Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Fords Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.
Nic Antaya | Getty Images
DETROIT – Ford Motor is set to report its fourth-quarter earnings after the bell Thursday. Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:
Adjusted earnings per share: 62 cents
Automotive revenue: $40.37 billion
In October, Ford confirmed its prior full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion. Through the first three quarters of the year, its brought in $7.9 billion, led by its North American operations.
If Ford meets or exceeds Wall Street’s top- and bottom-line expectations, EPS would more than double the 26 cents it reported for the same period a year earlier. Revenue would be an increase of 14.5% from the fourth quarter of 2021.
While investors will be monitoring the fourth-quarter results for signs of any waning consumer demand or profit dilution, Ford’s 2023 guidance is expected to be more of a focus.
Wall Street expects Ford’s full-year 2023 adjusted earnings per share outlook to mark a nearly 16% decline from 2022, according to Refinitiv estimates. That’s despite forecasting full-year revenue up 3.4% year over year to more than $151 billion, signaling lower operational profit compared with recent years.
Automakers have posted record or near-record results during the coronavirus pandemic amid a tight supply of new vehicles and resilient consumer demand. But that scenario is slowly normalizing, leaving new vehicle prices and profits in flux.
On Monday, Ford cut the price of its electric Mustang Mach-E, an early sign of a burgeoning EV price war spurred by Tesla.
Earlier Thursday, Ford reported January new vehicles sales that showed slight improvement over the same period last year.
There’s pressure on Ford to deliver a strong fourth quarter and relatively solid guidance. Crosstown rival General Motors on Tuesday significantly outperformed Wall Street’s expectations. The automaker also forecast stronger-than-expected 2023 results, including adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.
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Renault and Nissan automobile logos are pictured during the Brussels Motor Show on January 9, 2020 in Brussels. (Photo by KENZO TRIBOUILLARD/AFP via Getty Images)
Kenzo Tribouillard | Afp | Getty Images
Automobile giants Renault and Nissan on Monday agreed to restructure their decades-long alliance, in a move that would see Renault’s shareholdings in Nissan reduced from around 43% to 15%.
The deal, which still pends board approvals, would equalize the companies’ cross-shareholdings, with the carmakers now able to “freely exercise the voting rights attached to their 15% direct shareholdings, with a 15% cap,” the companies said.
The new structure would also see Renault transfer 28.4% of Nissan shares into a French trust.
Voting rights in the trust would be “‘neutralized’ for most of the decisions, but the economic rights (dividends and shares’ sale proceeds) would still entirely benefit to Renault until such shares are sold,” according to the Monday announcement.
Renault would instruct the trustee to sell those shares if “commercially reasonable” and as part of a “coordinated and orderly process.”
The carmakers first signed their coalition in March 1999, expanding it to include junior partner Mitsubishi Motors in 2016. The Monday deal comes after months of intense discussions over the restructure of the Franco-Japanese alliance.
As part of the agreement, Nissan would also invest in Ampere, Renault’s electric vehicle arm, while the two companies will embark on “high-value-creation operational projects” in Latin America, India and Europe.
Renault announced in November that it had signed a non-binding framework agreement with China’s Geely to establish a new company producing hybrid powertrains and “highly efficient ICE [internal combustion engine] powertrains.”
The French giant has also entered into a long-term strategic cooperation with U.S. chipmaker Qualcomm.
Renault shares dropped 1.4% in early trade in Europe, while Nissan shares were down by around 0.7% during Asian trading hours overnight.
Customers wearing protective masks looks at the interior of a vehicle for sale at a Ford Motor Co. dealership in Colma, California, Feb. 1, 2021.
David Paul Morris | Bloomberg | Getty Images
DETROIT — As automakers chase Tesla-like profits on new electric vehicles, they face an existential question: how best to bring franchised auto dealers along with them as they transition to EVs.
Some, such as General Motors, are asking luxury dealers to go all-in on EVs or get out of the business. Others like Ford Motor are offering dealers different “EV-certification” levels, while most other carmakers, or OEMs, know they need to change the sales process to fit the evolving industry, but are still try to figure out how to do it.
