- Here’s Why Baron Funds Remain Optimistic in Rivian Automotive (RIVN) Yahoo Finance
- Rivian On Path To Profit Despite Musk’s Doubts? Analyst Tells Why EV Startup Can Achieve Goal By End Of Next Year – Lucid Gr (NASDAQ:LCID), Tesla (NASDAQ:TSLA), Rivian Automotive (NASDAQ:RIVN) Benzinga
- Rivian earnings: What to expect from the EV maker struggling to become profitable MarketWatch
- Rivian Q3 earnings preview: EV demand, profitability path key items to watch Yahoo Finance
- Why Rivian Plunged 33.2% in October The Motley Fool
- View Full Coverage on Google News
Tag Archives: Automotive
Step Aside Ford, GM: New Ram EV Pickup Boasts 500-Mile Range – Stellantis (NYSE:STLA), Tesla (NASDAQ:TSLA), Ford Motor (NYSE:F), General Motors (NYSE:GM), Rivian Automotive (NASDAQ:RIVN) – Benzinga
- Step Aside Ford, GM: New Ram EV Pickup Boasts 500-Mile Range – Stellantis (NYSE:STLA), Tesla (NASDAQ:TSLA), Ford Motor (NYSE:F), General Motors (NYSE:GM), Rivian Automotive (NASDAQ:RIVN) Benzinga
- The 2025 Ram 1500 REV’s 14,000-Pound Max Tow Target Is More Impressive Than You Realize The Drive
- How Ram went from the wild-looking REV Concept to the production pickup Autoblog
- Electrification cannot ‘be a limitation,’ Ram Brand CEO explains Yahoo Finance
- Ram Brands CEO on EV charging networks: ‘We’re going to get there faster than you think’ Yahoo Canada Finance
- View Full Coverage on Google News
Why EV Stocks Lucid Group, Rivian Automotive, Tesla Are Rallying Friday
Lucid Group Inc LCID shares were ripping Friday and halted on a circuit breaker to the upside in early afternoon trading following rumors circulated by traders the Saudi Public Investment Fund is planning to buy out the remainder of the electric vehicle company.
Benzinga has contacted the Public Investment Fund and Lucid Group for comment on the rumors.
Rivian Automotive’s RIVN stock traded higher Friday afternoon, trading up more than 7% from Thursday’s close.
Tesla Inc TSLA was also trading higher by about 10% Friday afternoon after reporting strong earnings earlier in the week.
In addition to the strong earnings in the electric vehicle space, the Personal Consumption Expenditure index, one of the Fed’s key measures of inflation, came in cooler than expected Friday morning, and is at its lowest level since October 2021.
This is another sign that inflation is cooling and the Fed may be able to ease its rate hikes at some point this year.
The cooling inflation should be good news for most equities, but especially growth stocks which have been hit the hardest by the Fed’s interest rate hikes.
LCID, RIVN, TSLA Price Action: At the time of publication, Lucid shares were trading 51.4% higher. Shares of Rivian were up 11.6% and Tesla shares were up 9.8%.
Photo courtesy of Lucid Group.
Elon Musk, Tesla Poised for Trial Over Tweets Proposing to Take Car Maker Private
Elon Musk
is headed to court in a securities-fraud trial over tweets from 2018 in which he floated the possibility of taking
Tesla Inc.
private, with in-person jury selection poised to begin Tuesday.
The class-action case originates with an Aug. 7, 2018 tweet in which the Tesla chief executive said, “Am considering taking Tesla private at $420. Funding secured.”
An investor,
Glen Littleton,
sued Tesla, Mr. Musk and members of Tesla’s board at the time, alleging that Mr. Musk’s tweets were false and cost investors billions by spurring swings in the prices for Tesla stock, options and bonds. In court filings, Mr. Musk has said he was indeed considering taking Tesla private and believed he had the support of Saudi Arabia’s sovereign-wealth fund to do so. The deal, which would have been valued around $72 billion, never materialized.
U.S. District Judge
Edward Chen,
who is overseeing the San Francisco jury trial that is scheduled to run through Feb. 1, has ruled that Mr. Musk’s tweets about taking the company private weren’t true and that he acted recklessly in making them.
Questions for the jury include whether Mr. Musk’s tweets were material to investors and whether he knew they were untrue.
The case is unusual in that securities-fraud cases usually resolve before going to trial, such as through a settlement, said
Jill Fisch,
a securities-law professor at the University of Pennsylvania. The defendants in this case face “an uphill battle” in light of the judge’s pretrial decision about the veracity of Mr. Musk’s statements, she said.
Attorneys for the lead plaintiff didn’t respond to a request for comment, nor did an attorney for Tesla, Mr. Musk and the other board members.
Mr. Musk is expected to take the stand as early as Wednesday, some two months after he did so in Delaware in a trial over his pay package at Tesla. In 2021, he also appeared before Delaware’s business-law court to defend Tesla’s roughly $2.1 billion 2016 takeover of home-solar company SolarCity Corp.
