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Auto Roundup: General Motors (GM) & Ford (F) Make a Splash With Key Updates
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Last week, Detroit’s auto show was held after a 3-year hiatus due to the COVID-19 pandemic. However, this time it was a less glitzy affair with fewer model debuts and lower attendance. Among some of the key reveals were the 2023 Jeep Wrangler Willys 4xe, 2024 Chevy Blazer EV, 2023 Chrysler 300C, 2024 Chevy Equinox EV and 2024 Ford Mustang.
Meanwhile, the European Automobile Manufacturers Association (“ACEA”) released data for passenger car registrations for July and August 2022. The European Union (EU) passenger vehicle market contracted 10.4% in July but rebounded in August to witness year-over-year growth of 4.4%. With that, the EU passenger market snapped 13 straight months of decline. For the first eight months of 2022, passenger car volumes declined 11.9% year over year to 6 million units. Most of the countries in the EU witnessed a drop in registrations, including four key markets, during the said timeframe. Registrations in Italy, Germany, Spain and France witnessed a yearly decline of 18.4%, 9.8%, 9.4% and 13.8%, respectively.
Another highlight of last week was President Biden’s approval of the first round of funding for the creation of a nationwide electric vehicle (EV) charging infrastructure. With this first set of approvals, $900 million will be granted to build EV chargers across 53,000 miles of highway across 35 states. This is part of Biden’s bipartisan infrastructure package that includes $7.5 billion to establish a network of 500,000 EV charging stations across the country by 2030.
On the news front, General Motors (GM - Free Report) announced a deal with Lear and laid out investment plans for its Marion Stamping plant to boost its EV game. GM’s close peer Ford (F - Free Report) made the headlines as it’s actively progressing toward driverless technologies. Improvements in its ADAS technology to incorporate updates in BlueCruise and ActiveGlide would help improve safety.
Meanwhile, automotive equipment provider Magna International (MGA - Free Report) invested in Yulu Bikes and sees it as a vital step in its contribution toward a sustainable e-mobility future. Italian-American carmaker Stellantis (STLA - Free Report) struck a deal with UAW members to end a three-day strike at the Indiana plant. Finally, EV giant Tesla (TSLA - Free Report) had to put its expansion plan of the Berlin Gigafactory on the back burner as the local municipal committee dismissed the approval.
Inside the Headlines
General Motors struck a deal with Lear, per which the latter will supply electrification technologies for the U.S. auto giant’s Ultium EV platform. The technologies that would be provided by Lear include battery disconnect units, intercell connect boards and wire harnesses. The financial terms of the deal have been under wraps. With Ultium Drive playing a pivotal role in GM’s EV ambitions, the latest agreement with Lear for the supply of e-mobility technologies for its hardware platform bodes well.
In another important announcement, General Motors is set to invest $491 million at its Marion Stamping plant. This is to prepare the facility for manufacturing steel and aluminum stamped parts for future vehicles, including electric cars made at various GM assembly plants. The proposed investment will be used to buy and install two new press lines and complete press and die upgrades and renovations. It will also construct a 6,000-square-foot addition. The investment marks plant development and will rev up GM’s electrification progress as the demand for EVs reaches unprecedented levels.
Meanwhile, General Motors’ autonomous self-driving technology unit, Cruise, announced that it intends to expand its driverless ride service to Phoenix, AZ, and Austin, TX, in the next three months. The company noted that its operations in Arizona and Texas will initially be on a small scale but it aims to churn out revenues. Presently GM’s Cruise offers a wide range of robotaxi services in San Francisco. Riding on the successful launch in San Francisco, Cruise set its mind on expanding to new cities. Even though the adoption and execution of AV technology have been slow, Cruise looks optimistic and aims to generate $1 billion in revenues by 2025.
Ford is set to introduce the hands-free highway driving feature in its 2023 Ford Mustang Mach-E and 2023 Lincoln Corsair SUVs. These models’ Advanced Driver Assistance Systems (ADAS) will be updated with BlueCruise 1.2 and Lincoln ActiveGlide 1.2, the latest versions of the manufacturer’s sans driver feature. The ability to change lanes, stay within lane markings and adjust the pace around curves, all driverless, will be the major additions. The driver can activate hands-free lane change with a mere signal tap. The feature will also offer suggestions to change lanes in slow-moving traffic.
Another feature known as in-lane repositioning will be a highlight. This feature keeps the vehicle centered in its lane and shifts its position within the lane away from other vehicles to leave as much distance possible between it and the other vehicle. Meanwhile, the predictive speed assist feature will slow down the vehicle when it’s driving autonomously and can sense when a tight bend approaches. Ford’s ActiveGlide and BlueCruise features will use cameras and sensors in addition to lidar-mapping for hands-free driving on a stretch of more than 130,000 miles of dedicated highways in North America.