“I think we’re all building this airplane as we fly,” Michael Alford, president of the National Auto Dealers Association, a trade association that represents more than 16,000 U.S. new franchised dealers, told CNBC. “Depending on the OEM, the level of engagement or the intensity of the engagement varies.”
Automakers and franchised dealers have a complex relationship that is backed, in many states, by laws that make it difficult, if not illegal, to bypass franchised dealers and sell new vehicles directly to consumers. (Tesla and other newer EV startups have worked around such regulations to cut costs.)
Both automakers and franchised dealers want to maximize profits, but they’re separate businesses that heavily rely on one another to succeed. Dealers rely on automakers for product to fill and move off lots, and the carmakers in turn rely on dealers to sell and service vehicles as well as serve as concierges for customers.
How that historical relationship fits into an all-electric future is expected to be at the forefront of discussions between automakers and dealers at the National Auto Dealers Association Show occurring through Sunday in Dallas. The event attracts thousands of franchise dealers annually to hear from their respective automotive brands.
For dealers — from mom-and-pop shops to large publicly traded chains — EVs will mean new employee training, infrastructure and substantial investments in their stores to be able to service, sell and charge the vehicles. Depending on the size of the dealer, those upgrades could easily cost hundreds of thousands, or millions, of dollars. Of course, they want to make sure their investments will pay off.
“The tone and tenor of this subject matter has evolved, and I think it’s very, very clear this year that our legacy OEMs absolutely realize that we are essential going forward,” said Alford, who runs Chevrolet and Cadillac dealerships in North Carolina.
Competing with Tesla
As more automakers introduce EVs, they’re rethinking the sales process, including selling new vehicles largely, if not fully, online. Tesla was among the first automakers to embrace online sales for a large portion of its business, though it still has physical dealerships, information sites and service shops.
A greater shift online may limit the role of dealers to strictly processing, maintenance and as delivery centers going forward and eliminate the need for large lots of cars that they then sell to consumers.
“By and large, the franchise system remains in place even for EVs by traditional automakers, although they all seem to be looking at ways to tweak it to be more competitive, so they say, with the Teslas of the world,” said Michelle Krebs, Cox Automotive executive analyst.
Automakers believe doing so will provide consumers a more streamlined and cohesive sales process, but they also consider the dealers to be their partners and to offer “strategic advantages” when it comes to other sales and maintenance issues.
A Tesla dealership in Colma, California, on Wednesday, Jan. 26, 2022.
David Paul Morris | Bloomberg | Getty Images
Honda Motor has said it plans to move more sales online, including 100% online sales for its luxury Acura brand for EVs. Mamadou Diallo, American Honda vice president of sales, said the plan is to facilitate the ordering process online, but with the vehicle being picked up or delivered by dealers. Those procedures are still being worked out, though, he said.
“We want to proceed with ensuring that we provide convenience with what customers are looking for, with no intention of bypassing our dealer body,” Mamadou said Tuesday during a media call.
Jay Vijayan, who assisted in building out Tesla’s digital and IT systems, doesn’t believe selling EVs exclusively online will pan out. He said a mix of sales points is best, which is why Tesla and newer EV startups are selling online as well as opening new showrooms and service centers.
“Apple still opens new stores, right? And every company you think is going to go direct is also opening new stores in the automotive space,” said Vijayan, founder and CEO of Tekion, a cloud-based dealer service provider.
Wall Street analysts have largely viewed direct-to-consumer sales as a means to optimize profit. However, there have been growing pains for Tesla when it comes to servicing its vehicles.
Ford CEO Jim Farley has said he wants the automaker’s dealers to cut selling and distribution costs by $2,000 per vehicle to be competitive with Tesla’s direct-to-consumer model.
Automaker approaches
Ford is among the automakers receiving the most pushback from dealers for its EV push, which includes EV-certification tiers that could cost more than $1 million per store, depending on the size of the dealership.
The Detroit automaker is facing legal challenges to the certification program from dealers who argue that the plan violates franchise laws. A group of 27 dealerships in Illinois filed a protest with the state’s motor vehicle review board, and four dealers in New York filed suit against the automaker last month, according to Automotive News.
