Tag Archives: Motor Vehicles

Business

GM’s U.S. Sales Recovered From Early 2022 Woes to Post Full-Year Rise

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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.

WSJ toured Rivian’s and Ford’s electric-vehicle factories to see how they are pushing to meet demand. Illustration: Adam Falk/The Wall Street Journal

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. 

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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

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Business

Tesla is not alone: 18 (and a half) other big stocks are headed for their worst year on record

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In the worst year for stocks since the Great Recession, several big names are headed for their worst year on record with just one trading day left in 2022.

The S&P 500 index
SPX,
+1.75%
and Dow Jones Industrial Average
DJIA,
+1.05%
are both headed for their worst year since 2008, with declines of 20.6% and 9.5% respectively through Thursday. But at least 19 big-name stocks — and half of another — are headed for a more ignominious title for 2022, according to Dow Jones Market Data: Worst year ever.

Tesla Inc.
TSLA,
+8.08%
is having the worst year among the group of S&P 1500 constituents with a market capitalization of $30 billion or higher headed for record annual percentage declines. Tesla shares have declined 65.4% so far this year, which would be easily the worst year on record for the popular stock, which has only had one previous negative year since going public in 2010, an 11% decline in 2016.

Tesla may not be the worst decliner on the list by the time 2023 arrives, however, as another Silicon Valley company is right on its heels. Meta Platforms Inc.
META,
+4.01%,
the parent company of Facebook, has fallen 64.2% so far this year, as Chief Executive Mark Zuckerberg has stuck to spending billions to develop the “metaverse” even as the online-advertising industry that provides the bulk of his revenue has stagnated. It would also only be the second year in Facebook’s history that the stock has declined, after a 25.7% drop in 2018, though shares did end Facebook’s IPO year of 2012 30% lower than the original IPO price.

Only one other stock could contend with Tesla and Meta’s record declines this year, and Tesla CEO Elon Musk has some familiarity with that company as well. PayPal Holdings Inc.
PYPL,
+4.46%,
where Musk first found fame during the dot-com boom, has declined 63.2% so far this year as executives have refocused the company on attracting and retaining high-value users instead of trying to get as many users as possible on the payments platform. It would be the second consecutive down year for PayPal, which had not experienced that before 2021 since spinning off from eBay Inc.
EBAY,
+4.76%
in 2015.

None of the other companies headed for their worst year yet stand to lose more than half their value this year, though Charter Communications Inc.
CHTR,
+1.99%
is close. The telecommunications company’s stock has declined 48.2% so far, as investors worry about plans to spend big in 2023 in an attempt to turn around declining internet-subscriber numbers.

In addition to the list below, Alphabet Inc.’s class C shares
GOOG,
+2.88%
are having their worst year on record with a 38.4% decline. MarketWatch is not including that on the list, however, as Alphabet’s class A shares
GOOGL,
+2.82%
fell 55.5% in 2008; the separate class of nonvoting shares was created in 2012 to allow the company — then still called Google — to continue issuing shares to employees without diluting the control of co-founders Sergey Brin and Larry Page.

Apart from that portion of Alphabet’s shares, here are the 19 large stocks headed for their worst year ever, based on Thursday’s closing prices.

Company % decline in 2022
Tesla Inc.
TSLA,
+8.08% 		65.4%
Meta Platforms Inc.
META,
+4.01% 		64.2%
PayPal Holdings Inc.
PYPL,
+4.46% 		62.6%
Charter Communications Inc. 48.0%
Edwards Lifesciences Corp.
EW,
+2.87% 		41.9%
ServiceNow Inc.
NOW,
+3.67% 		39.9%
Zoetis Inc.
ZTS,
+3.00% 		39.3%
Fidelity National Information Services Inc.
FIS,
+2.03% 		37.8%
Accenture PLC
ACN,
+2.00% 		35.3%
Fortinet Inc.
FTNT,
+2.82% 		31.5%
Estee Lauder Cos. Inc.
EL,
+1.52% 		32.5%
Moderna Inc.
MRNA,
+1.34% 		29.6%
Iqvia Holdings Inc.
IQV,
+2.94% 		26.3%
Carrier Global Corp.
CARR,
+2.17% 		22.8%
Hilton Worldwide Holdings Inc.
HLT,
+1.63% 		19.2%
Broadcom Inc.
AVGO,
+2.37% 		16.2%
Arista Networks Inc.
ANET,
+2.27% 		15.2%
Dow Inc.
DOW,
+1.32% 		10.7%
Otis Worldwide Corp.
OTIS,
+2.16% 		9.2%