Also on the list of possible witnesses are Tesla board chair
Robyn Denholm,
board members
Ira Ehrenpreis,
James Murdoch
and
Kimbal Musk
—the CEO’s brother. The head of investor relations,
Martin Viecha,
also may be called.
SHARE YOUR THOUGHTS
What do you think will be the outcome of the case over Elon Musk’s 2018 Tesla tweet? Join the conversation below.
This week’s trial comes at a busy time for Mr. Musk, who has been scrambling to turn around Twitter Inc. after buying the social-media company last fall in a deal valued at $44 billion. His rocket company SpaceX is pushing for the first orbital launch of a new rocket Mr. Musk wants to use for deep-space missions.
Tesla, meanwhile, has slashed prices across its vehicle lineup, with some of last week’s cuts in the U.S. nearing 20%, in a bid to juice demand. The company’s stock has fallen roughly 70% since its peak in November 2021, erasing around $850 billion in market value. Mr. Musk’s personal wealth has fallen more than $200 billion in that time, according to the Bloomberg Billionaires Index.
Court proceedings involving Mr. Musk can be feisty. In the SolarCity case, for example, Mr. Musk called opposing counsel a “bad human being.”
Tesla has reduced prices across its vehicle lineup in an effort to boost demand.
Photo:
Jay Janner/USA TODAY NETWORK/Reuters
In advance of this week’s trial, Mr. Musk asked the court to move the trial to Texas on the basis that potential jurors in San Francisco could be biased against him. Judge Chen rejected the request.
“It isn’t that hard it seems to me to find 15 people,” he said.
The court requires nine jurors and six alternates to proceed with the case. Roughly 190 potential jurors were asked to fill out questionnaires about their views of Mr. Musk and other issues. The court plans to bring in about 50 of them for further questioning Tuesday.
Opening arguments could start as early as Tuesday after the jury is selected.
The lead plaintiff is seeking damages for investor losses he alleges stemmed from Mr. Musk’s and Tesla’s statements. Tesla stock closed up 11% the day Mr. Musk initially tweeted about potentially taking Tesla private, later giving back all those gains and falling further as questions emerged about the deal.
The defendants have said the plaintiff won’t be able to prove to a jury that the statements were materially false. Mr. Musk was considering taking Tesla private, the defendants have said, even if some of his assertions about the deal may not have been literally accurate.
Defendants, in a trial brief, said Mr. Musk believed he had secured backing to take the car maker private from Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund. A lawyer for the defendants said Friday that his team had chosen not to enforce subpoenas calling on fund representatives to testify. The sovereign-wealth fund didn’t respond to a request for comment.
Mr. Musk and Tesla each agreed in 2018 to pay $20 million to settle civil charges brought by the Securities and Exchange Commission over the same tweets. Mr. Musk also agreed to step down as chairman of the company, while remaining CEO. He later said in legal filings that he felt pressured to settle with the SEC. Last year, a federal judge denied Mr. Musk’s request to scrap his settlement.
Write to Rebecca Elliott at rebecca.elliott@wsj.com and Meghan Bobrowsky at meghan.bobrowsky@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Several Top Rivian Executives Depart the Electric-Vehicle Startup
Several top executives at
Rivian Automotive Inc.,
RIVN -1.02%
including the vice president overseeing body engineering and its head of supply chain, have left the EV startup in recent months, as the company exits a year in which it fell short of its production targets.
The departures, confirmed by a Rivian spokeswoman, are the latest developments in what has been a challenging period for Rivian, which has been rolling out its first all-electric models but last year missed a critical milestone of manufacturing 25,000 vehicles. The company said it was off its goal by about 700 vehicles in part because of difficulty getting parts.
Rivian’s stock has also tumbled since its blockbuster initial public offering in November 2021, down roughly 79% through Tuesday’s close.
The executives who have left were some of Rivian’s longer-tenured employees. Among them is Randy Frank, vice president of body and interior engineering, and Steve Gawronski, the vice president in charge of parts purchasing. Both had departed around the beginning of this year.
Mr. Frank joined Rivian in 2019 from
Ford Motor Co.
Mr. Gawronski joined in 2018 from the autonomous vehicle startup Zoox.
Another early employee, Patrick Hunt, a senior director in the strategy team, left the company late last year. Mr. Hunt joined Rivian in 2015.
Rivian’s general counsel, Neil Sitron, departed in September after 4½ years with the company, which was founded in 2009.
The Rivian spokeswoman said the company wants to ensure the startup has the talent and staff it needs to ramp up production. The company declined to comment on the individual circumstances of the departures. Efforts to reach the former employees weren’t immediately successful.
“We continue to attract world class talent to our company as our business needs change,” she said.