Magna announced its $77-million investment in Yulu Bikes, India’s largest technology-driven electrified shared mobility provider. Magna’s investment marks its entry into the rapidly-growing micro-mobility market. The deal leverages Magna’s expertise in design, engineering and manufacturing, and Yulu’s market strength in India and its software know-how. Magna will function as the exclusive battery-swapping provider for Yulu’s customers and support the buildup of the infrastructure required for millions of swaps per week.
Magna will own a stake and hold a seat on the board of the India-based company. The two companies will establish a new battery-swapping entity. The new Battery-as-a-Service (BaaS) entity will be known as Yulu Energy. It will create a nationwide battery charging and swapping infrastructure, likely reducing the upfront cost of buying EVs and expediting the transition to electric mobility in India.
Stellantis announced that United Auto Worker union members who had gone on strike on Sep 10 at its casting plant in Indiana rejoined work after a ratifying deal was made between the parties.More than 1,000 UAW members went on strike on Sep 10 at the plant because the company had deprived them of the basic health and safety needs that a workplace should offer. They alleged that the company refused to repair and replace the plant’s air conditioning and heating systems to secure in-house production.
Last week, the two sides parties announced an agreement and the strike was withdrawn after UAW Local 1166 workers voted to ratify the agreement. A prolonged strike at the largest casting facility would have led to a production hiatus, causing the rapid shutdown of Stellantis’ operations and a decline in profits.
Tesla has to hold back on its expansion plan of the Berlin Gigafactory. The EV king had intended to increase the factory by one-third and expand the nearly 750-acre factory site by another 250 acres to develop a freight depot, besides other factory parts.However, it seems that the expansion plan is enmeshed in bureaucracy as the municipal council of Grünheide, the city near Berlin where the Gigafactory is located, has indefinitely delayed the vote on the planned expansion.
The reasons for the delay are not quite clear, although the ripple effects of the ongoing Ukraine-Russia conflict may be hinted at. Russia has drastically cut down gas supplies to Europe in general and Germany in particular. Tesla’s intensive development plans call for a heavy requirement of energy. In light of a volatile market situation, Germany is likely acting cautiously in approving the expansion plan.
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on July and August 2022 commercial vehicle registrations to be released by the European Automobile Manufacturers Association soon. Also, stay tuned for any updates on how automakers will tackle the semiconductor shortage and make changes in their business operations.
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Auto Roundup: General Motors (GM) & Ford (F) Make a Splash With Key Updates
Last week, Detroit’s auto show was held after a 3-year hiatus due to the COVID-19 pandemic. However, this time it was a less glitzy affair with fewer model debuts and lower attendance. Among some of the key reveals were the 2023 Jeep Wrangler Willys 4xe, 2024 Chevy Blazer EV, 2023 Chrysler 300C, 2024 Chevy Equinox EV and 2024 Ford Mustang.
Meanwhile, the European Automobile Manufacturers Association (“ACEA”) released data for passenger car registrations for July and August 2022. The European Union (EU) passenger vehicle market contracted 10.4% in July but rebounded in August to witness year-over-year growth of 4.4%. With that, the EU passenger market snapped 13 straight months of decline. For the first eight months of 2022, passenger car volumes declined 11.9% year over year to 6 million units. Most of the countries in the EU witnessed a drop in registrations, including four key markets, during the said timeframe. Registrations in Italy, Germany, Spain and France witnessed a yearly decline of 18.4%, 9.8%, 9.4% and 13.8%, respectively.
Another highlight of last week was President Biden’s approval of the first round of funding for the creation of a nationwide electric vehicle (EV) charging infrastructure. With this first set of approvals, $900 million will be granted to build EV chargers across 53,000 miles of highway across 35 states. This is part of Biden’s bipartisan infrastructure package that includes $7.5 billion to establish a network of 500,000 EV charging stations across the country by 2030.
On the news front, General Motors (GM - Free Report) announced a deal with Lear and laid out investment plans for its Marion Stamping plant to boost its EV game. GM’s close peer Ford (F - Free Report) made the headlines as it’s actively progressing toward driverless technologies. Improvements in its ADAS technology to incorporate updates in BlueCruise and ActiveGlide would help improve safety.
Meanwhile, automotive equipment provider Magna International (MGA - Free Report) invested in Yulu Bikes and sees it as a vital step in its contribution toward a sustainable e-mobility future. Italian-American carmaker Stellantis (STLA - Free Report) struck a deal with UAW members to end a three-day strike at the Indiana plant. Finally, EV giant Tesla (TSLA - Free Report) had to put its expansion plan of the Berlin Gigafactory on the back burner as the local municipal committee dismissed the approval.
