The U.S.-listed shares of Toyota Motor Corp. TM JP:7203 rose 0.8% in morning trading Wednesday, said U.S. sales in June rose 14.9% from a year ago. The Japan-based automaker’s North America division (TMNA) reported it sold 195,448 vehicles in the U.S. in June, on a volume and daily-selling rate (DSR) versus June 2022, as Toyota-brand sales rose 1.4% to 168,680 vehicles and Lexus-brand sales jumped 18.1% to 26,768 vehicles. Sales of electrified vehicles total 51,535, or 26.4% of total monthly sales. For the first half of 2023, U.S. sales fell 0.7% to 1,038,520 vehicles, with electrified vehicle sales representing 26.0%…
Tag: General Motors Co.
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Driverless cars are driving San Francisco crazy — ‘They are not ready for prime time’
A street was blocked for road work in my San Francisco neighborhood this month, with a worker holding a large STOP sign to direct traffic.
A white car did as instructed, stopping in the middle of the intersection and blocking traffic at the four way intersection. No one was in the driver’s seat and there were no passengers, nor any training drivers — it was a Cruise driverless car, one of many that have flooded streets in the city in the last two years.
The public works employee holding the sign was flummoxed as how to get the car to move away. After several minutes, the car slowly backed its way out and crossed the street, but ended up on the wrong side. After another 10 minutes, it managed to pull itself together, get in the right lane and drive down the hill.
Most San Francisco residents can tell a similar story. The growing driverless car fleets in San Francisco are both a fascinating glimpse of science fiction come to life and a scary example of how Big Tech and auto companies have run roughshod over a congested city, with technology that really isn’t ready yet and little regulation to keep it at bay.
Now, the problem is coming to a head. San Francisco public officials have had enough, and are speaking out about safety threats ahead of a hearing next month that could let companies expand into larger fleets of fare-generating robotaxis.
“They are not ready for prime time,” San Francisco Fire Chief Jeanine Nicholson told MarketWatch in an interview.
“They have run over our hoses, they have blocked our fire engines from going on calls, they have just blocked our vehicles from getting down streets where there is a possible fire. They have just done a multitude of things. We had to break the window of one once because we could not get its attention,” Nicholson said.
While the average citizen can laugh at the stalled cars in city streets, the vehicles represent a major impediment for first responders. The San Francisco fire chief believes they put the city’s firefighters and residents at risk.
“Response time matters — a fire can double in size in a minute,” she said.
Aaron Peskin, president of the city’s Board of Supervisors, said there have been 66 incidents in which driverless cars interfered with first responders this year. But the city has little control over the cars operated by Cruise, a unit of General Motors Co.
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and Waymo LLC, a subsidiary of Google parent Alphabet Inc.
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Both companies already have Department of Motor Vehicle permits to deploy a driverless passenger taxi service, a process Peskin described as “Kafka-esque.”“You have this thing where the DMV colluded with the industry to redact information that otherwise was public,” he said, referring to the result of a lawsuit Waymo filed last year against the DMV to keep its crash data private, arguing that it held trade secrets. “The funny thing is it’s not like San Francisco is trying to say ‘let’s put the genie back in the bottle.’ We are trying to ensure that our streets are safe. They have become too congested.”
Both companies are seeking to expand their operations into fare-generating robotaxis in San Francisco, leading to a crucial meeting of California’s Public Utility Commission now slated for July. Waymo is seeking to begin passenger robo-taxi service in the city, while Cruise is seeking to expand its passenger robo-taxi service to the entire city, 24 hours a day, and remove exclusions of steep hills and roundabouts, deploying 100 vehicles. Helpfully for the companies, one PUC commissioner appointed by Gov. Gavin Newsom in 2021 is John Reynolds, who was managing counsel of Cruise until 2019.
Resistance is building locally and nationally. Cathy Chase, president of Advocates for Highway and Auto Safety, a nonprofit in Washington seeking more regulation and data transparency on autonomous vehicles as part of its mission for more highway and road safety, said it was “illogical and irresponsible at best, and dangerous and deadly at worst, to go forward with any expansion until the significant problems have been resolved.”