The departures mark the latest shake-up at the top of Rivian, which has brought in new executives to oversee the company’s manufacturing operations. The company’s first full year of factory production was marred by supply-chain troubles and difficulties getting the assembly line to run at full speed.
Tim Fallon, former head of
Nissan Motor Co.
’s factory in Canton, Miss., was hired in early 2022 to run Rivian’s sole factory in Normal, Ill.
In June, Rivian hired Frank Klein as chief operating officer, from contract manufacturer
Magna Steyr.
In a November email to employees reviewed by the Journal, Mr. Klein wrote that with Mr. Gawronski’s exit, the company was taking the opportunity to make some organizational changes to ensure it can support the increased complexity that the group will handle in coming years.
Mr. Klein added Rivian was reorganizing its supply-chain management, putting one vice president in charge of the supply chain and logistics, and another in charge of parts procurement.
He also announced that Rivian had hired Andreas Reutter from tool maker
Stanley Black & Decker Inc.
to oversee Rivian’s supply-chain logistics.
The changes at the top of Rivian come as it attempts to transform from an upstart looking to raise capital to a mass manufacturer with ambitions to become one of the world’s largest auto makers.
Its first all-electric models, the R1T pickup truck and R1S sport-utility vehicle, are relatively new. The company has only been building cars at its Illinois factory since late 2021. Before then, it had never built or sold a single vehicle for retail.
As part of its expansion, Rivian went on a hiring spree, growing rapidly from about 1,200 workers in 2019 to around 14,000 employees by the summer of last year and has only recently begun creating positions that exist at many companies.
In April, Anisa Kamadoli Costa was hired as chief sustainability officer from jewelry maker Tiffany Inc. In October, Rivian hired a former Capital One Financial Corp. executive, Diane Lye, as its first chief information officer.
As Rivian has struggled to increase factory output, it has come under pressure to trim spending. Last summer, the company laid off around 6% of its workforce and cut spending on many of its programs.
The company became focused on bringing production of its current set of vehicles up to speed. It also makes an electric delivery van that it sells to Amazon.com Inc.
In an example of the young car maker’s shifting priorities, Rivian suspended negotiations with Mercedes-Benz AG over a proposed van partnership in Europe, which had been an expansion target for Chief Executive RJ Scaringe. Rivian said the decision came after re-evaluating its opportunities for growth.
The company reported a net loss of $5 billion for the first nine months of 2022, and its cash pile fell to $13.8 billion at the end of September, down from $15.46 billion in June. Rivian is scheduled to report its full-year results on Feb. 28.
Write to Sean McLain at sean.mclain@wsj.com and Nora Eckert at nora.eckert@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
New 2023 EV tax incentives: How they work, which cars qualify, and where to get even more savings
Quick facts about federal incentives for electric cars:
- The government delayed some rules for EV tax credits until March 2023.
-
Select GM
GM,
+2.60%
and Tesla
TSLA,
+2.47%
electric vehicles became eligible (again) for federal tax incentives in January 2023. - Many electric cars do not qualify, but we help you find the ones that do.
Consumers considering an electric vehicle right now may want to weigh how tax credits on zero-emissions cars work and how they could affect any upcoming buying decisions.
The Inflation Reduction Act signed in August 2022 includes electric vehicle tax credits provisions set to reshape how Americans buy electric cars and plug-in hybrids.
Read on to learn the impact. We will tell you about the new changes to federal tax incentives for electric cars. The new tax credits can help defray the cost of buying a zero-emission vehicle when combined with state and local rebates.
How the new EV tax credits work
According to Kelley Blue Book research, a new electric car’s average transaction price came in at about $65,000 in November, nearly a 9% jump from a year ago. The industrywide average that includes gas-powered vehicles and electric cars reached about $48,900 in the same timeframe.
- Extends $7,500 tax credit. The Inflation Reduction Act extends the current incentives of up to $7,500 in tax credits for select electric cars, plug-in hybrids, and hydrogen-powered vehicles that meet its qualifications. The federal government continues to update the list of qualifying vehicles.
- Discount up front. In the future, it’s possible you can qualify to get your EV tax credit at the time of purchase on new vehicles, though if the dealership does not offer it immediately, you can still request the credit on your taxes.
- Caps EV price tags. The new incentives restrict qualifying vehicles to low-emissions trucks, SUVs, and vans with manufacturer’s suggested retail prices of up to $80,000 and cars up to $55,000.
- No limits for manufacturers. As of Jan. 1, 2023, manufacturers like GM and Tesla were no longer limited on incentives to the first 200,000 EVs sold, which was the case under the old tax credits.
- Used electric vehicle rebate. Anyone considering a used electric car under $25,000 could obtain a new $4,000 tax credit, subject to income and other limits. To qualify, used cars must be two model years old. The vehicle also must be purchased at a dealership. The vehicle also only qualifies once in its lifetime. Purchasers of used vehicles can only qualify for one credit every three years, and to qualify, individuals must make $75,000 or less, or $112,500 for heads of households and $150,000 for joint return filers. The credit ends in 2032.