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Business

2022 Lexus NX450h+ Is Great Plug-In Hybrid Before Going All EV

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Photo: Lawrence Hodge

Plug-in hybrids are a great compromise for people that still want the convenience of a gas car but want to experience the benefits of electrification. Most PHEVs have enough electric driving range to cover commutes and around-town needs while the gas engine alleviates any range anxiety. After years of making excellent hybrids, Lexus is finally getting in the plug-in hybrid game with the NX450h+. It combines the luxury and functionality of the second-generation NX with usable electric power. But it comes at quite a price.

Disclaimer: Lexus offered me the NX450h+ and I was actually surprised at how much I enjoyed it. Filling up the tank only once a week is great.

What Is It?

Photo: Lawrence Hodge

The NX is Lexus’ second-smallest crossover, slotting above the UX and below the RX. While it rides on a modular platform that’s shared with everything from the Toyota Sienna minivan to the Lexus ES sedan, the NX is more mechanically related to the Toyota RAV4. This is an important point that I’ll get to later. And if you’ve always wondered what the hell NX stands for, a Lexus rep once told me it means “Nimble Crossover.” Alright.

Specs That Matter

Photo: Lawrence Hodge

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Power comes from the same 2.5-liter naturally aspirated I4 engine that powers the base NX250 and the NX350h hybrid, but the difference is in the electric setup. The 450h+ adds a pair of electric motors that drive the rear wheels, giving this SUV all-wheel drive. Add in an 18.1-kilowatt-hour lithium-ion battery pack powering those motors and the result is the most powerful and efficient NX you can buy. It makes 304 total system horsepower with 364 lb-ft of torque. It also gets 84 mpge – the mile-per-gallon equivalent of gasoline and electric driving – and can go 37 miles on electricity alone. Honestly, though, it’s actually pretty easy to beat the EPA’s estimated EV range. I frequently saw as much as 42 miles of electric range per charge.

How It Drives

Lexus likes to tout the NX450h+ low center of gravity, and indeed, this thing is surprisingly nimble. It’s also surprisingly quick, with plenty of acceleration power for highway merging. The perk of having a battery and electric motors at your disposal is that, in everyday driving, it’s like having a turbo that’s always ready to provide extra boost. Power comes on smoothly and quickly, and the transition between gasoline and electric driving is one of the smoothest I’ve ever experienced. Unfortunately, when you’re relying on the 2.5-liter engine for power, it sounds buzzy and unrefined.

Lexus Advanced Park Assist Demo

What’s great about crossovers this size is how easy they are to maneuver. Parking and getting through tight spots is pretty easy. Parking the NX is made even better thanks to Lexus’ Advanced Park system, which is easier to operate than most other automated parking systems I’ve used. I also have to give Lexus props for placing a physical button on the dash to turn on the Advanced Park tech. There’s no having to line up in a specific spot for the system to self-engage. You simply find the spot you want, press start on the screen and let the car park itself. The system can pull forward, back in, or perform parallel parking maneuvers.

Photo: Lawrence Hodge

Driving in different powertrain modes is just as easy. A button on the center console allows drivers to choose between full-on EV mode, Hybrid or Charge setting, the latter of which uses the gas engine to recharge the battery while you’re driving. In EV mode, the NX450+ is predictably quiet. In Hybrid mode, the drivetrain operates as any other hybrid would, defaulting to electric power as often as possible with the gas engine kicking on as needed.