Ford dealer Marc McEver said he signed on for the highest EV-certification tier at his dealership near Kansas City, Kansas, but he worries about the cost and timing of the program.
“I think we’re all concerned that what they’re having us put in now, by the time we really get some vehicles, will be outdated and need to be upgraded or replaced,” McEver, who also owns a Lincoln dealership, said.
Aside from the investments, dealers who opt into selling Ford EVs will need to abide by five standards to stay within good standing: clear and nonnegotiable pricing; charging investment; employee training; and improved vehicle purchasing and ownership experience for customer, both digitally and in person.
Ford on Saturday plans to outline some changes to its EV-certification tiers, according to two people familiar with the plans. The changes, as first reported by Automotive News, would narrow the differences between the program’s two tiers. The bottom tier comes with lower capital investment but also a smaller allocation of EVs from Ford.
Ford, though, unlike archrival General Motors, is allowing dealers to opt out of selling EVs and continue to sell the company’s gas-powered cars.
GM has offered buyouts to its Buick and Cadillac dealers that don’t want to shell out to sell EVs. About 320 of Cadillac’s 880 retailers took buyouts. Buick’s buyouts are ongoing, according to a spokesman.
Toyota Motor, for its part, has no plans to overhaul its franchised dealership network as it invests in electrified vehicles, CEO Akio Toyoda told dealers to resounding applause in September.
“I know you are anxious about the future. I know you are worried about how this business will change. While I can’t predict the future, I can promise you this: You, me, us, this business, this franchised model is not going anywhere. It’s staying just as it is,” said Toyoda, who will step down as CEO to become chairman in April.
A Tesla showroom is seen in the City Center shopping center on January 17, 2023 in Washington, DC.
Anna Moneymaker | Getty Images
DETROIT — Tesla vehicles in the U.S. are seeing significant price cuts, and that’s proving to be a double-edged sword for the electric carmaker and the greater automotive industry.
Tesla earlier this month slashed prices of its new cars by as much as 20%, making the vehicles more affordable and likely eligible for federal tax credits. But it also tanks the resale values of cars for current owners and is sending ripple effects through the auto industry.
CEO Elon Musk hasn’t directly addressed the price cuts, which are counterintuitive to his claims that the company’s cars will be appreciating assets — a rarity for the market aside from classics and collectible vehicles.
Analysts say the price cuts suggest Tesla is prioritizing sales over profits, potentially signaling a demand problem.
“There’s demand weakening, and they want to improve their sales — or it’s a market share grab,” said Michelle Krebs, Cox Automotive executive analyst.
For the industry at large, Tesla’s price cuts put pressure on other automakers to offer more affordable EVs despite rising commodity costs, creates havoc for used vehicle retailers that will need to write down the vehicles and has Wall Street concerned about the first EV pricing war amid recessionary fears.
“Tesla’s price cuts make all other EVs and [internal combustion engine vehicles] look incrementally more expensive, is margin compressive and sends a chill across the used car market,” Morgan Stanley analyst Adam Jonas wrote in a Friday investor note.
Automakers change prices regularly on new vehicles. It’s typically done through incentives or when a new model year comes out. But the adjustments, upward or downward, are historically small to avoid upsetting the automotive ecosystem for both consumers and car dealers.
Musk foreshadowed such a move last month in predicting a recession later this year.
“Do you want to grow unit volume, in which case you have to adjust prices downward? Or do you want to grow at a lower rate, or go steady?” Musk said Dec. 22 during a Twitter Spaces conversation. “My bias would be to say let’s grow as fast as we can without putting the company at risk.”
Tesla is due to report fourth-quarter earnings Wednesday after market close.
Used prices
When the price of a new vehicle drops, the value of the used models also takes a hit. In the case of Tesla, some of the new models were going for almost the same price — just thousands of dollars off — as their used counterparts. That’s problematic for current owners as well as used vehicle retailers and Tesla, which sells used models directly to consumers.
In the first 17 days of January, Edmunds reports, used prices of 2020 model year or newer Teslas dropped to an average price of $58,657 — 24.5% off their June peak of $76,626.