- Income caps to qualify. The rebates are limited to individuals reporting adjusted gross incomes of $150,000 or less on taxes, $225,000 for those filing as head of household, and $300,000 for joint filers.
- Ineligible cars become eligible. Additionally, the measure allows carmakers like Tesla and General Motors, which had run out of available credits under the old plan, to be eligible for them again in January 2023. However, many of their products would still not qualify due to car price caps.
- New rules on manufacturing locations. To qualify for the subsidy, electric car batteries must be manufactured in the U.S., Canada, or Mexico, while the batteries’ minerals and parts must also come from North America to qualify. Cars with Chinese-made battery components would be ineligible. These rules render many current EVs ineligible. This requirement phases in over time. That means some cars eligible now could become ineligible over time unless manufacturers change their supply chains. However, the U.S. Treasury Department delayed until March the regulations that govern where battery minerals and parts must be sourced.
- Some leased vehicles may qualify.
- Hydrogen fuel-cell cars remain eligible. The $7,500 credit also applies to hydrogen fuel-cell cars like the Toyota Mirai or Hyundai Nexo. However, those make sense only for buyers who live near one of America’s few hydrogen refueling stations. Those stations are mostly concentrated in California.
Learn more: What is EV, BEV, HEV, PHEV? Here’s your guide to types of electric cars
What the old EV tax credits provided
Before the Inflation Reduction Act, buyers could claim a tax credit on just the first 200,000 electric cars a manufacturer sold. That meant that the most popular models lost the credit. The incentive did not restrict income or purchase prices.
The old tax credits also applied to plug-in hybrids and fuel cell vehicles, but not used vehicles.
President Biden signed the act into law on Aug. 1, 2022. Most of its provisions kicked in on Jan. 1, 2023. That created a brief window when the law required qualifying cars to be built in North America, but the 200,000-car-per-manufacturer limit still applied. If you bought an electric car between Aug. 16, 2022, and Jan. 1, 2023, it qualified for a credit only if it was built in North America by a manufacturer that hadn’t sold 200,000 or more qualifying cars.
Tesla and General Motors’ electric car tax credits were reinstated in January. So if you have your heart set on a Tesla Model 3 or perhaps a Cadillac Lyriq, now is the time to act.
Also see: 2.1 million EVs and plug-in hybrids on U.S. roads, and here’s how much gas they’ve saved
List of 2023 electric vehicles that qualify
According to the U.S. Internal Revenue Service, this is the latest list of electric and plug-in hybrid vehicles that qualify if purchased after Jan. 1, 2023. The site notes that several manufacturers had yet to submit information on specific eligible makes and models and for users to check back for updated information.
| Vehicle | MSRP Limit |
| Audi Q5 TFSI e Quattro PHEV | $80,000 |
|
BMW BMW, +0.07% 330e |
$55,000 |
| BMW X5 eDrive 45e | $80,000 |
|
Ford F, +2.69% Escape PHEV |
$80,000 |
| Ford E-Transit | $80,000 |
| Ford F-150 Lightning | $80,000 |
| Ford Mustang Mach-E | $55,000 |
| Lincoln Aviator Grand Touring | $80,000 |
| Lincoln Corsair Grand Touring | $55,000 |
| Chevrolet Bolt EV | $55,000 |
| Chevrolet Bolt EUV | $55,000 |
| Cadillac Lyriq | $55,000 |
|
Nissan NSANY, +2.85% Leaf |
$55,000 |
|
Rivian RIVN, -0.97% R1S |
$80,000 |
| Rivian R1T | $80,000 |
| Chrysler Pacifica PHEV | $80,000 |
| Jeep Wrangler 4xe | $80,000 |
| Jeep Grand Cherokee 4xe | $80,000 |
| Tesla Model 3 | $55,000 |
| Tesla Model Y 7-Seat Variant | $80,000 |
|
Volkswagen VWAGY, +2.00% ID.4 |
$55,000 |
|
Volvo VLVLY, +3.20% S60 T8 Recharge PHEV |
$55,000 |
State and local incentives near you
Though the federal government’s effort makes up the lion’s share of government EV discounts, some states and local governments offer incentive programs to help new car buyers afford something more efficient. These can be tax credits, rebates, reduced vehicle taxes, single-occupant carpool-lane access stickers, and exemptions from registration or inspection fees.
States like California and Connecticut offer broad support for electric vehicle buyers. However, Idaho, Kentucky, and Wyoming are among the states offering no support to individual EV buyers. The U.S. Department of Energy maintains an interactive list of state-level incentives, while Plug In America posts an interactive map of EV incentives.
Also read: What California’s ban on gas cars could mean for you—even if you don’t live there
Your electric utility may help
Lastly, it’s not just governments that can help you with the cost of a new EV. Some local electric utilities provide incentive programs to help buyers get into electric vehicles. After all, they’re among the ones that benefit when you turn your fuel dollars into electricity dollars.