Charging at home is easy. The NX has an optional 6.6-kilowatt onboard charger ($800) that you simply plug into a standard home outlet. Charging this way, it takes about 4 to 5 hours to fully replenish the battery. It’s a cinch to do overnight. Unfortunately, public charging on a Level 2 outlet is a hit-or-miss affair, but that’s a product of the country’s problematic charging network, not Lexus.

A Few Notable Pros and Cons of the NX450h+

Photo: Lawrence Hodge

The NX has a lot of useful safety systems, but some of them are super sensitive. The pre-collision braking, for example, will sometimes activate when there’s no danger ahead of you. On the other hand, I like things like Safe Exit Assist, which will alert you to passing cars when you’re trying to exit from a parallel parking space. I just wish all of the systems were more cohesive in their integration.

The wireless charging pad doesn’t work well. It often doesn’t detect when a device is placed on top, and when it does work, the slippery surface means your phone moves around a lot when driving, which can cause it to stop charging.

Photo: Lawrence Hodge

The interior door handles are also unnecessarily complicated. The NX uses a dual electronic/standard door handle. At the forward end, you’ll find a braille-like surface that denotes where you should press to exit the car. Next to that, labeling shows how the handle operates manually, in case of power failure or an emergency. This is confusing and takes some getting used to, and seems like the answer to a question nobody asked.

 Verdict

Photo: Lawrence Hodge

The NX450h+ is an impressive plug-in effort from a company known for its hybrid excellence. But it may end up being a tough sell to some. For starters, the NX450h+ isn’t cheap. While a regular NX250 starts at a rather reasonable $38,850, you’re looking at well-equipped RX money for the 450h Plus: $57,705. With nearly every option box checked, including a $1,075 destination charge, my orange NX450h Plus costs $62,090.

Now, remember when I said that the NX is mechanically related to the RAV4? The NX450h+ uses the same drivetrain setup as the Toyota RAV4 Prime, which is over $15,000 cheaper. Yes, the Lexus is a little nicer inside, but that’s a big jump in price for effectively the same experience.

None of this is to say that the NX450h Plus is bad. It’s actually very good. But having to drop nearly $60,000 on a compact crossover just for the ability to drive 40 miles on electricity alone is a hard sell, especially when the exact same setup can be had for less money.

2022 Lexus NX NX 450h+ Luxury AWD Specs

Engine type

Gas/Electric I-4

Transmission/Drive

CVT w/OD

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Business

Rising Power Prices in Europe Are Making EV Ownership More Expensive

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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.

Would you choose an electric car that charges faster even if it meant a more-limited driving range? WSJ tech columnist Christopher Mims joins host Zoe Thomas to discuss the latest research into fast-charging EV batteries and the trade-offs they may come with. Plus, we visit a high-performance EV race to see what these kinds of batteries can really do. Photo: ABB FIA Formula E World Championship

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)

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Elon Musk’s Finances Complicated by Declining Wealth, Twitter Pressures

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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

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Technology

Porsche Once Made a Van With the Heart Of a 911

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Image: Porsche Centrum Gelderland

Porsche has never been one to shy away from making rare models. We’re talking models where less than 10 have been produced, like the 964 Turbo Cabriolet and the 993 Speedster. Among these rarities is a particular Porsche that wasn’t actually a Porsche at all: the VW T3 B32. It doesn’t look like a Porsche, it’s not badged as a Porsche, but it will definitely sound, like a Porsche.

In 1986, Porsche was fielding two 959s in the Paris Dakar Rally driven by two teams: René Metge partnered with Dominique Lemoyne in one, and Jacky Ickx with Claude Brasseur in the other. And while these 959s were engineered to be off-road beasts, capable of handling the toughest rally in the world, they were still quick. With a 2.8-liter 400 horsepower flat-6, not much could keep up with them, including support vehicles. Porsche did have a third 959 on hand, which was considered for use as a support vehicle, but the team needed something both bigger and fast.