The San Francisco Municipal Transportation Authority (SFMTA) wrote letters of protest to both company’s applications. In May, the SFMTA said that since it wrote its first letter in January, “new hazards from driverless AV operations in San Francisco have been reported, and general public complaints about driverless AV operations have increased significantly.”
In May, a Waymo vehicle hit and killed a small dog that was off leash, while a test driver was at the wheel, in what the company said was an unavoidable accident. In June, a Cruise vehicle with no driver started to enter a mass shooting scene in the Mission District, and a video on Twitter showed a police officer yelling to get the car removed. Cruise said a lane was open for emergency vehicles and that its car did a U-turn and pulled over. In April, five Waymo cars stopped and blocked traffic in the Balboa Terrace area, in dense fog, a big problem for the vision systems.
The letters note that both Waymo and Cruise have “committed numerous violations that would preclude any teenager from getting a California’s Driver’s License.” The SFMTA also calls out the PUC for relying on the DMV for approvals, saying that its draft resolution to approve expansions of both companies is an attempt to “deflect rather than exercise the Commission’s duty to protect public safety.”
Waymo said it has been working with public safety officials and provides them a phone number to reach Waymo directly in the event that one of its cars stop. Cruise said it is proud of its safety record “which is publicly reported and includes millions of miles driven in an extremely complex urban environment.” Both companies have over 30 letters of support for their plans, from a range of groups including many representing the disabled, such as the National Federation of the Blind of California.
“It’s because of the donations,” Peskin said.
But the city’s fire chief Nicholson said there needs to be more from the companies than PR statements and lessons on how to stop their vehicles.
“They really need to sit down with us and figure out a solution,” she said, adding that when the fire department is in the middle of putting out a fire or rescuing victims or dealing with a health emergency, “to have to handle one of their vehicles, it’s just ridiculous.”
As is the case with many new technologies, history does tend to repeat itself.
Chris Gerdes, a professor of mechanical engineering at Stanford University and co-director of the Center for Automotive Research at Stanford (CARS) said that as part of work he has been doing with Ford Motor Co.
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he has been researching ethical and legal issues associated with automated vehicles. These same issues came up when the first automobiles started to arrive on public streets at the turn of the 20th century, clashing with horses and buggies.“You go back and look at the debates when the car came out,” Gerdes said, and “there were a lot of debates around should these things be allowed on the road, should they be allowed everywhere? These questions that are coming now were asked about cars back in the day. They can block the road, they can scare horses. Is this something we want to have on the roads? Is it even legal for them to be on the roads?”
But there is a need to demonstrate that driverless cars are compatible with existing laws and the uses of the roads, he said. “The question becomes at what point do these isolated incidents add to up to danger, to what extent do these compromise the city’s priorities or mobility and traffic flow.” He said they need to compare the autonomous-vehicle data with that from human drivers.
The SFMTA provided comparison data in its letters of protest. According to the SFMTA, based on data filed with the NHTSA, Cruise’s injury crash rate is estimated to have been 506 injury crashes per 100 million vehicle miles traveled (VMT) between June and November, 2022—approximately 6.3 times the 2021 national average, which is 80 injury crashes per 100 million VMT. Waymo’s injury crash rate is estimated to be 104 injuries per 100 million VMT, approximately 1.3 times the national average, the SFMTA said, when looking at the same period.
“The collision rate from that small fraction of Cruise driverless operations appears to exceed the collision rate for human drivers,” the SFMTA said in its Cruise letter. For Waymo, the agency said it recommends the commission expand on the findings with a more thorough analysis. “Within the complex driving environment of San Francisco city streets, we must conclude that the technology is still under development and has not reached this goal,” the SFMTA said in its Waymo letter.