Read: 3 reasons the Hyundai Ioniq 6 makes the Tesla Model 3 seem a bit boring
Some offer rebates on cars. Others offer discounts on chargers or install them free when you sign up for off-peak charging programs.
For example, the Nebraska Public Power District offers a $4,000 rebate to customers who purchase a new electric car.
This story originally ran on KBB.com.
Elon Musk Sends Subtle Message to Disenchanted Tesla Shareholders
Elon Musk is used to facing critics, haters and detractors.
He even likes these battles very much.
Sometimes he even tends to provoke his supposed enemies. The Techno King, as he’s known at Tesla (TSLA) – Get Free Report, likes to turn his opponents’ attacks into counterattacks. The serial entrepreneur is never as lethal as when he is on defense.
These adversaries he knows them. He knows their angles of attack. Certainly some of these criticisms annoy him but he always finds the line of response to repel the detractors.
He can also count on his legion of fans, many of whom are Tesla die-hard fans. They believe in his promises of transforming the world and beyond our civilization. They applaud his iconoclastic side and do not hesitate to cry genius when he announces a new product. The billionaire always knew he could count on these admirers.
The Revolt of the Retail Investor
But what he never anticipated was that some of these fans would come after him. He therefore never prepared for it because he always counted on their loyalty to him. It turns out that Musk was wrong.
For several weeks now, the CEO of Tesla has been the target of repeated criticism from some retail investors. Investor Leo KuGuan, who is the car maker’s third largest individual shareholder after Musk and Oracle (ORCL) – Get Free Report co-founder Larry Ellison, went so far as to sound a revolt against Musk.
“I am 100% in Tesla bc I believe in Elon Musk and Tesla,” KoGuan wrote on Twitter on Jan. 7. “But he is killing SH and Tesla. If I knew I wouldn’t invest in Tesla.”
“Elon invested ≈$200mm but took out $40B, Larry invested $1B, I invested over $3B, I have no choice but to act and speak out. I cry out to U for help!”
The criticisms of these investors are the consequence of Tesla’s stock market rout. In 2022, Tesla stock lost 65% of its value, translating to more than $600 billion in market capitalization evaporated in a year. Tesla’s market value is currently $357 billion, down from over $1 trillion at the start of 2022. Over the first four trading sessions of 2023, Tesla shares lost 8.2% to $113.06.
While Musk attributes this stock market disaster to macroeconomic factors like the Federal Reserve’s aggressive interest rate hike to fight inflation and the energy crisis in Europe, many Tesla shareholders believe that his acquisition of Twitter for $44 billion is the big problem.
They claim that when Musk set his sights on the social media platform, he completely left Tesla behind. Worse, he has alienated many Tesla buyers by attacking progressives and Democrats on Twitter regularly.
Tesla Outperforms Its Rivals
Retail investors together own 41.9% of Tesla shares as of Dec. 5, according to WallStreetZen. Institutional investors hold the biggest block with 43.01% of the shares. The balance is held by the company’s executives, ie 15%.
While Musk once responded to some criticism a while back, he’s been quiet lately. This is no doubt due to the fact that he must observe the quiet period until the publication of the company’s earnings on January 25. Until that date, the management team musk remain silent so as not to influence the share price to the benefit of certain shareholders or to the detriment of others.
But Musk has just found a subtle and striking way to respond to the criticism, which has turned violent in recent days. The entrepreneur has just retweeted a chart which shows that of all the major automakers present on the American market, only Tesla and General Motors (GM) – Get Free Report have managed to increase their sales of light vehicles in 2022 compared to 2021. All the rest of the vehicle manufacturers have seen their sales decrease compared to 2021.
Tesla saw its sales increase by 44% over one year while those of GM only increased by 3%.
Musk said nothing else.
GM’s U.S. Sales Recovered From Early 2022 Woes to Post Full-Year Rise
The U.S.’s largest auto makers confronted another challenging year in 2022 with supply-chain snarls and poorly stocked dealership lots denting sales results and concerns mounting about an economic downturn.
The Detroit auto maker also retook its U.S. sales crown from
Toyota Motor Corp.
TM -0.65%
, outselling its Japanese rival by about 165,630 vehicles last year.
Toyota had overtaken GM in 2021 as the U.S.’s top-selling auto maker, an upending of the traditional pecking order that was largely due to parts shortages that both car companies viewed as temporary.
Toyota said its U.S. sales were down 9.6% in 2022, and
Hyundai Motor Corp.
closed last year with a 2% decline.
Most other car companies report throughout the day Wednesday.
Ford
plans to report 2022 sales results Thursday.
Industrywide, U.S. auto sales are projected to total 13.7 million vehicles in 2022, the lowest figure in more than a decade and an 8% decrease from the prior year, according to a joint forecast by J.D. Power and LMC Automotive. Sales are expected to remain well below prepandemic levels of roughly 17 million.
