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Auto Stock Roundup: Tesla's Cybertruck Craze, GM's Lawsuit Against Fiat & More
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In the past week, Tesla (TSLA - Free Report) has made a lot of headlines for its new Cybertruck, which was unveiled by Elon Musk. The specs of this new vehicle are something to marvel at, and the most impressive thing about the same is its battery technology. While the long-awaited Tesla electric truck is getting a lot of attention, it isn’t just this company that will hog the spotlight in the electric pickup market. Competition is building up, with Ford (F - Free Report) prepping its all-electric F-150, General Motors (GM - Free Report) entering the market in 2021, and Ford and Amazon-backed EV startup Rivian bringing something interesting as early as next year. To find out who is going to create the best electric truck and rev up in this race, we will have to wait till 2021. It remains to seen whether trucks can become tickets to high sales in the electric vehicle market.
1. Tesla’s CEO Elon Musk has finally unveiled his pet project, Cybertruck.With a wedge-like shape, ultra-hard 30X cold-rolled stainless-steel body and armored glass windows, the design of Tesla’s Cybertruck seems quite stylish and futuristic. There will be three models, the cheapest of which — at $39,900 — has a 7,500-pound towing capacity, a range of 250 miles and a startup speed of 0-60 mph of less than 6.5 seconds. However, during the launch of the vehicle, things didn’t end well as the windows pretty much cracked in a thousand directions when struck with a metal ball, which “didn’t go through” though. Nonetheless, more than 250,000 pre orders for the same have poured in for the Cybertruck. (Read more: Tesla Pickup Unveiled, But Will It Be First to Market?)
Meanwhile, Tesla’s relationship with Panasonic Corp. has hit a rough patch, after the latter recently denied any plan to set up a new battery cell factory for Tesla in China. It also suggested that Tesla could either access battery cells from Gigafactory 1 in the United States, wherein Panasonic is the exclusive supplier, or can simply use cells produced in China by other manufacturers. (Read more: Tesla-Panasonic Relation Strains Over Gigafactory 3 Production)
2. General Motors announced the filing of a federal racketeering lawsuit against its crosstown rival Fiat Chrysler for bribing United Auto Workers’ union officials. The lawsuit reveals how Fiat has been corrupting the bargaining process for several years in order to gain advantages, causing General Motors significant damages. Per General Motors, "Fiat was the clear sponsor of pervasive malpractice and paying millions of dollars in bribes over time to gain advantages, concessions, and incentives in negotiating, enforcing, and administrating labor agreements". (Read more: General Motors Slaps Fiat With Lawsuit for Bribing UAW Staff)
Notably, the #1 U.S. carmaker is recalling more than 640,000 pick trucks worldwide to fix seat belt failure issues that can set a vehicle’s carpeting on fire. The recall affects Chevrolet Silverado 1500 and GMC Sierra 1500 trucks from the 2019 and 2020 model years. It also impacts 2020 Silverado 2500 and 3500 models, along with Sierra 2500 and 3500 heavy-duty trucks. Notably, when the front seat belt pretensioners are deployed, hot gases expelled by the pretensioners could travel through a hole in the seat belt bracket, igniting the carpet. (Read more: General Motors Recalls 640,000 Pickups Over Seat Belt Issues)
3. BMW AG (BAMXF - Free Report) announced a deal with China’s battery manufacturers Contemporary Amperex Technology Co. Limited (“CATL”) and Samsung SDI. BMW is set to spend more than €10 billion euros ($11.07 billion) on battery cells, taking a major step toward the electric vehicle (EV) revolution. Post the deal, BMW’s original order volume of 4 billion euros with CATL will be increased to 7.3 billion euros. Notably, the contract duration is from 2020 to 2031. The firm has also entered into a supply contract with Samsung SDI for its fifth-generation electric drivetrains. Additionally, the company looks forward to double EV sales between 2019 and 2021. (Read more: BMW Bets Big on EVs, Signs 10B-Euro Battery Deal With CATL)
4. Volkswagen AG (VWAGY - Free Report) recently announced plans to invest more than €4 billion ($4.43 billion) in China in 2020, with around 40% of it to be spent on the development of e-mobility. The company intends to invest the amount in production, infrastructure, development and research of EVs, in sync with its e-mobility growth strategy. Volkswagen aims at significantly increasing EV production in China in 2020 to meet sustainability targets to become net-carbon neutral by 2050. Apart from e-mobility, the company looks forward to develop new mobility solutions, and make improvements in smart cities and autonomous driving in 2020. By 2025, it plans to achieve 1.5 million EV sales with 30 different EV models. (Read more: Volkswagen to Go Net-Carbon Neutral Via E-Mobility Success)
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
In the past week,while Ford has gained the most, Tesla has registered the maximum loss. Meanwhile, in the past six months, Tesla has registered the maximum gain, while Ford has declined the most.
Company
Last Week
Last 6 Months
GM
4.2%
3.8%
F
4.5%
-6.6%
TSLA
-6.6%
76%
TM
-0.3%
18.3%
HMC
1.1%
13.9%
HOG
3.4%
10.6%
AAP
0.3%
-0.4%
AZO
1.8%
13.1%
What’s Next in the Auto Space?
Car enthusiasts will be keeping a close watch on November 2019 U.S. car sales, which will be coming out early next week. Investors in the auto sector would be closely tracking the monthly sales reports of auto biggies like Honda Motor, Hyundai and Toyota Motor, among many others.