Some in San Francisco are hopeful the delay of the PUC meeting to July 13 is a good sign that the commission is listening to more input from city officials. In its letters, the SFMTA and the San Francisco City Attorney hint at the next step they could take, noting that the PUC “must conduct an environmental review” of Cruise’s and Waymo’s expansion plans, because its actions could cause environmental impacts. What goes unsaid is that the city could seek to compel such a review with a lawsuit.
Peskin said he has received letters from former employees of the companies saying that autonomous robotaxis are, as the fire chief said, “not ready for prime time.” The workers said they had signed nondisclosure agreements that kept them from saying so publicly. Peskin suggested it could end up like the tobacco industry’s whistleblower case.
“We would rather work with them than waste taxpayers’ money on lawsuits,” Peskin said, adding that the companies could continue to test their cars with test drivers — an option that is not likely to be acceptable by the companies seeking to make money from their big investment.
“San Francisco is the perfect place to test them,” he said. “But they still haven’t worked these kinks out.”
The city of San Francisco is beaten down at the moment, thanks in part to its past close relationship with tech. As the downtown core suffers from the departure of the tech workers that defined it for the past decade, city officials are doing what they can to ensure that the technology some of them created does not become the next hated addition to the city.
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Tesla beats 2nd quarter estimates with deliveries of 466,000 vehicles
Tesla Inc. delivered a record number of vehicles in the second quarter, beating market estimates after the electric carmaker increased discounts and incentives, the company reported on Sunday.
The Elon Musk-led electric vehicle manufacturer delivered 466,140 vehicles in the three months ended June 30 and produced 479,700 vehicles. The second quarter of 2023 marked the fifth period in a row when Tesla reported a higher level of vehicles produced compared to deliveries.
Analysts on average had expected Tesla to deliver 445,000 cars, according to analysts polled by Refinitiv.
Tesla delivered 254,695 vehicles in the year-ago quarter.
Deliveries are a carefully watched number by Tesla shareholders and are the closest approximation of sales disclosed by the company.
Tesla said total production rose 85.5% to nearly 480,000 vehicles in the three months ended June 30, from a year earlier.
The company delivered 446,915 Model 3 compact cars and Model Y sport-utility vehicle, as well as 19,225 of its Model S and Model X premium vehicles.
Tesla increased discounts for vehicles to a $1,600-to-$7,500 range and made all of its Model 3s eligible for full federal credits of $7,500 starting in June in the United States.
Earlier this year, Tesla cut prices globally by as much as 20% after missing Wall Street delivery estimates for 2022.
Tesla is expected to achieve record sales yet again in China, its second-largest market after North America, despite competition from market leader BYD.
The company said it will post financial results for the second quarter after the market close on Wednesday, July 19, 2023.
Earlier this year Ford Motor
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and General Motors
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as well as fast-charging equipment makers agreeing to adopt Tesla’s North American Charging Standard (NACS).Tesla
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shares closed at $261.77 on Friday ahead of the second-quarter deliveries report. -
Goldman in talks to offload Apple credit card, savings products to American Express, source says
Goldman Sachs is in talks to offload its Apple credit card and high-yield savings account products to American Express, a source told CNBC’s Leslie Picker.
Goldman Sachs, Apple and American Express declined to comment.
The talks come amid a broader retreat by Goldman from its largely failed consumer banking initiatives, for which CEO David Solomon has taken a great deal of heat. Last week, CNBC reported that the Wall Street giant is preparing to take a huge writedown on its 2021 acquisition of fintech lender GreenSky.
The Wall Street Journal first reported the Goldman talks with American Express. The newspaper said there’s no assurance of a deal, nor is an agreement close.
It would mark an abrupt reversal for the two corporate giants. In October, the Journal reported Goldman and Apple renewed their partnership through 2029. And in April, Goldman Chief Financial Officer Denis Coleman touted a deepening of the partnership.
“This week, we announced the launch of a savings account for Apple Card users. We are excited to deepen our partnership with Apple through this additional offering and to introduce another source of deposit funding for the firm,” Coleman said at the time.