The drop-off marks a reversal for a sector that started the year hoping historically low interest rates and an end to parts shortages would fuel a rebound in sales. Instead, vehicles continued to be in short supply as car makers mostly waited for scarce computer chips. Russia’s invasion of Ukraine, a key supplier of auto parts, added to the supply-chain troubles.
A prolonged shortage of semiconductors created pent-up demand for new vehicles, which meant that cars and trucks went to waiting buyers almost as soon as they hit the dealer lot. The lack of availability left buyers paying top dollar for the rides they could secure, pushing the average price paid for a vehicle in December to a near record high of $46,382, according to J.D. Power.
The record high prices buoyed auto maker profits last year despite shrinking sales volume and insulated the industry from a broader decline in consumer spending.
Now, while some supply constraints are easing, auto executives are confronting other obstacles, such as rising interest rates and soaring materials costs. Inventory levels are bouncing back, putting pressure on car companies to resist the kinds of profit-damaging discounts that have been historically used to counter slowing demand.
Photos: The EV Rivals Aiming for Tesla’s Crown in China
Some analysts caution that it is still too early to tell if rising prices are pushing buyers away. Heavy snowfall in large parts of the northern U.S. weighed on December sales, making it hard to see the impact of higher prices, JPMorgan analysts wrote in a note to clients.
Still, there are early signs that demand might be slowing, even for the hottest car makers.
Tesla Inc.
reported Monday that it fell short of its growth projections last year, in part because of Covid-related shutdowns at its Shanghai factory and changes in the way it manufactures and distributes vehicles.
Analysts have pointed to decreased wait times for Tesla vehicles as a sign of softening demand. Tesla offered a rare discount on some of its vehicles if buyers agreed to take delivery before the end of 2022.
Electric-vehicle sales accounted for 3% of the U.S. retail market in 2021 and nearly 6% in 2022, according to J.D. Power.
Executives have been investing billions of dollars on new models and factories, in the belief that sales will continue to expand rapidly over the next decade.
But rising prices for raw materials used in lithium-ion batteries pushed up EV prices throughout 2022, and some executives warned of a looming battery shortage.
General Motors cut its EV sales target for 2023 because of a slower-than-expected increase of battery production.
The semiconductor shortage, while easing for some other sectors, such as smartphones and personal computers, remains a challenge for autos, in part because car companies typically use inexpensive, commodity silicon for vehicles. Toyota, citing a lack of chips, cut its production outlook for the current fiscal year through March.
Falling used-car values are also discouraging to potential buyers, who have trade-ins and are looking to use them to offset the higher cost of a new vehicle.
SHARE YOUR THOUGHTS
What is your outlook on the auto industry for 2023? Join the conversation below.
That bodes poorly for sales this year, as retailers worry that buyers who were unable to buy a car as a result of shortages will now be priced out of the market, according to a survey of dealers conducted by Cox Automotive.
The research site Edmunds expects new-car sales to hit 14.8 million in 2023, a marginal increase from last year but well below prepandemic levels. A combination of rising rates, inflation and economic turmoil could push vehicles out of reach for many buyers, Edmunds said.
Write to Sean McLain at sean.mclain@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Rising Power Prices in Europe Are Making EV Ownership More Expensive
BERLIN—Rocketing electricity prices are increasing the cost of driving electric vehicles in Europe, in some cases making them more expensive to run than gas-powered models—a change that could threaten the continent’s electric transition.
Electricity prices have soared in the wake of Russia’s invasion of Ukraine, in some cases eliminating the cost advantage at the pump that EVs have enjoyed. In some cases, the cost difference between driving both types of cars 100 miles has become negligible. In others, EVs have become more expensive to fuel than equivalent gasoline-powered cars.
The price rises for power, which economists expect to last for years, remove a powerful incentive for consumers who were contemplating a switch to EVs, which used to be much cheaper to run than combustion engines.
Coming just as some governments are removing subsidies for EV buyers, this change could slow down EV sales, threaten the region’s greenhouse-gas emission targets, and make it hard for European car makers to recoup the high costs of their electric transition.
In Germany,
Tesla
has raised supercharger prices several times this year, most recently to 0.71 euros in September before falling somewhat, according to reports from Tesla owners on industry forums. There is no public source to track prices on Tesla superchargers.
At that price, drivers of Tesla’s Model 3, the most efficient all-electric vehicle in the Environment Protection Agency’s fuel guide in the midsize vehicle category, would pay €18.46 at a Tesla supercharger station in Europe for a charge sufficient to drive 100 miles.
By comparison, drivers in Germany would pay €18.31 for gasoline to drive the same distance in a Honda Civic 4-door, the equivalent combustion-engine model in the EPA’s ranking.
Tesla didn’t immediately respond to requests for comment.