Inside the Headlines
General Motors struck a deal with Lear, per which the latter will supply electrification technologies for the U.S. auto giant’s Ultium EV platform. The technologies that would be provided by Lear include battery disconnect units, intercell connect boards and wire harnesses. The financial terms of the deal have been under wraps. With Ultium Drive playing a pivotal role in GM’s EV ambitions, the latest agreement with Lear for the supply of e-mobility technologies for its hardware platform bodes well.
In another important announcement, General Motors is set to invest $491 million at its Marion Stamping plant. This is to prepare the facility for manufacturing steel and aluminum stamped parts for future vehicles, including electric cars made at various GM assembly plants. The proposed investment will be used to buy and install two new press lines and complete press and die upgrades and renovations. It will also construct a 6,000-square-foot addition. The investment marks plant development and will rev up GM’s electrification progress as the demand for EVs reaches unprecedented levels.
Meanwhile, General Motors’ autonomous self-driving technology unit, Cruise, announced that it intends to expand its driverless ride service to Phoenix, AZ, and Austin, TX, in the next three months. The company noted that its operations in Arizona and Texas will initially be on a small scale but it aims to churn out revenues. Presently GM’s Cruise offers a wide range of robotaxi services in San Francisco. Riding on the successful launch in San Francisco, Cruise set its mind on expanding to new cities. Even though the adoption and execution of AV technology have been slow, Cruise looks optimistic and aims to generate $1 billion in revenues by 2025.
Ford is set to introduce the hands-free highway driving feature in its 2023 Ford Mustang Mach-E and 2023 Lincoln Corsair SUVs. These models’ Advanced Driver Assistance Systems (ADAS) will be updated with BlueCruise 1.2 and Lincoln ActiveGlide 1.2, the latest versions of the manufacturer’s sans driver feature. The ability to change lanes, stay within lane markings and adjust the pace around curves, all driverless, will be the major additions. The driver can activate hands-free lane change with a mere signal tap. The feature will also offer suggestions to change lanes in slow-moving traffic.
Another feature known as in-lane repositioning will be a highlight. This feature keeps the vehicle centered in its lane and shifts its position within the lane away from other vehicles to leave as much distance possible between it and the other vehicle. Meanwhile, the predictive speed assist feature will slow down the vehicle when it’s driving autonomously and can sense when a tight bend approaches. Ford’s ActiveGlide and BlueCruise features will use cameras and sensors in addition to lidar-mapping for hands-free driving on a stretch of more than 130,000 miles of dedicated highways in North America.
Magna announced its $77-million investment in Yulu Bikes, India’s largest technology-driven electrified shared mobility provider. Magna’s investment marks its entry into the rapidly-growing micro-mobility market. The deal leverages Magna’s expertise in design, engineering and manufacturing, and Yulu’s market strength in India and its software know-how. Magna will function as the exclusive battery-swapping provider for Yulu’s customers and support the buildup of the infrastructure required for millions of swaps per week.
Magna will own a stake and hold a seat on the board of the India-based company. The two companies will establish a new battery-swapping entity. The new Battery-as-a-Service (BaaS) entity will be known as Yulu Energy. It will create a nationwide battery charging and swapping infrastructure, likely reducing the upfront cost of buying EVs and expediting the transition to electric mobility in India.
Stellantis announced that United Auto Worker union members who had gone on strike on Sep 10 at its casting plant in Indiana rejoined work after a ratifying deal was made between the parties.More than 1,000 UAW members went on strike on Sep 10 at the plant because the company had deprived them of the basic health and safety needs that a workplace should offer. They alleged that the company refused to repair and replace the plant’s air conditioning and heating systems to secure in-house production.
Last week, the two sides parties announced an agreement and the strike was withdrawn after UAW Local 1166 workers voted to ratify the agreement. A prolonged strike at the largest casting facility would have led to a production hiatus, causing the rapid shutdown of Stellantis’ operations and a decline in profits.
Tesla has to hold back on its expansion plan of the Berlin Gigafactory. The EV king had intended to increase the factory by one-third and expand the nearly 750-acre factory site by another 250 acres to develop a freight depot, besides other factory parts.However, it seems that the expansion plan is enmeshed in bureaucracy as the municipal council of Grünheide, the city near Berlin where the Gigafactory is located, has indefinitely delayed the vote on the planned expansion.
The reasons for the delay are not quite clear, although the ripple effects of the ongoing Ukraine-Russia conflict may be hinted at. Russia has drastically cut down gas supplies to Europe in general and Germany in particular. Tesla’s intensive development plans call for a heavy requirement of energy. In light of a volatile market situation, Germany is likely acting cautiously in approving the expansion plan.
TSLA carries a Zacks Rank #2 (Buy), currently.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on July and August 2022 commercial vehicle registrations to be released by the European Automobile Manufacturers Association soon. Also, stay tuned for any updates on how automakers will tackle the semiconductor shortage and make changes in their business operations.