Electric vehicles (EVs) are gaining traction as automakers are discarding gasoline engines for electric motors. A host of factors such as pollution issues, government sops, cost advantages, technical superiority and stricter fuel emission standards have turned the fortunes in favor of EVs. In view of the changing dynamics, various automakers are actively working to introduce new models of electric vehicles that seem to be the future of the auto industry.
In this regard, U.S. auto giant Ford (F - Free Report) recently unveiled bold electrification plans for Europe and is set to launch several new models of electric vehicles in the next few years. The launch of EVs is part of Ford’s broader restructuring initiatives in Europe. The company expects to build more than 600,000 electric vehicles in Europe in the next six years.
Meanwhile, the top U.S. carmaker General Motors (GM - Free Report) is collaborating with tech giant Alphabet Inc. to roll out in-vehicle technology, in a bid to boost overall customer experience.
As we know, various auto companies are teaming up with technology firms to prepare themselves for a future that is likely to be dominated by electrification, connectivity and autonomous driving. The widespread usage of technology and rapid digitalization are resulting in fundamental restructuring of the automotive market. Considering the changing dynamics, there has been a radical change in the business models of auto companies.
(Read the Last Auto Stock Roundup here).
Recap of the Week’s Most Important Stories
1. Ford has reportedly agreed to divest its oldest plant in São Bernardo do Campo, Brazil to Brazilian automaker CAOA. Notably, this February, Ford decided to shutter the Brazilian plant in a bid to exit from the heavy truck segment in the region. Instead, it intends to bolster the business portfolio comprising SUVs and pickup trucks in Brazil.
In another development, the company — which is making a big electric push in Europe — recently unveiled its most comprehensive line-up of EVs. This will boost Ford’s top line and drive prospects in the coming years. The auto biggie will be launching 17 EVs in Europe by 2024, including eight this year. The new launches will include electrified variants of Kuga, Explorer and Puma SUVs, along with Mondeo hybrid wagon. Notably, the new Kuga Plug-In Hybrid will be Ford’s most electrified vehicle ever. The automaker also plans to launch a new Mustang-inspired electric sports utility vehicle next year. The company aims at achieving bulk of European sales from electric vehicles by 2022-end.
To facilitate charging of the EVs, Ford is set to collaborate with leading energy suppliers in Europe to offer home charging wall box installation services for plug-in hybrid customers. The company will set up an app, enabling users and operators locate, navigate to and pay for charging. (Read More:Ford to Vend Brazil Factory to CAOA, Bet Big on EVs)
2. General Motors recently signed a partnership deal with Alphabet Inc. to roll out in-vehicle technology, in a bid to boost overall customer experience. General Motors will use embedded Google technology for voice assistant, navigation and other in-vehicle applications available through the Google Play store to all compatible Chevrolet, Buick, GMC and Cadillac vehicles brands across the globe, beginning 2021. The automaker plans to roll out more models in the following years.
The integration of Google technology and service into General Motors’ vehicle infotainment systems will foster a more efficient driving experience. Further, General Motors will offer the unique infotainment features in the company’s vehicles, such as vehicle health status, service recommendations and in-vehicle commerce, while also complementing its offerings with the Google applications and services. General Motors’ infotainment features are currently powered by Android. (Read More: General Motors & Google Team Up for New In-Vehicle Technology)
3. Allison Transmission Holdings, Inc.(ALSN - Free Report) recently announced the acquisition of Lewisburg-based Walker Die Casting, Inc. and Alabama-based C&R Tool and Engineering, Inc. for $103 million. Notably, Walker Die is one of the longtime suppliers of aluminum transmission castings to Allison, while C&R is an affiliated tool and die maker that supplies Walker Die with metal working tools. The acquired firms will be run as Allison plants and continue to operate in their respective locations. While the transaction is not expected to have any material impact on earnings for the current fiscal year, the vertical integration would certainly lead to improvement in efficiencies, cost reductions and enable a better quality assurance process, going forward. (Read More: Allison (ALSN - Free Report) Announces Twin Acquisitions for $103 Million)
Allison currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
4. Cummins Inc. (CMI - Free Report) recently closed the acquisition of Hydrogenics Corporation, a Canadian fuel cell and hydrogen production technology provider. Notably, Hydrogenics’ expertise and innovative approach will help strengthen Cummins’ fuel-cell capabilities.The enterprise value of the deal totaled $290 million. Cummins owns 81% stake in Hydrogenics, while Air Liquide will keep 19%.The acquisition is in line with Cummins’ strategy to invest in a broader range of clean, fuel-efficient and high-performing products and technologies.Hydrogenics will now report under Cummins’ Electrified Power Business Segment. (Read More: Cummins' Hydrogenics Buyout to Boost Fuel-Cell Strength).
5. Volkswagen AG (VWAGY - Free Report) reported total unit sales of 35,412 in August, marking an increase of 9.8% year over year. On a year-to-date basis, unit sales were up 6.6% to 251,208 units. The company’s SUV sales surged 51% year over year to 19,192 units in August. This also helped offset a 17% drop in total car sales for the month. Year to date, Volkswagen’s SUV sales have grown 17% to 131,041 units, while total car sales dipped 2.6% to 123,349 units.
Despite a challenging industry condition, Volkswagen recorded growth for the sixth consecutive month. Continued growth of SUVs has contributed to the company’s balanced portfolio. Notably, in August, SUVs accounted for 54% of total unit sales. (Read More: Volkswagen August Sales Up 9.8% Y/Y Backed by SUV Growth)
Last 6 Months
The table above shows that all stocks traded in the green over the past week, with Harley Davidson (HOG - Free Report) being the maximum gainer. In the past six months, Tesla (TSLA - Free Report) has declined the most, while AutoZone has recorded the maximum gain.
What’s Next in the Auto Space?
Watch out for the usual news releases over the next week.
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