The change has been particularly notable in Germany, Europe’s largest car market, where household electricity cost €0.43 per kWh on average in December. This puts it well ahead of France, where consumers paid €0.21 per kWh in the first half of the year, but behind Denmark, where a kWh cost €0.46, according to the German statistics office.
The cost of electricity isn’t the only factor that can make an EV cheaper or more expensive to run than a gas-powered car. The price of the car, including potential subsidies, the cost of insurance and the price of maintenance all play a role in the cost equation over a car’s lifetime.
Maria Bengtsson, a partner at Ernst & Young responsible for the company’s EV business in the U.K., said studies of the total cost of owning an EV now show that with much higher electricity prices, it will take longer for EVs to become more affordable than conventional vehicles.
“When we looked at this before the energy crisis, we were looking at a tipping point of around 2023 to 2024. But if you assume you have a tariff going forward of $0.55, the tipping point then moves to 2026.”
If costs for operating EVs rise again, the tipping point would be pushed even further into the future, she said.
So far, there is no sign that the higher costs to charge electric cars has affected EV sales. Sales of all-electric cars totaled 259,449 vehicles in the three months to the end of September, up 11% from the previous quarter and 22% from the year earlier, according to the European Automobile Manufacturers’ Association. In the third quarter, all-electric cars accounted for 11.9% of total new vehicle sales in the EU.
There is no relief in sight for EV users. In Germany, power prices have risen by a third from €0.33 per kWh in the first half of this year, according to Germany’s federal statistics office, and some power companies have announced prices will increase to more than €0.50 per kWh in January.
The German government’s independent panel of economic experts forecast that in the medium term these prices are likely to decline but won’t return to precrisis levels, meaning that higher costs for EV owners are here to stay.
Rheinenergie, a municipal utility in Cologne, said in November that it would raise its prices to €0.55 per kWh in January. In October, EnBW, a Stuttgart-based regional power company, raised its prices for a kWh of electricity to €0.37, up 37% from the previous month.
The most expensive way to charge an EV in Europe is on one of the fast-charging networks. Operators such as Tesla, Allego and Ionity have built roadside charging stations along major highways, where EV owners can drive up, plug in, and charge their batteries in as little as 15 minutes.
Fuel-economy estimates calculated by the EPA and current charging and gas prices in Europe show that some conventional vehicles are now cheaper to fuel with gasoline than equivalent electric models using fast-charging stations.
In the subcompact segment of the EPA’s 2023 Fuel Economy Guide, the Mini Cooper Hardtop was the most efficient model among EVs and gasoline-powered cars.
A 100-mile ride cost the Mini EV owner €26.35 at the Allego fast-charging network, which charges €0.85 per kWh. The conventional Mini cost €20.35 to pump enough fuel to accomplish the same journey.
Mini and its owner,
Bayerische Motoren Werke AG
, didn’t immediately respond to a request for comment.
In the small two-door SUV category, the gasoline-powered Nissan Rogue handily beats the Hyundai Kona Electric, at a cost difference of €19.97 to €22.95. The Subaru Ascent standard SUV with four-wheel drive costs less to drive 100 miles than the Tesla Model X.
If an EV owner only charges their vehicle at home, they are generally still paying less for driving than conventional car users, although this gap has narrowed considerably.
Analysts say about 80% of EV charging takes place at home or at work, so if an electric vehicle is only used close to home it generally remains the least expensive option. But once the vehicle is used for longer road trips, drivers are more likely to use fast-charging stations because other options would take too long to charge the battery.
Charging a Tesla on 120V AC power—the power that comes from a standard U.S. wall socket—would take days. In Europe, 230V is the AC standard, according to Germany’s ZVEI electronics-industry association. European chargers installed on street corners, at supermarkets, places of work and in home garages can charge a powered down Tesla battery overnight.
The supercharger networks run on DC power, requiring at least 480 volts of power, and can charge up to around 200 miles of range within 15 minutes.
Write to William Boston at william.boston@wsj.com
Corrections & Amplifications
Standard household power is 120 volts in the U.S. An earlier version of this article incorrectly said 120 volts is the standard in Europe. (Corrected on Dec. 25)
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Elon Musk’s Finances Complicated by Declining Wealth, Twitter Pressures
Elon Musk
‘s immense wealth and borrowing power are now being tested as the
Tesla Inc.
TSLA -1.76%
shares that have fueled his fortune have sharply declined while he rushes to stabilize his massive personal investment in Twitter Inc.
The auto maker’s share value has nosedived 18% this week alone and more than 60% since he announced his plan to buy Twitter.
His ability to use his shares at Tesla to raise money, by selling or borrowing against them, has been complicated by their rapid downdraft in recent months.
Historically, Mr. Musk has been a cash-poor billionaire, depending upon so-called margin loans—borrowing backed up by his shares—for his personal expenses and business investments while holding on to his Tesla shares and benefiting from their rising value.