Tesla’s stock performance over the past year.
Cars.com reports list prices for used vehicles on the consumer-shopping website declined 3.3% for the Model Y and Model 3 as owners attempt to hold the line on resell pricing despite cuts to the new vehicles.
“The Tesla price cuts will affect consumers quite differently depending on which side of the news they sit,” Ivan Drury, Edmunds’ director of insights, said.
On one hand, Tesla owners have complained to billionaire CEO and Twitter owner Musk on the social media platform that the price cuts devalue their vehicles. In China, where price cuts took effect earlier than in the U.S., protesters reportedly gathered at the automaker’s showrooms and distribution centers demanding rebates and credits.
Recent Tesla buyers who missed out on the fresh price cuts are petitioning Musk and the company to make them whole. They have sought free, premium driver-assistance upgrades, free Supercharging and other pluses to offset their higher price tags.
At the same time, Cars.com and Edmunds both report interest in and searches for Tesla vehicles have skyrocketed since the reductions.
CarMax, the nation’s largest seller of used vehicles, quickly sold hundreds of Teslas after realigning prices. It only had about 150 Tesla cars for sale as of Tuesday, down from hundreds before the company cut prices.
“We continuously adjust retail vehicle pricing in real time to match market conditions and offer competitive pricing,” CarMax Chief Operating Officer Joe Wilson said in an emailed statement. “As such, we adjusted pricing to respond to the market conditions related to new car price reductions and this has been received positively from consumers looking to purchase a used Tesla.”
Peer pressure
Wall Street analysts were largely positive on the cuts for Tesla as a boon for sales.
Tesla has enjoyed significantly higher profit margin on its EVs compared to traditional automakers. Its software and subscription offerings, including its advanced-driver assistance systems and in-vehicle Wi-Fi, could help cushion anticipated profit losses due to the recent price cuts, as could EV tax credits.
Plus, the price reductions pressure other automakers, or OEMS, to cut prices on their own EVs.
“Most OEMs are currently losing money on EVs, and these price cuts are likely to make business even more difficult, just as they are attempting to ramp production of EV offerings,” BofA Securities analyst John Murphy wrote to investors earlier this month.
Gerald Johnson, General Motors’ head of global manufacturing, said Tesla’s cuts don’t change the company’s manufacturing plan for electric vehicles. The automaker currently sells its sub-$30,000 Chevy Bolt EV models — among the most affordable in the industry — as well as higher-priced models on a new battery system.
“We believe we have an EV for every price bracket and every market segment that we’re rolling out here,” Johnson said Friday during an event in Flint, Michigan. He said Tesla’s price cuts signal that the vehicles “may have been overpriced to begin with.”
GM cut the prices of its Bolt models by thousands of dollars last year, only to recently raise them by hundreds of dollars, citing industry pricing pressures.
– CNBC’s Lora Kolodny and Michael Bloom contributed to this report.
Alex Spiro, attorney to Elon Musk, center, departs court in San Francisco, California, US, on Tuesday, Jan. 17, 2023.
Benjamin Fanjoy | Bloomberg | Getty Images
Tesla CEO Elon Musk appeared in a San Francisco federal court on Friday to defend tweets he posted to his tens of millions of followers in August 2018.
The tweets said he had “funding secured” to take his electric vehicle company private for $420 per share, and that “investor support” for such a deal was “confirmed.”
Tesla’s stock trading initially halted after the tweets, then shares were highly volatile for weeks. Musk later said that he had been in discussions with Saudi Arabia’s sovereign wealth fund and felt sure that funding would come through at his proposed price. A deal never materialized.
The SEC charged Musk and Tesla with civil securities fraud after the tweets. Musk and Tesla each paid $20 million fines to the agency, and struck a revised settlement agreement that required Musk to temporarily relinquish his role as chairman of the board at Tesla.
His 2018 tweets also triggered a shareholder class action lawsuit from Tesla investors. They alleged that Musk’s tweets misled them and said relying on his statements to make trades cost them significant amounts of money.
The shareholders’ trades in question took place during a 10-day period before Musk seemed to admit a take-private deal was not going to happen in 2018.