The Journal also reported Friday that Goldman is talking about unloading its General Motors card partnership. GM declined to comment to CNBC.
– CNBC’s Steve Kovach, Phil LeBeau and Hugh Son contributed to this report.
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Goldman Sachs is looking to leave Apple partnership: WSJ
Goldman Sachs Group Inc.
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is weighing whether to leave its partnership with Apple Inc.
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amid a broader retreat from consumer banking, the Wall Street Journal reported on Friday. The Journal, citing people familiar with the matter, said Goldman was seeking ways to hand off its Apple credit card and other initiatives from the partnership to American Express Co.
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Goldman has also considered offloading its card partnership with General Motors Co.
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to American Express or another card issuer, the Journal reported. But any deal isn’t guaranteed, and would require Apple’s approval, the Journal said. Shares of Goldman Sachs were down 0.2% after hours. Shares of Apple, which ended Friday trading with a $3 trillion valuation, inched 0.1% lower after hours. -
In Iran, a restorer brings back to life famed Cadillac Sevilles once assembled in the country
TEHRAN, Iran (AP) — The sleek, polished dark blue 1978 Cadillac Seville eased slowly out of a showroom near Iran’s capital, its driver carefully inserting the 8-track tape that came with it to blast the sounds of a time long since past.
The Sevilles, once assembled in Iran, represented the height of luxury in the country just before the 1979 Islamic Revolution. General Motors had partnered with an Iranian firm to build the sedans, selling them for two-and-a-half times the price in America at the zenith of the country’s oil wealth.
Today, Khosro Dahaghin’s passion for restoring the cars means he carefully examines each frame, component and stitch of the Sevilles in Iran, a challenge that’s only grown as parts become scarce, the vehicles get older and as the country faces U.S. sanctions over its nuclear program.
“The most luxurious and the most special car that was assembled in Iran was Cadillac Iran,” Dahaghin told The Associated Press as he wore a necklace bearing the iconic Cadillac crest. “The first time this car was assembled outside U.S soil was in Iran. At that time I can say no other brand could rival this car in any aspect imaginable.”
To the uninitiated, the Seville may seem like a strange pick for a sought-after antique car with its almost boxy frame and wood-accented interior. However, it represented a sea change for Cadillac at a time when American buyers sought the smaller luxury cars coming from European manufacturers. Cadillac had been better known for the massive, finned cars of the past and the Seville’s fuel economy and handling caught the attention of drivers.
In the Seville, car buyers got a powerful, fuel-injected V8 engine, a pillowy interior, power seats and automatic door locks and windows. A base model Seville initially sold for $12,479 in 1975 when it entered the market — the equivalent today of over $70,000. General Motors produced nearly 57,000 Sevilles in the 1978 model year alone.
Back then, Iran had the only Cadillac production outside of the United States. GM created General Motors Iran Ltd., which produced the Seville and other vehicles from so-called knock-down kits from Detroit. The Seville represented the most luxurious vehicle on the road assembled in Iran, under the supervision of American engineers.
The Sevilles went for some $35,000 at the time they were introduced — more than what American consumers paid, in part due to higher import duties.
“As soon as they have the money, they want a pair of Levi’s and a car,” a General Motors official said of Iranians, according to a New York Times story about the Seville there in 1977.
How many were built remains a question among Iran’s car aficionados.
Saeed Shobeiri, the editor-in-chief of Machine Magazine in Tehran, said estimates ranged as high as over 2,600. Michael T. Albano, a Cadillac spokesman in the U.S., said he believed some 2,500 were built.
But the 1979 Islamic Revolution saw the overthrow of the American-backed shah and the installation of Iran’s theocratic government. Americans and GM left the country. Sevilles continued to be built from the remaining knock-down kits for several more years as Iran nationalized the GM Iran plant, creating the manufacturer Pars Khodro that stills exists today.
