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Auto Stock Roundup: US Issues Policy for Automated Vehicles, Tesla Wins Largest Battery Project

TSLA HMC TM VLKAY AAP AZO GM

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The U.S. Department of Transportation issued a Federal policy that provides the framework for the safe testing and deployment of automated vehicles. Meanwhile, Tesla Motors, Inc. (TSLA - Free Report) won the largest lithium ion battery storage project in the world. However, the electric carmaker ran into a lot of legal trouble over the week. Even Volkswagen AG (VLKAY - Free Report) was sued by shareholders over the emissions scandal.

Among other major developments, General Motors Company (GM - Free Report) provided a strategic and operational overview ahead of its third-quarter 2016 earnings release. Honda Motor Co., Ltd. (HMC - Free Report) announced two motorcycles to be launched under the 2016 Montesa Trial lineup.

(Read the previous roundup here: Auto Stock Roundup for Sep 15, 2016)

Recap of the Week’s Most Important Stories

1. The U.S. Department of Transportation has issued the first guidelines for automated vehicles. The Federal policy has four key parts: a 15 point Safety Assessment to ensure safe design, development, testing and deployment of automated vehicles; a model state policy that distinguishes Federal and State responsibilities for regulation of such vehicles; NHTSA’s current regulatory tools that can be used to ensure that new technology is developed safely; and modern regulatory tools that policymakers can use in the future for safe and efficient deployment of new life-saving technologies.

2. Tesla has been selected by Southern California Edison for the largest lithium ion battery storage project in the world. The project requires the automaker to install a 20 MW/80 MWh Powerpack system at the Southern California Edison Mira Loma substation. The system will use electricity from the grid during off-peak hours to charge. This stored energy will be used to meet the peak time energy needs of the Los Angeles basin (read more: Tesla Wins Southern California Edison's Battery Project).

Meanwhile, four shareholders have filed separate lawsuits against Tesla with regard to its proposed acquisition of SolarCity. The lawsuits may result in a delay or prevention of the merger as well as increased costs for both companies. Separately, 126 owners of the Model S P85D in Norway are seeking reimbursements as they feel that the car’s power and speed are not as per specifications.

Tesla currently carries a Zacks Rank #3 (Hold).

3. Volkswagen’s 1400 shareholders have demanded that the German auto manufacturer needs to pay 8.2 billion euros ($9.1 billion) in damages claims over its emissions scandal, a German court announced on Wednesday. These investors are suing the company because they believe that it should have disclosed the fact that it was being investigated sooner (read more: 1400 Investors File Claims Against Volkswagen for Over $9 Billion).

Currently, Volkswagen carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

4. General Motors reiterated its EPS guidance in the range of $5.50−$6.00 for 2016. The automaker is focused on sustainable growth, with a target of $5.5 billion in cost savings by 2018. It has already achieved cost savings of $3.1 billion through the first half of 2016, and expects to exceed the target by 2018. Further, General Motors anticipates growth in the China market to be in the range of 3−5% in the near term, and industry volume to grow to over 30 million units by 2020.

General Motors is currently in Phase III of its Captive Expansion plan, which commenced in 2010. In this phase, the company aims to increase its share of prime loan channel and grow its floorplan business in North America. It also intends to expand its geographical footprint and product portfolio in the rest of the world. Finally, the company aims to increase loyalty among users by expanding its customer relation management activities. General Motors currently carries a Zacks Rank #3.

5. Honda announced that the 2016 Montesa Trial motorcycle lineup will include the Montesa Cota 300RR and the Montesa Cota 4RT260. The 2017 Montesa Cota 4RT260 will be sold from November and the 2017 Montesa Cota 300RR from December. Honda carries a Zacks Rank #3.

Performance

Most auto sector companies recorded gains last week, led by General Motors. Meanwhile, Advance Auto Parts Inc. (AAP - Free Report) was the biggest loser once again.

Toyota Motor Corporation (TM - Free Report) retained its position as the biggest gainer over the last six months, while Tesla lost the most over this period.

Company

Last 1-Week Period

Last 6 Months

GM

+4.6%

+0.7%

F

-0.4%

-11.0%

TSLA

+4.5%

-12.4%

TM

+1.7%

+10.0%

HMC

+0.5%

+7.9%

HOG

+3.0%

+5.6%

AAP

-2.9%

-7.5%

AZO

+1.7%

-4.4%

Auto-Tires-Trucks Sector Price Index

 

Auto-Tires-Trucks Sector Price Index

What’s Next in the Auto Space?

AutoZone, Inc. (AZO - Free Report) will report fourth-quarter (ended Aug 27, 2016) fiscal 2016 results before the opening bell today.

Later today, Lear Corporation is slated to pay a quarterly cash dividend of 30 cents per share to shareholders of record as of Sep 1, 2016.

On Sep 23, 2016, Harley-Davidson will pay a cash dividend of 35 cents per share to shareholders of record as of Sep 13, while General Motors will pay a dividend of 38 cents per share to stockholders of record as of Sep 9.

On Sep 26, Thor Industries will report its fourth-quarter and fiscal 2016 earnings results.

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