Musk said under oath on Friday that it’s difficult to link Tesla’s stock price to his tweets.
“There have been many cases where I thought that if I were to tweet something, the stock price would go down,” Musk said. “For example, at one point I tweeted that I thought that, in my opinion, the stock price was too high…and it went went higher, which was, which is, you know, counterintuitive.”
A big increase in trading volume after he tweeted
It’s rare for top executives at publicly traded companies to discuss their stock price because any commentary can influence price movements.
Daniel Taylor, director of the Wharton Forensics Analytics Lab and professor at the University of Pennsylvania, analyzed every trade in Tesla stock occurring on Aug. 7, 2018, the day that Musk tweeted. He calculated the total trading volume every minute from the time the market opened through the time of Musk’s tweets about a buyout.
Taylor found that the trading volume the minute Musk tweeted, at 12:48 p.m. ET that day, was over $350 million, and the trading volume for Tesla shares the next minute was over $250 million. By comparison, the average volume five minutes before Musk tweeted was $32 million per minute. The minute before Musk tweeted, trading volume was $24 million.
“It is generally true that correlation is not causation,” Taylor told CNBC on Friday, after Musk’s first day on the witness stand. “However, I am unaware of any alternative explanation for a 10-fold increase in trading volume the same minute that Elon Musk tweeted.”
Musk also testified about his low opinion of short sellers on Friday.
“I believe short selling should be made illegal,” Musk said, referring to short sellers as “bad people on Wall Street” who “steal” from other investors. He said they also plant stories in the media to “get the stock to go down” and will “do anything in their power to make a company die.”
Tesla was among the most heavily shorted stocks in August 2018, when Musk made the statements about taking Tesla private. Tesla’s share price surged about 10% during trading that day. Short sellers face enormous losses when shares in a given company climb higher.
Some of the plaintiffs in the trial that’s underway claim that Musk’s “funding secured” tweets were intended to put upward price pressure on Tesla’s stock driving a so-called “short squeeze.”
Musk’s testimony is not yet complete and the court plans to hear from him again on Monday.
A customer looks at a vehicle at a BMW dealership in Mountain View, California, on Dec. 14, 2022.
David Paul Morris | Bloomberg | Getty Images
DETROIT — Wall Street and industry analysts remain on high alert for signs of a “demand destruction” scenario for the U.S. automotive industry this year as interest rates rise and consumers grapple with vehicle-affordability issues and fears of a recession.
Since the onset of the coronavirus pandemic in early 2020, automakers have experienced unprecedented pricing power and profits per vehicle amid resilient demand and low inventory levels due to supply chain and parts disruptions affecting vehicle production.
Those factors created a supply problem for the auto industry, which Cox Automotive and others believe may switch to a demand problem — just as automakers are slowly improving production.
“We’re swapping a supply problem for a demand problem,” Cox Automotive chief economist Jonathan Smoke said Thursday.
Cox has 10 predictions for the U.S. auto industry this year that point to such an outcome. Here they are along with reasons why investors should be mindful of them.
10. Federal incentives will encourage more fleet buyers to consider electrified solutions
While electric vehicle tax credits under the Inflation Reduction Act have not been finalized, incentives for commercial vehicles and fleet owners promise to be a major benefit.
Unlike consumer vehicles that qualify for credits of up to $7,500, fleet and commercial vehicles do not need to meet stringent U.S. requirements for domestic parts and batteries.
“This is actually where we think the majority of growth will be in new vehicle sales in ’23,” Smoke said.
Cox forecasts U.S. new vehicle sales will be 14.1 million in 2023, a slight increase from nearly 13.9 million last year.
9. Half of vehicle buyers will engage with digital retailing tools
The coronavirus pandemic forced franchise auto dealers to embrace online retailing more than automakers ever could, as consumers demanded it and many physical dealerships were shuttered due to the global health crisis.
That trend is expected to continue for years to come, as many automakers have vowed to better align production with consumer demand.
8. Dealership-service operations volume and revenue climb
Due to a lack of available new vehicles and higher costs, consumers are keeping their vehicles longer. This is expected to increase back-end service business and revenue for dealers compared to their sales. Dealers make notable profits from servicing vehicles. The increase is expected to assist in offsetting potential declines in sales and financing options.