GM ultimately was awarded some $20 million from the Iran-United States Claims Tribunal, set up as part of the Algiers Accords that saw the captives taken at the U.S. Embassy in Iran freed. Today, Shobeiri estimated as many as 60 Sevilles are street-worthy, with more than 100 others unable to be driven.
That’s where Dahaghin and his colleagues come in. Since 2013 after being inspired by the former MTV reality show “Pimp My Ride,” Dahaghin restores Cadillac Sevilles at his garage in Roudehen, some 45 kilometers (30 miles) east of downtown Tehran.
There, Seville frames sit outside a shop bearing the Cadillac crest. Inside, Dahaghin runs his hands over every line of a car body, those not yet worked on bearing signs of rust and their age. One of the Seville’s big V8 engines sat alongside.
“Over time, these cars became broken and worn out as a result of poor usage and lack of proper maintenance,” Dahaghin said. “Some of them were destroyed. Now we restore these cars after years and when they are back on streets they are both very beautiful and very special compared to other cars.”
But the restoration is not easy. Each vehicle can take up to a year and a half to finish to Dahaghin’s specifications. Finding components can be a challenge as well, with some occasionally being hand-carried back into Iran by those traveling abroad.
“I will not sell this piece of art to anyone who makes an offer,” Dahaghin said. “The buyer must appreciate the value of this artwork.”
A restored Seville can go for as much as $40,000 in Iran now, said Mohammad Khorshidizadeh, a classic car specialist. That’s a fortune as the Iranian rial now trades at 492,000 to $1. However, Iran has shut itself off from the foreign car market since the re-imposition of sanctions since then-President Donald Trump unilaterally withdrew America from Tehran’s nuclear deal in 2018. That means a vehicle like a 2016 Mercedes-Benz S-Class can go for $400,000.
General Motors isn’t selling cars now to Iran to comply with U.S. sanctions, but “should economic situations evolve, GM will assess the market situation and our business priorities,” Albano said.
“We were unaware. However, not surprised” about Iranians rehabilitating old Sevilles, Albano said. “Cadillac’s appeal among young customers continues to increase around the globe.”
For fans of the classics and the Iranian automotive history, like 29-year-old Arsalan Asgharzadeh who recently bought a refurbished Seville from Dahaghin, nothing compares to a vintage Cadillac.
“If you experience driving a Cadillac, you will always want to drive a Cadillac,” Asgharzadeh said.
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Associated Press writer Jon Gambrell in Kyiv, Ukraine, contributed to this report.
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Toyota stock having best week since 2009 after annual meeting, new EV goals
Akio Toyoda, Chairman of Toyota Motor Corp.
Yoshikazu Tsuno | Gamma-rapho | Getty Images
DETROIT – Toyota Motor’s stock is having its best week since 2009 following the company disclosing plans for its next-generation electric vehicles and shareholders voting in favor of its new leadership, including former CEO Akio Toyoda as chairman.
Shares of Toyota on the New York Stock Exchange on Thursday achieved a new 52-week high before closing at $168.18 per share, up 1.6% during intraday trading and roughly 13% this week.
If shares can retain their current momentum, it would be the stock’s best week since April 2009 when they increased 14.5%. It would also mark only the third double-digit weekly gain in more than two decades.
The notable increase in the relatively mundane stock follows additional details about the company’s EV strategy, which has previously been criticized by some for not being aggressive enough.
Ahead of its annual meeting Wednesday, Toyota outlined plans for a new generation of EVs to rival industry leaders Tesla and China-based BYD. The company said it plans to launch its next-generation EVs starting in 2026, including vehicles with highly touted “solid-state batteries” by 2027 or 2028.
Solid-state batteries can be lighter, with greater energy density and provide more range at a lower cost than today’s EVs with lithium-ion batteries.
People arrive to attend an annual shareholders’ meeting for Toyota Motor in the city of Toyota, Aichi Prefecture on June 14, 2023. Toyota is under pressure from large institutional investors for chairman Akio Toyoda to step down over his lukewarm embrace of electric vehicles.