Something else Porsche had on hand was a VW T3 van. Unfortunately, they were hilariously slow, and couldn’t keep up with the fast-paced nature of the race, where like every race, every minute counts. So rather than look for another vehicle or try and make do with what they had, Porsche engineers set to do what any gearhead would do and modded the T3 vans to work with their needs.

Image: Porsche Centrum Gelderland

While standard T3s were available with an array of engines, ranging from 1.6-liter flat fours and I4’s all the way up to a 2.6-liter I5, they were all slow. So rather than mod the existing engine, Porsche took a 288 hp flat-six from a 911 3.2 Carrera and dropped it in the engine bay. Engineers then mated that flat six with a Porsche transmission that routed power to the rear wheels. And since this was meant to keep up with rally racing, engineers also gave the T3 a unique suspension setup and bigger brakes. It was said to have a top speed of only 116 mph, but in reality, it was around 135 mph.

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Image: Porsche Centrum Gelderland

While someone quickly glancing at a VW T3 B32 might not be able to tell it apart from a regular T3, Porsche did a few things to distinguish it. There were larger 16-inch wheels with Fuchs rims, additional side vents to cool the bigger engine, front and rear skirts, and a larger exhaust.

Image: Porsche Centrum Gelderland

Inside there was a full leather interior, a Porsche badge on the steering wheel, and auxiliary gauges under the center console, behind the shifter.

While it’s not known whether or not this thing ever had any production intent, it’s believed that just seven examples of the T3 B32 were ever made. While it wasn’t publicly sold, some ended up in private hands, special customers who had a relationship with Porsche. A few of these even have Porsche VINs. And some are available for sale.

The example you see above is one that’s listed for sale at a Porsche dealer: Porsche Centrum Gelderland. It’s currently listed at €364,900, which with the current exchange rates to the U.S. dollar, that’s over $375,700. It’s in need of a bit of restoration as there’s some wear here and there, but other than that it looks great. While the years have given us Porsche SUVs and a sedan, we may never see anything like a Porsche van again.

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Business

Tesla, GM Among Car Makers Facing Senate Inquiry Into Possible Links to Uyghur Forced Labor

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WASHINGTON—The Senate Finance Committee has opened an inquiry into whether auto makers including

Tesla Inc.

and

General Motors Co.

are using parts and materials made with forced labor in China’s Xinjiang region.

In a letter sent Thursday, the committee asked the chief executives of eight car manufacturers to provide detailed information on their supply chains to help determine any links to Xinjiang, where the U.S. government has alleged the use of forced labor involving the Uyghur ethnic minority and others.

The U.S. bans most imports from the region under the Uyghur Forced Labor Prevention Act. The letter to car companies cited a recent report from the U.K.’s Sheffield Hallam University that found evidence that global auto makers were using metals, batteries, wiring and wheels made in Xinjiang, or sourcing from companies that used Uyghur workers elsewhere in China.

According to that report, some car manufacturers “are unwittingly sourcing metals from the Uyghur region.” It said some of the greatest exposure comes from steel and aluminum parts as metals producers shift work to Xinjiang to take advantage of Chinese government subsidies and other incentives.

The U.S. ban on products linked to Xinjiang has already caused disruptions in the import of solar panels made there.

China has called Washington’s claim baseless. It disputes claims by human-rights groups that it mistreats Uyghurs by confining them in internment camps, with Beijing saying its efforts are aimed at fighting terrorism and providing vocational education.

Besides

Tesla

and GM, the letter signed by Finance Committee Chairman

Ron Wyden

(D., Ore.), was sent to

Ford Motor Co.

,

Mercedes-Benz Group AG

,

Honda Motor Co.

,

Toyota Motor Corp.

,

Volkswagen AG

and

Stellantis

NV, whose brands include Chrysler and Jeep.

GM said its policy prohibits any form of forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.

“We actively monitor our global supply chain and conduct extensive due diligence, particularly where we identify or are made aware of potential violations of the law, our agreements, or our policies,“ the company said.

A Volkswagen spokesman said the company investigates any alleged violation of its policy, saying “serious violations such as forced labor could result in termination of the contract with the supplier.” A Stellantis spokesperson said the company is reviewing the letter and the claims made in the Sheffield Hallam study.