“We see this as one of the silver linings for dealers,” Smoke said. “The service department usually does well [and] is somewhat counter-cyclical during economic downturns.”
7. All-cash deals will increase to levels not seen in decades
High interest rates are making vehicle purchasing far more challenging for mainstream buyers and less economical for more wealthy consumers. Such conditions are expected to push those who have the cash to purchase a vehicle to buy it without financing it.
Smoke said the average loan rate for a new vehicle is more than 8%. For used vehicles, it’s close to 13%.
6. Vehicle affordability will be the greatest challenge facing buyers
Vehicle affordability was already a concern when interest rates were low. This issue has grown to be more concerning as the Federal Reserve pumps up interest rates to battle inflation. Cox reports vehicle affordability is at record lows.
The increases have led to upticks in average monthly payments of $785 for new cars and $661 for leases, Cox said. The average list price of a new vehicle remains above $27,000, while average transaction prices for new vehicles ended last year at about $49,500.
“The longer-term concern is that this causes what is produced to skew even more towards luxury and away from affordable price points, which means even the U.S. vehicle market has a long-term affordability issue,” Smoke said.
5. Used-vehicle values will see above normal depreciation for a second straight year
Used vehicle prices skyrocketed during the first two years of the coronavirus pandemic due to the low availability of new cars and trucks. The wholesale pricing peaked in January 2022. It declined 14.9% last year and is expected to fall another 4.3% by year-end.
The declines are still not enough to offset the 88% rise in index pricing from April 2020 to January 2022.
Inventory of used vehicles is stabilizing at nearly 50 days — close to 2019 levels before the coronavirus pandemic depleted supply.
4. Sales of electric vehicles in the U.S. will surpass 1 million units for the first time
Cox reports all-electric vehicle sales increased by 66% to more than 808,000 units last year in the U.S., so it’s not too much of a leap to hit 1 million amid dozens of new models scheduled to hit the market. EVs represented about 5.8% of new vehicles sold in the U.S.
Add in hybrid and plug-in hybrid electric vehicles that pair with a traditional engine, Smoke said about 25% ofnew vehicles sold this year to be “electrified” vehicles. That would be up from 15% to 16% in 2022.
3. Total retail vehicle sales will fall in 2023, as new vehicle sales grow, used sales decline
Automakers are expected to rely more heavily on sales to commercial and fleet customers such as rental car and government agencies than they have in recent years to increase total sales.
Carmakers prioritized the more profitable sales to consumers amid the low inventories in recent years. But with consumer demand anticipated to fall, companies are expected to turn to fleet sales to fill that demand gap.
2. New vehicle inventory levels will continue to increase
Expectations for lower demand come as the automotive industry is slowly increasing its production of vehicles, leading to higher inventory levels.
Inventory levels the past two years were at record lows due to supply chain and parts problems affecting production.
Cox reports inventory levels greatly differ based by brand, with the Detroit automakers — specifically Stellantis — having an ample supply of vehicles. Toyota has the lowest days of supply of vehicles, according to Cox.
1. A slow-growing economy will place pressure on the automotive market
Combine all of the prior predictions in addition to the economic concerns and that’s a lot of pressure on the U.S. automotive industry in the year ahead.
This is also happening during a time when automakers are investing billions in electric vehicles and new technologies such as advanced driver-assistance systems and autonomous vehicles.
“We hope for an economic soft landing but ether way we believe the auto market is going to be held back in the year ahead,” Smoke said.
DETROIT – General Motors reclaimed its U.S. sales crown from Toyota Motor last year as the Detroit automaker eked out a slight gain in annual U.S. vehicle sales despite supply chain problems.
GM said Wednesday it sold 2.27 million vehicles in the U.S. in 2022, up by 2.5% over 2021, including a 41.4% increase during the fourth quarter. Analysts expect overall U.S. auto industry sales to have declined by 8% and 10% last year compared to 2021.