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This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
Image: Bigstock
Auto Stock Roundup: Tesla's Cybertruck Craze, GM's Lawsuit Against Fiat & More
In the past week, Tesla (TSLA - Free Report) has made a lot of headlines for its new Cybertruck, which was unveiled by Elon Musk. The specs of this new vehicle are something to marvel at, and the most impressive thing about the same is its battery technology. While the long-awaited Tesla electric truck is getting a lot of attention, it isn’t just this company that will hog the spotlight in the electric pickup market. Competition is building up, with Ford (F - Free Report) prepping its all-electric F-150, General Motors (GM - Free Report) entering the market in 2021, and Ford and Amazon-backed EV startup Rivian bringing something interesting as early as next year. To find out who is going to create the best electric truck and rev up in this race, we will have to wait till 2021. It remains to seen whether trucks can become tickets to high sales in the electric vehicle market.
(Read the Last Auto Stock Roundup here).
Recap of the Week’s Most Important Stories
1. Tesla’s CEO Elon Musk has finally unveiled his pet project, Cybertruck.With a wedge-like shape, ultra-hard 30X cold-rolled stainless-steel body and armored glass windows, the design of Tesla’s Cybertruck seems quite stylish and futuristic. There will be three models, the cheapest of which — at $39,900 — has a 7,500-pound towing capacity, a range of 250 miles and a startup speed of 0-60 mph of less than 6.5 seconds. However, during the launch of the vehicle, things didn’t end well as the windows pretty much cracked in a thousand directions when struck with a metal ball, which “didn’t go through” though. Nonetheless, more than 250,000 pre orders for the same have poured in for the Cybertruck. (Read more: Tesla Pickup Unveiled, But Will It Be First to Market?)
Tesla currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Meanwhile, Tesla’s relationship with Panasonic Corp. has hit a rough patch, after the latter recently denied any plan to set up a new battery cell factory for Tesla in China. It also suggested that Tesla could either access battery cells from Gigafactory 1 in the United States, wherein Panasonic is the exclusive supplier, or can simply use cells produced in China by other manufacturers. (Read more: Tesla-Panasonic Relation Strains Over Gigafactory 3 Production)
2. General Motors announced the filing of a federal racketeering lawsuit against its crosstown rival Fiat Chrysler for bribing United Auto Workers’ union officials. The lawsuit reveals how Fiat has been corrupting the bargaining process for several years in order to gain advantages, causing General Motors significant damages. Per General Motors, "Fiat was the clear sponsor of pervasive malpractice and paying millions of dollars in bribes over time to gain advantages, concessions, and incentives in negotiating, enforcing, and administrating labor agreements". (Read more: General Motors Slaps Fiat With Lawsuit for Bribing UAW Staff)
Notably, the #1 U.S. carmaker is recalling more than 640,000 pick trucks worldwide to fix seat belt failure issues that can set a vehicle’s carpeting on fire. The recall affects Chevrolet Silverado 1500 and GMC Sierra 1500 trucks from the 2019 and 2020 model years. It also impacts 2020 Silverado 2500 and 3500 models, along with Sierra 2500 and 3500 heavy-duty trucks. Notably, when the front seat belt pretensioners are deployed, hot gases expelled by the pretensioners could travel through a hole in the seat belt bracket, igniting the carpet. (Read more: General Motors Recalls 640,000 Pickups Over Seat Belt Issues)
3. BMW AG (BAMXF - Free Report) announced a deal with China’s battery manufacturers Contemporary Amperex Technology Co. Limited (“CATL”) and Samsung SDI. BMW is set to spend more than €10 billion euros ($11.07 billion) on battery cells, taking a major step toward the electric vehicle (EV) revolution. Post the deal, BMW’s original order volume of 4 billion euros with CATL will be increased to 7.3 billion euros. Notably, the contract duration is from 2020 to 2031. The firm has also entered into a supply contract with Samsung SDI for its fifth-generation electric drivetrains. Additionally, the company looks forward to double EV sales between 2019 and 2021. (Read more: BMW Bets Big on EVs, Signs 10B-Euro Battery Deal With CATL)
4. Volkswagen AG (VWAGY - Free Report) recently announced plans to invest more than €4 billion ($4.43 billion) in China in 2020, with around 40% of it to be spent on the development of e-mobility. The company intends to invest the amount in production, infrastructure, development and research of EVs, in sync with its e-mobility growth strategy. Volkswagen aims at significantly increasing EV production in China in 2020 to meet sustainability targets to become net-carbon neutral by 2050. Apart from e-mobility, the company looks forward to develop new mobility solutions, and make improvements in smart cities and autonomous driving in 2020. By 2025, it plans to achieve 1.5 million EV sales with 30 different EV models. (Read more: Volkswagen to Go Net-Carbon Neutral Via E-Mobility Success)
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
In the past week,while Ford has gained the most, Tesla has registered the maximum loss. Meanwhile, in the past six months, Tesla has registered the maximum gain, while Ford has declined the most.
Company
Last Week
Last 6 Months
GM
4.2%
3.8%
F
4.5%
-6.6%
TSLA
-6.6%
76%
TM
-0.3%
18.3%
HMC
1.1%
13.9%
HOG
3.4%
10.6%
AAP
0.3%
-0.4%
AZO
1.8%
13.1%
What’s Next in the Auto Space?
Car enthusiasts will be keeping a close watch on November 2019 U.S. car sales, which will be coming out early next week. Investors in the auto sector would be closely tracking the monthly sales reports of auto biggies like Honda Motor, Hyundai and Toyota Motor, among many others.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>