Other companies didn’t immediately provide comments.

“I recognize automobiles contain numerous parts sourced across the world and are subject to complex supply chains. However, this recognition cannot cause the United States to compromise its fundamental commitment to upholding human rights and U.S. law,” Mr. Wyden wrote.

The information requested includes supply-chain mapping and analysis of raw materials, mining, processing and parts manufacturing to determine links to Xinjiang, including manufacturing conducted in third countries such as Mexico and Canada. 

General Motors says its policy prohibits forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.



Photo:

mandel ngan/Agence France-Presse/Getty Images

The lawmakers are also asking the auto makers if they had ever terminated, or threatened to terminate, relations with suppliers over possible links to Xinjiang, and if so, provide details of the cases.

The committee’s action comes as the Biden administration and bipartisan lawmakers increase their focus on alleged forced-labor practices in China as a key component of their confrontation with Beijing over its economic policy. The United Auto Workers has called on the auto industry to “shift its entire supply chain out of the region.” 

The State Department has said more than one million Uyghurs and other minorities are held in as many as 1,200 state-run internment camps in Xinjiang. Chinese authorities “use threats of physical violence” and other methods to force detainees to work in adjacent or off-site factories, according to the department.

The U.S. Customs and Border Protection investigated 2,398 entries with a total value of $466 million during the fiscal year ended September, up from 1,469 entries in the previous year and 314 cases in fiscal 2000.

Analysts expect the CBP’s enforcement activity to further increase this year, with a strong bipartisan push for a tougher stance on the forced-labor issue.  

The researchers at Sheffield Hallam University found that more than 96 mining, processing, or manufacturing companies relevant to the auto sector are operating in Xinjiang. The researchers used publicly available sources, including corporate annual reports, websites, government directives, state media and customs records.

Write to Yuka Hayashi at Yuka.Hayashi@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Dow falls nearly 500 points after strong data, bearish comments by David Tepper

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U.S. stocks traded lower on Thursday, erasing most of their gains from their biggest rally in three weeks after a round of upbeat economic data and a warning from hedge-fund titan David Tepper that he was “leaning short” against both stocks and bonds on expectations the Federal Reserve and other central banks will continue tightening into 2023.

Positive economic news can be a negative for stocks by underlining expectations that monetary policy makers will remain aggressive in their efforts to quash inflation.

What’s happening
  • The Dow Jones Industrial Average
    DJIA,
    -1.51%
    fell 472 points, or 1.4%, to 32,903.
  • The S&P 500
    SPX,
    -1.99%
    shed 71 points, or 1.8%, to 3,807.
  • The Nasdaq Composite
    COMP,
    -2.84%
    fell 272 points, or 2.5%, to 10,437.

A day earlier, all three major indexes recorded their best gain in three weeks as the Dow advanced 526.74 points.

What’s driving markets

Investors saw another raft of strong economic data Thursday morning, including a revised reading on third-quarter gross domestic product which showed the U.S. economy expanded more quickly than previously believed. Growth was revised up to 3.2%, up from 2.9% from the previous revision released last month.

See: Economy grew at 3.2% rate in third quarter thanks to strong consumer spending

The number of Americans who applied for unemployment benefits in the week before Christmas rose slightly to 216,000, but new filings remained low and signaled the labor market is still quite strong. Economists polled by The Wall Street Journal had forecast new claims would total 220,000 in the seven days ending Dec 17.

“Jobless claims ticking slightly up but coming in below expectations could be a sign that the Fed’s wish of a slowing labor market will have to wait until 2023. While weekly jobless claims aren’t the best indicator of the overall labor market, they have remained in a robust range these last two months suggesting the labor market remains strong and has withstood the Fed’s tightening, at least for the time being,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office, in emailed comments.