Toyota said it sold 2.1 million vehicles in the U.S. last year, down 9.6% from 2021. The company was able to manage supply chain problems, specifically with semiconductor chips, better than others.
Toyota edged out GM in sales by 114,034 vehicles in 2021 – dethroning the Detroit automaker for the first time since 1931 when it surpassed Ford Motor. Toyota executives previously said the top sales spot was unattainable, but CEO Akio Toyoda last year told dealers he did a “happy dance” when he heard the news.
Jack Hollis, executive vice president of Toyota Motor North America, on Wednesday said the Japanese automaker remains focused on retail sales, which are traditionally more profitable than commercial or fleet sales. Toyota has led those sales for several years.
EVs
Despite recent criticism of its all-electric vehicle strategy, Toyota on Wednesday touted that it leads the country in electrified vehicle sales. Those include hybrid, plug-in and all-electric cars and trucks.
GM, in contrast, largely ditched hybrids for an all-electric vehicle strategy but has been slow to ramp up production. GM’s U.S. EV sales represented less than 2% of its sales in 2022.
In a release Wednesday, GM called EVs “growth opportunities.” It’s expected to release more mainstream models such as the Chevrolet Blazer and Chevrolet Equinox EV crossovers.
GM was able to achieve record U.S. sales of 38,120 Chevrolet Bolt EV and EUV models in 2022. However, it sold fewer than 1,000 units of its luxury GMC Hummer EV and Cadillac Lyriq, combined.
GM said production of the Bolt models is expected to increase to more than 70,000 units this year to meet strong global demand. The company last year pushed back plans to produce 400,000 EVs in North America through 2023 to mid-2024.
A Tesla electric vehicle is parked at a Tesla Supercharger station in Suwon, South Korea on Aug. 7, 2022.
SeongJoon Cho | Bloomberg | Getty Images
South Korea’s antitrust regulator said it would impose a 2.85 billion won ($2.2 million) fine on Tesla for failing to tell its customers about the shorter driving range of its electric vehicles in low temperatures.
The Korea Fair Trade Commission said that Tesla had exaggerated the “driving ranges of its cars on a single charge, their fuel cost-effectiveness compared to gasoline vehicles as well as the performance of its Superchargers” on its official local website since August 2019 until recently.
The driving range of the U.S. EV manufacturer’s cars plunge in cold weather by up to 50.5% versus how they are advertised online, the KFTC said in a statement on Tuesday.
Tesla could not be immediately reached for comment.
On its website, Tesla provides winter driving tips, such as pre-conditioning vehicles with external power sources, and using its updated Energy app to monitor energy consumption, but does not mention the loss of driving range in sub-zero temperatures.
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In 2021, Citizens United for Consumer Sovereignty, a South Korean consumer group, said the driving range of most EVs drop by up to 40% in cold temperatures when batteries need to be heated, with Tesla suffering the most, citing data from the country’s environment ministry.
Last year, the KFTC fined German carmaker Mercedes-Benz and its Korean unit 20.2 billion won for false advertising tied to gas emissions of its diesel passenger vehicles.
A long exposure photo shows the path of SpaceX’s Falcon 9 rocket as it launched the ispace mission on Dec. 11, 2022, with the rocket booster’s return and landing visible as well.
SpaceX
Elon Musk’s re-usable rocket maker and satellite internet company, SpaceX, is raising $750 million in a new round of funding that values the company at $137 billion, according to correspondence obtained by CNBC.
Last month, Bloomberg first reported that SpaceX was allowing insiders to sell at $77 per share, which would have put the company’s valuation near $140 billion. The company raised more than $2 billion in 2022, including a $250 million round in July, and was valued at $127 billion during an equity round in May, CNBC previously reported.
According to an e-mail sent to prospective SpaceX investors, Andreessen Horowitz (also known as a16z) will likely lead the new funding round. Early SpaceX investors included Founders Fund, Sequoia, Gigafund and many others.
A16z also participated in Elon Musk’s leveraged buyout of Twitter, a $44 billion deal that closed in late October 2022.
SpaceX and a16z did not immediately respond to a request for comment.
Last year, SpaceX achieved several new milestones but faced delays to its Starship program, which is part of NASA’s effort to bring astronauts back to the moon.