Str | Afp | Getty Images
Takero Kato, president of BEV Factory, said that Toyota is targeting a driving range of 1,000 kilometers (620 miles) for its EVs. BEV Factory aims to produce about 1.7 million vehicles by 2030, he said.
“Proactive disclosure of a new tech strategy featuring next-gen batteries and giga casting delivered a riposte to the view that it is lagging in BEVs. We await quantitative disclosure on BEV profit ahead,” Morgan Stanley analyst Shinji Kakiuchi said Wednesday in an investor note.
Following the announcements, Toyota shareholders Wednesday aligned their voting with company recommendations, including leadership approval and voting down a shareholder proposal requiring Toyota to review its climate-related lobbying activities.
Shareholders also approved the company’s new leadership and board, including the appointment of CEO Koji Sato as a director and Toyoda – grandson of automaker’s founder – as chairman.
Shares of Toyota on the NYSE are up about 23% this year, as the auto industry continues to recover from the coronavirus pandemic and supply chain issues that led to record low vehicle inventory levels.
Toyota’s gains put it in the middle of Japanese automaker stocks, ahead or in-line with the Detroit automakers and behind shares of Tesla, which have more than doubled in 2023.
Here’s how other automaker stocks have performed this year compared to Toyota:
Auto stocks so far this year
*Shares of these companies are traded in the U.S. as American depositary receipts.
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Stocks making the biggest moves midday: Sonoma Pharmaceuticals, Braze, Adobe and more
GMC pickup trucks are displayed for sale on a lot at a General Motors dealership in Austin, Texas, Jan. 5, 2023.
Brandon Bell | Getty Images
Check out the companies making headlines in midday trading.
Braze — Shares of the consumer engagement platform rallied 16%. On Thursday, Braze posted a non-GAAP loss of 13 cents on revenue of $101.8 million. Analysts called for a loss of 18 cents per share and revenue of $98.8 million, according to FactSet. Goldman Sachs reiterated its buy rating on the stock following the report, noting artificial intelligence should help the company gain market share.
Joby Aviation, Archer Aviation — On Friday, Canaccord Genuity initiated coverage of Joby Aviation and Archer Aviation with a buy rating, saying the urban air mobility firms are positioned for the long term. Joby shares jumped about 11%, while Archer shares rose 6.2%.
Sonoma Pharmaceuticals — Shares surged 44%. Sonoma Pharmaceuticals on Thursday announced an intraoperative pulse lavage irrigation treatment that could replace IV bags for some surgical procedures.
Tesla, General Motors — Tesla rallied 4% and General Motors added 1%. On Thursday, the companies announced a partnership that gives GM access to Tesla’s North America charging stations. GM CEO Mary Barra said it will save the company up to $400 million of its previously announced $750 million investment to build out electric vehicle charging.
DocuSign — DocuSign shares slid 2.5%. In an earnings call Thursday, CEO Allan C. Thygesen said, “We are seeing more moderate pipeline and cautious customer behavior coupled with smaller deal sizes and lower volumes.” Initially, shares rose in extended trading Thursday after DocuSign beat fiscal first-quarter expectations on the top and bottom lines, posting adjusted earnings of 72 cents a share on $661 million in revenue. Analysts polled by Refinitiv called for earnings of 56 cents a share and $642 million of revenue.
Adobe — Shares popped 3.4% after Wells Fargo upgraded the software stock to an overweight rating, saying AI should drive continued upside for the stock.
Target — Target declined about 3.3% after Citi downgraded the retail stock to neutral from buy, saying sales may have peaked at the big-box merchandiser.
— CNBC’s Michelle Fox, Alex Harring and Samantha Subin contributed reporting.
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GM, Samsung plan new EV battery cell factory in US
DETROIT (AP) — General Motors and South Korea’s Samsung SDI plan to invest more than $3 billion in a new electric vehicle battery cell plant in the United States, the companies said Tuesday.