“While weekly jobless claims aren’t the best indicator of the overall labor market, they have remained in a robust range these last two months suggesting the labor market remains strong and has withstood the Fed’s tightening, at least for the time being,” he wrote. “It’s no surprise to see the market take a breather today after yesterday’s rally as investors parse through earnings data, and despite some beats this week, expectations that earnings will remain as resilient in 2023 may be overblown.”

Stocks were feeling pressure after Appaloosa Management’s Tepper shared a cautious outlook for markets based on the expectation that central bankers around the world will continue hiking interest rates.

“I would probably say I’m leaning short on the equity markets right now because the upside-downside doesn’t make sense to me when I have so many people, so many central banks, telling me what they are going to do, what they want to do, what they expect to do,” Tepper said in a CNBC interview.

Key Words: Billionaire investor David Tepper would ‘lean short’ on stock market because central banks are saying ‘what they’re going to do’

A day earlier, the Conference Board’s consumer confidence survey came in at an eight-month high, which helped stoke a rally in stocks initially spurred by strong earnings from Nike Inc. and FedEx Corp. released Tuesday evening. This optimistic outlook helped stocks clinch their best daily performance in three weeks.

Volumes are starting to dry up as the year winds down, making markets more susceptible to bigger moves. According to Dow Jones Market Data, Wednesday saw the least combined volume on major exchanges since Nov. 29.

Read: Is the stock market open on Monday after Christmas Day?

In other economic data news, the U.S. leading index fell a sharp 1% in November, suggesting that the U.S. economy is heading toward a downturn.

Many market strategists are positioned defensively as they expect stocks could tumble to fresh lows in the new year.

See: Wall Street’s stock-market forecasts for 2022 were off by the widest margin since 2008: Will next year be any different?

Katie Stockton, a technical strategist at Fairlead Strategies, warned clients in a Thursday note that they should brace for more downside ahead.

“We expect the major indices to remain firm next week, helped by oversold conditions, but would brace for more downside in January given the recent downturn,” Stockton said.

Others said the latest data and comments from Tepper have simply refocused investors on the fact that the Fed, European Central Bank and now the Bank of Japan are preparing to continue tightening monetary policy.

“Yesterday was the short covering rally, but the bottom line is the trend is still short and we’re still fighting the Fed,” said Eric Diton, president and managing director of the Wealth Alliance.

Single-stock movers
  • AMC Entertainment Holdings 
    AMC,
    -14.91%
    was down sharply after the movie theater operator announced a $110 million equity capital raise.
  • Tesla Inc. 
    TSLA,
    -8.18%
    shares continued to tumble as the company has been one of the worst performers on the S&P 500 this year.
  • Shares of Verizon Communications Inc. 
    VZ,
    -0.53%
    were down again on Thursday as the company heads for its worst year on record.
  • Shares of CarMax Inc. 
    KMX,
    -6.60%
    tumbled after the used vehicle seller reported fiscal third-quarter profit and sales that dropped well below expectations.
  • Chipmakers and suppliers of equipment and materials, including Nvidia Corp.
    NVDA,
    -8.60%,
    Advanced Micro Devices 
    AMD,
    -7.17%
    and Applied Materials Inc.
    AMAT,
    -8.54%,
    were lower on Thursday.

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Business

Elon Musk Seeks Additional Funds for Twitter

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Elon Musk’s

team has reached out for potential fresh investment for Twitter Inc. at the same price as the original $44 billion deal, according to one shareholder who said he was contacted about the proposal.

Ross Gerber,

president and CEO at Gerber Kawasaki Wealth & Investment Management, said a representative for Mr. Musk contacted him about offering more shares Thursday.

Mr. Gerber said his firm had previously put up less than $1 million to back Mr. Musk’s takeover of Twitter, which was completed in late October at a price of $54.20 per share.

Semafor earlier reported the new outreach to investors.

Elon Musk has warned of dire financial challenges facing Twitter, the social media company he took over for $44 billion in October. WSJ’s Mark Maurer explains how the company is trying to fix its finances and avoid a potential bankruptcy. Photo Illustration: Laura Kammermann

Twitter didn’t immediately respond to a request for comment. 