But Tesla’s market value has fallen by about $700 billion this year, sinking his personal wealth along the way. The decline in Tesla’s valuation comes after years of growth that has allowed him to easily borrow money without having to cash out his shares.
Shares in Tesla have fallen around 65% in 2022, dinged, in part, by the higher interest-rate environment. Another issue relates to the reason he may need cash: Twitter. Tesla investors have been concerned that Mr. Musk’s attention is divided following his October takeover of the social-media company.
Late last year, just as Tesla’s stock price peaked, he began selling Tesla shares, totaling more than $39 billion including $3.5 billion last week. What his liquidity is like is unknown after what he said would be a more than $11 billion tax bill for 2021 and putting up roughly $25 billion in cash as part of buying Twitter.
Mr. Musk’s current Tesla holdings, not including exercisable options, total 424 million shares worth about $52 billion at Friday’s closing price of $123.15 a share.
Simply put, if he could tap all of those shares as collateral under Tesla’s rules, he would be allowed to borrow about $13 billion. That is only a bit more than he planned to borrow in April as part of the original Twitter deal using just 40% of his shares as collateral, underscoring how his borrowing power has shrunk with the collapse of the car company’s share price. He later scrapped those proposed margin loans to fund the deal amid investor concerns over the risk.
A Tesla launch in Bangkok earlier this month.
Photo:
Vachira Vachira/Zuma Press
Mr. Musk and Tesla didn’t respond to a request for comment.
Tesla shares aren’t his only asset or only avenue to raise money. He also holds shares in Space Exploration and Technologies Corp., or SpaceX, and has ownership in startups such as the Boring Co. His level of personal indebtedness isn’t clear.
Mr. Musk is facing questions about whether Tesla, where he is also chief executive, is ready for a recession as he separately tries to stem losses at Twitter, cutting thousands of workers from his newly acquired social-media platform. Late Tuesday, he said drastic spending cuts at Twitter were required as the company was on track to bleed billions of dollars. His team had been seeking additional investment dollars for Twitter.
“We have an emergency fire drill on our hands,” Mr. Musk said during a public talk on Twitter Spaces. After taking those drastic efforts, he said, Twitter could break even next year.
While Twitter has rarely been profitable in the past decade, its finances were made more challenging by the debt Mr. Musk took on to fund his acquisition and by a decline in spending by advertisers worried about the erratic changes occurring under his leadership. Analysts estimate the debt expenses alone have added more than $1 billion in cost annually to a company that last year generated $5 billion in sales, mostly from ads.
Mr. Musk has been here before—mired in debt and burning cash as the global economy teeters—and emerged successfully.
Those successes and investor enthusiasm for his ventures made him rank as the world’s richest person for a time. The drop in Tesla’s value this year sent Mr. Musk’s ranking as the world’s richest man to No. 2 behind
Bernard Arnault,
the chairman and chief executive of luxury conglomerate LVMH Moët Hennessy Louis Vuitton. Mr. Musk’s fortune fell to an estimated $140 billion as of Thursday from a high of $340 billion a little more than a year ago, according to the Bloomberg Billionaires Index.
If he needs cash, Mr. Musk could always sell more Tesla shares, as he did recently. But, in the past, Mr. Musk, Tesla’s largest individual shareholder, has been reluctant to sell. At Tesla, Mr. Musk lacks the kind of dual class of stock ownership that gives founders at
Meta Platforms Inc.
or
Alphabet Inc.
controlling power. Instead, Mr. Musk’s large stake in Tesla, in the past, has effectively given him veto power over shareholder proposals thanks to the company’s supermajority vote requirement.
On Thursday, Mr. Musk said he sold some stock to make sure he had “powder dry…for a worst-case scenario” and said that he was done selling until probably 2025, though he’s made similar statements like that this year only to sell more.
“I’m somewhat paranoid having gone through two really intense recessions,” Mr. Musk said.
While he had used margin loans before, the idea of borrowing billions off the backs of Tesla shares to help Twitter carries risks.
Tesla’s board of directors has limited his borrowing power to essentially 25 cents on every dollar of share value, according to regulatory filings. As the shares fall in value, he must comply with the 25% limit. The risk to Tesla shareholders, as the company describes in its regulatory filings, is that he may have to unload a lot of shares at once to generate cash. He has never disclosed at what price he would need to pony up more collateral.
In recent days, Mr. Musk has swatted down the idea of margin loans altogether. In a tweet, Mr. Musk cautioned that such a move was unwise in this market. “When there are macroeconomic risks, it is generally wise to avoid using margin loans on any company, as stocks may move in ways that are decoupled from their long-term potential,” he wrote on Dec. 8.
As of the most recent public filing, Mr. Musk had pledged as collateral more than half of his Tesla holdings, excluding options he could exercise.
Pledging doesn’t necessarily indicate that actual borrowing against those shares has occurred, the filing said.
Write to Tim Higgins at tim.higgins@wsj.com
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