They did not announce the intended location of the new factory, which is expected to begin operations in 2026, GM and Samsung SDI said in a statement. GM and Samsung SDI plan to jointly operate the factory, which is expected to make nickel-rich prismatic and cylindrical cells. The companies said it was expected to create thousands of jobs.
The project is GM’s fourth joint venture battery cell factory. It has announced three others with South Korea’s LG Energy Solution. A 900-worker factory near Warren, Ohio, is starting to build cells, while plants in Spring Hill, Tennessee, and Lansing, Michigan, are in the works.
The announcement coincides with a visit to the United States by South Korean President Yoon Suk Yeol. The two countries are marking the 70th anniversary of their alliance with a summit that was also feature announcements on new nuclear deterence efforts, cyber security and other areas of cooperation.
Samsung was picked as the partner for the fourth plant after some Chevrolet Bolt batteries made by LG caught fire, forcing GM to recall about 142,000 vehicles due to a battery manufacturing problem. The recall cost GM about $1.9 billion, and the automaker said it was reimbursed for the cost by LG.
“We will do our best to provide the products featuring the highest level of safety and quality produced with our unrivaled technologies to help GM strengthen its leadership in the EV market,” Samsung SDI President and CEO Yoon-ho Choi said in a statement.
The new factory will have more than 30 gigawatt hours of capacity and will increase GM’s total U.S. battery cell capacity to about 160 gigawatt hours when it is at full production, the companies said.
GM has pledged to sell only electric vehicles by 2035. It has said that because of its huge investment in battery plants and a North American EV supply chain, six of its current or upcoming electric vehicles are to be eligible for the full $7,500 U.S. federal EV tax credit. They are the Chevrolet Bolt and Bolt SUV, the Chevrolet Silverado electric pickup, the Cadillac Lyriq SUV and the upcoming Chevy Blazer and Equinox electric SUVs.
Under the U.S. Inflation Reduction Act, EVs must be assembled in North America, and a certain percentage of their battery parts and minerals have to come from North America or a U.S. free trade partner to qualify for the full tax credit.
Workers at the Ohio battery plant have voted to join the United Auto Workers union, which is pushing to organize the other factories and get top wages for the workers. Union officials have said they must organize the battery plants so that workers making engines and transmissions have a place to go when jobs making internal combustion vehicles are phased out.
Electric vehicles have 30% to 40% fewer moving parts and require about 30% fewer labor hours to build them.
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In final paragraph, corrects sentence to say that electric vehicles have 30% to 40% fewer moving parts than gasoline vehicles. Associated Press writer Kim Tong-hyung in Seoul contributed.
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Stocks making the biggest moves premarket: Novartis, First Republic, 3M and more
Traders wearing masks arrive before the opening bell at the New York Stock Exchange (NYSE) in Wall Street in New York City.
Johannes Eisele | AFP | Getty Images
Check out the companies making headlines before the bell on Tuesday.
First Republic Bank — The San Francisco-based regional bank plunged after it said Monday that deposits fell by 40% to $104.5 billion during the first quarter, which came out worse than Wall Street’s expectations. First Republic said that its deposit flows have since stabilized. The stock was down nearly 22% in early morning trading and has declined by 86.6% so far this year. On Tuesday, Janney downgraded First Republic to sell from neutral and lowered its price target on the stock to $8 from $10, implying a 50% downside from Monday’s closing price.
related investing news
UPS — UPS shares fell 1.6%after the shipping giant reported quarterly results that missed analyst expectations. The company earned an adjusted $2.20 per share on revenue of $22.93 billion. Analysts expected earnings of $2.21 per share on revenue of $23.01 billion, according to Refinitiv.
3M — The industrial stock added 1.3% before the opening bell. 3M reported $1.97 in earnings per share, higher than analysts expectations of $1.58 from FactSet. The Minnesota-based company announced it would cut about 6,000 positions globally in efforts to focus on high-growth markets such as automotive electrification and home improvement, while prioritizing emerging growth areas such as climate technology and semiconductors.