Additional equity investments would likely dilute existing Twitter shareholders. The potential extent of the dilution from the latest fundraising effort couldn’t immediately be determined.

Mr. Musk this week sold more than $3.5 billion worth of

Tesla Inc.

TSLA -4.72%

stock. It was his second round of sales since buying Twitter Inc. Mr. Musk sold nearly 22 million Tesla shares over a three-day period ended Dec. 14, according to a regulatory disclosure made public Wednesday.

Mr. Musk’s ownership of Twitter has gotten off to a tumultuous start. Last month, Mr. Musk said Twitter had suffered “a massive drop in revenue” and was losing $4 million a day. He later invoked the specter of bankruptcy.

As part of the acquisition, Twitter took on around $13 billion in debt. That could leave the social-media company owing annual interest payments of more than $1 billion, analysts have estimated, compared with around $51 million in 2021.

Mr. Musk’s focus on Twitter has irritated some Tesla investors as the company tracks for its worst annual stock-price performance on record.

Mr. Gerber said he was reviewing the proposal, but had some questions about how Twitter was being run. Those include how long Mr. Musk intended to act as chief executive and any transition plan, he added. 

Last month, Mr. Musk said he expects to find someone else to run Twitter, without giving a specific timeline for when the appointment might happen. 

Twitter has been in turmoil since Elon Musk took over. To get a sense of what’s going on behind the scenes, The Wall Street Journal spoke with former Tesla and SpaceX employees to better understand how Musk leads companies. Illustration: Ryan Trefes

Mr. Gerber, who also is an investor in Mr. Musk-run electric car maker Tesla Inc., said he wasn’t concerned about how Twitter is doing so far, but said he wanted more communication. “I think they just need to be clear with everybody about what’s going on. Not just with Twitter, but Tesla,” he said.

Several Tesla investors, including Mr. Gerber, have expressed frustration recently that Mr. Musk’s involvement in Twitter might be to the detriment of the auto maker. Tesla’s stock is down more than 57% this year. 

Mr. Musk on Friday tweeted that “Tesla is executing better than ever” and that he had earlier that day gone over production progress at the company’s plant in Texas.

Write to Alexa Corse at alexa.corse@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the December 17, 2022, print edition as ‘Musk Seeks Additional Funds for Twitter.’

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Business

Crypto Entrepreneurs Fail to Capture Elon Musk’s Attention With $600,000 Goat Statue

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AUSTIN, Texas—Even as a cold night started to settle outside

Tesla

‘s headquarters here on Saturday, a group of cryptocurrency entrepreneurs had no plans to leave until

Elon Musk,

the man they named their currency after, accepted a 12,000-pound sculpture of a Mr. Musk-headed goat riding a rocket.

It is the latest stunt in the cryptocurrency space, where jokes and memes about digital currencies regularly flood social media. But a 6-ton sculpture as a marketing gimmick isn’t so common.

The creators of Elon GOAT say the name of their cryptocurrency was inspired by their respect for Mr. Musk. They and his other fans think he is the “greatest of all time,” or a “GOAT.” They took the admiration literally, spending $600,000 to create a sculpture of Mr. Musk’s head, wearing a gold-plated dogecoin necklace on a goat’s body. The rocket can move, pointing to the sky as if it is taking off. Gas lines run through it so that flames can shoot out of the back.

They trucked it to

Tesla Inc.’s

headquarters, in hopes Mr. Musk would accept the gift. The creators are calling called the event “GOATSgiving.”

Elon Musk has warned of dire financial challenges facing Twitter, the social-media company he took over for $44 billion in October. WSJ’s Mark Maurer explains how the company is trying to fix its finances and avoid a potential bankruptcy. Photo Illustration: Laura Kammermann

But about two hours after the co-founders of Elon GOAT parked the sculpture right outside the Tesla building, there was no sign of Mr. Musk.

Dustin Dailey, a security officer at Tesla, walked over to a group of about 15 people and said they couldn’t accept the sculpture on Mr. Musk’s behalf, but would find a spot for it on their property if Mr. Musk gave the thumbs-up.

