ford and a giant in automotive history in his own right, in 1980. It was her second marriage — her first husband died in a car crash returning from band practice — and his third. Henry Ford II, who was also known as Hank the Deuce, led Ford as CEO and president and was credited with reviving the company’s fortunes.
A Ford spokesman said the company would not comment on DuRoss Ford’s death.
In recent years, DuRoss Ford had been caught in the middle of an ugly court battle between attorney Frank Chopin, who was her caretaker, and her daughters, Kimberly DuRoss and Deborah DuRoss Guibord. The daughters, along with a number of friends and relatives, said he was abusive, controlling and had cut them out of her life, and they had sought to remove him. Chopin’s side said the dispute was about money. A judge in Florida ruled in Chopin’s favor in March of this year.
I was gonna climb underneath my car this past weekend to inspect what many of youinformed mewas a broken spring, but then I didn’t, mainly because I started watching old clips of Jackass and I’m back on The Legend Of Zelda: Breath Of The Wild, and, my word, there is so much to do.