On the upside, the company’s satellite internet service, Starlink, exceeded 1 million subscribers and provided a lifeline to users in Ukraine who suffered infrastructure disruptions after Russia’s invasion. SpaceX also managed to surpass 60 reusable rocket launches in a single year via its Falcon program.
The company is currently continuing development of its Starship and Super Heavy launch vehicles at the company’s Starbase facility in Boca Chica, Texas. It’s not clear when the company will move to the next step of the program, which entails an orbital launch test of these larger vehicles.
As Musk has repeatedly sounded off about geopolitical issues on Twitter, NASA Administrator Bill Nelson recently asked SpaceX President and COO Gwynne Shotwell whether his “distraction” as the new owner and CEO of Twitter might affect SpaceX’s work with the space agency, NBC News reported. Nelson said that Shotwell reassured him it would not.
NASA is now considering whether SpaceX can help rescue residents on the International Space Station, including an astronaut and two cosmonauts with Russia’s Roscomos, according to CNET. Russia’s Soyuz capsule sprung a coolant leak in December, and an investigation is underway to determine if the spacecraft can safely return the crew home or if emergency measures will need to be taken instead.
Tesla just published its fourth-quarter vehicle production and delivery report for 2022.
Here are the key numbers.
Total deliveries Q4 2022: 405,278 Total production Q4 2022: 439,701 Total annual deliveries 2022: 1.31 million Total annual production 2022: 1.37 million
Deliveries are the closest approximation of sales disclosed by Tesla. These numbers represented a new record for the Elon Musk-led automaker and growth of 40%in deliveries year-over-year.
However, the fourth quarter numbers fell shy of analysts’ expectations.
According to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022 Wall Street was expecting Tesla to report deliveries around 427,000 for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.
Those more recent estimates were in line with a company-compiled consensus distributed by Tesla investor relations Vice President Martin Viecha. That consensus, published by electric vehicle industry researcher @TroyTeslike, said that 24 sell-side analysts expected Tesla deliveries of about 417,957 on average for the quarter (and about 1.33 million deliveries for the full year).
Tesla started production at two new factories this year — in Austin, Texas and Brandenburg, Germany — and ramped up production in Fremont, California and in Shanghai, but it does not disclose production and delivery numbers by region.
In the fourth quarter of 2022, Tesla said deliveries of its entry level Model 3 sedan and Model Y crossover amounted to 325,158, while deliveries of its higher end Model S sedan and Model X SUV amounted to 18,672.
In its third-quarter shareholder presentation, Tesla wrote: “Over a multi-year horizon we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”
The period ending Dec. 31, 2022 was marked by challenges for Tesla, including Covid outbreaks in China, which caused the company to temporarily suspend and reduce production at its Shanghai factory.
During the fourth quarter, Tesla also offered steep price cuts and other promotions in the U.S., China and elsewhere in order to spur demand, even though doing so could put pressure on its margins.
In a recent e-mail to Tesla staff, Elon Musk asked employees to “volunteer” to deliver as many cars to customers as possible before the end of 2022. In his e-mail, Musk also encouraged employees not to be “bothered” by what he characterized as “stock market craziness.”
Shares of Tesla plunged by more than 45% over the last six months.
In December, several analysts expressed concern about weakening demand for Tesla electric vehicles, which are relatively expensive compared with an increasing number of hybrid and fully electric products from competitors.
Along with competitors ranging from industry veterans Ford and GM to upstart Rivian, Tesla is poised to reap the benefits of Biden’s Inflation Reduction Act this year, which includes incentives for domestic production and purchases of fully electric cars.
Retail shareholders and analysts alike attributed some of Tesla’s falling share price in 2022 to a so-called “Twitter overhang.”
Musk sold billions of dollars worth of his Tesla holdings last year to finance a leveraged buyout of the social media business Twitter. That deal closed in late October. Musk appointed himself CEO of Twitter and has stirred controversy by making sweeping changes to the company and its social media platform.
Shares of Tesla started to rise again in the final days of December 2022, in anticipation of record fourth-quarter and full-year deliveries.