But so far Mr. Musk hasn’t given any indication he would accept it or whether he knew the sculpture was there. Tesla didn’t respond to a request for comment

“I am fairly certain he does know about it,” said Mr. Dailey of the sculpture. “It’s all over Twitter.”

SHARE YOUR THOUGHTS

What do you think of the Elon Musk goat sculpture? Join the conversation below. 

Alec Wolvert, an Elon GOAT co-founder and chief marketing officer, said they were planning on camping out on a piece of public land off a toll road that overlooks the headquarters until Mr. Musk accepted the sculpture.

“We’re gonna stay here as long as possible,” Mr. Wolvert said. “I even heard some people say they were going to strap themselves to it.”

The idea of the sculpture came together last year. “It was an evening joke that kind of just came to fruition,” said

Ashley Sansalone,

an Elon GOAT co-founder.

Metal sculptor Kevin Stone spent nearly six months working on the sculpture of Elon Musk.



Photo:

Kevin Stone

The cryptocurrency entrepreneurs asked Kevin Stone, a metal sculptor in British Columbia, Canada, to make the giant sculpture with Mr. Musk’s head. The goal: to get Mr. Musk to tweet about the sculpture to his more than 118 million followers and draw attention to their cryptocurrency, the Elon GOAT.

“Elon tweeting us would legitimize the token,” said Mr. Sansalone, 40 years old.

Mr. Sansalone said he works on the token full time and previously ran a construction company and traded energy. Unlike bitcoin, ether or dogecoin, the Elon GOAT token is far from a household cryptocurrency name. It is ranked well outside the largest cryptocurrencies by market value, according to CoinMarketCap.

Mr. Musk’s head, which took nearly six months to complete was made by Mr. Stone. The goat body and rocket were made by others in Phoenix to speed up the project, Mr. Sansalone said. Then all the pieces were put together and attached to the back of a 70-foot long semi-truck trailer.

“When I first saw the statue my jaw dropped,” said DeMarco Hill, 51, who spotted it in September in Goodyear, Ariz., where he lives. He grabbed his 12-year-old son and they followed it. “It was something you’ve never seen before in your life.”

Mr. Hill, a trucker who owns his own company, Stay Ready Trucking, thought the stunt was so entertaining that he found Mr. Sansalone and asked if he could participate. Mr. Sansalone said Mr. Hill was needed because only someone with a special license could drive around the heaping pile of metal.

He has since driven the sculpture through California, Arizona and Washington, before bringing it to Texas. People who drive by honk their horns or give a thumbs-up, Mr. Hill said. 

“If I pull up to the side of the road it’s like people crowding around,” he said. “It gets crazy.”

Mr. Sansalone said the sculpture has mostly gotten a positive response. He hasn’t heard anyone mistaken Mr. Musk’s face for someone else. “I would say he is probably the most relevant person on the planet right now,” Mr. Sansalone said about Mr. Musk, the world’s richest person who recently bought Twitter Inc. for $44 billion.

In September, the sculpture sat in front of Tesla’s office in Palo Alto, Calif., during the company’s artificial-intelligence conference. Tesla employees crossed the street to take pictures with the sculpture, Mr. Sansalone said. Mr. Musk was at the conference, according to Twitter posts he made, and Mr. Sansalone assumes the billionaire saw the sculpture. 

“All there was to look at was a lit-up rocket erected in the middle of the street,” he said. 

On Saturday night, the group remained hopeful.

At one point in the evening, a group of about 20 people who were waiting outside started to chant “Elon claim your goat” in the hopes that the god of crypto, as one co-founder put it, would hear them.

“I’m a huge fan of Elon and I want to give this man his flowers while he’s alive,” said Aamir Manzoor, a 36-year-old from Toronto who is a holder of Elon GOAT. “He’s done a lot for the world.”

Write to Joseph Pisani at joseph.pisani@wsj.com, Alyssa Lukpat at alyssa.lukpat@wsj.com and Adolfo Flores at adolfo.flores@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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