McDonald’s — Shares advanced less than 1% after the company beat Wall Street expectations for the first quarter. The company reported $2.63 in adjusted earnings per share on $5.9 billion in revenue. Analysts polled by Refinitiv expected $2.33 in per-share earnings and $5.59 billion in revenue. The stock was recently up 9.8%.
General Motors — Shares gained 2.1% after General Motors raised its key guidance for 2023 and reported first-quarter earnings that beat Wall Street’s top- and bottom-line forecasts. The company reported $39.99 billion in revenue, higher than $38.96 billion according to Refinitiv data. Adjusted earnings came in at $2.21 per share, above the consensus estimate of $1.73. General Motors and Samsung SDI are also expected to announce as early as Tuesday that they plan to build a joint battery manufacturing plant in the U.S.
JetBlue — The stock popped more than 2.3% in the premarket after the airline forecasted a “solidly profitable” second quarter due to strong travel demand. For the first quarter, JetBlue posted a 34 cents loss, less than the 39 cents expected, per Refinitiv.
Packaging Corp of America — Shares fell 6.8% after the company reported an adjusted profit per share of $2.20, which came in below a StreetAccount forecast of $2.27 per share. The company’s second-quarter guidance also missed expectations.
Novartis — Shares of the pharmaceutical company added more than 3% after it raised its full-year earnings outlook, saying it expects sales to grow by mid-single digits. Novartis reported earnings per share of $1.71 on $12.95 billion in revenue, topping analysts’ expectations of $1.54 per share on $12.52 billion in revenue.
PepsiCo — Shares of the beverage and snacks giant climbed nearly 1.6% in premarket trading after it posted earnings and revenue that topped Wall Street’s expectations. PepsiCo also raised its outlook on the full year. The company said first-quarter revenue totaled $17.85 billion, surpassing the $17.22 billion consensus estimate of analysts polled by Refinitiv. PepsiCo reported earnings per share of $1.50, topping analysts’ expectations of $1.39.
— CNBC’s un Li, YAlex Harring, Michelle Fox Theobald and Tanaya Macheel contributed reporting.
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Ford unveils new Lincoln Nautilus to be imported from China
2024 Lincoln Nautilus
Ford
Ford Motor will import its next-generation Lincoln Nautilus from China to the U.S., the company said Monday night.
The midsize crossover is currently produced for the U.S. at Ford’s Oakville Assembly Plant in Ontario, Canada. The automaker recently announced it would be investing 1.8 billion Canadian dollars (about $1.3 billion) to transition the facility into a new electric vehicle hub.
This marks the first time Lincoln will import a vehicle to the U.S. from China.
Importing a vehicle from China to the U.S. is not unprecedented but can draw public and political criticism or backlash, especially when tensions between the two countries are high.
Most notably, General Motors has been criticized for importing its Buick Envision crossover from China to the U.S. since 2016. The Detroit automaker has sold more than 200,000 of the China-made vehicles, which American union officials have called the “Invasion” and “a slap in the face.”
2024 Lincoln Nautilus
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Importing a vehicle from overseas to the U.S. can make good business sense, however, for a company such as Ford.
“In this case, it’s a good use of resources,” said Stephanie Brinley, associate director of research at S&P Global Mobility. “Without importing, Lincoln does not get the product, and the brand needs products between now and when its EVs arrive.”
Brinley said the decision to import the Nautilus does not suggest a fundamental shift for future Lincolns for the U.S. market, noting the company continues to produce most of its vehicles for the U.S. market in North America.
“Lincoln is a global brand that is growing,” a Lincoln spokeswoman said in an email. “As we execute our U.S. manufacturing growth plans, we think it makes sense to centralize Nautilus production in China for both markets (since we already produce Nautilus in China for the local market) which allows us to gain manufacturing efficiencies and retool our Oakville facility to get ready to build our next generation EVs.”
The news comes a week after Ford released a report that said it was the top automaker in terms of vehicles assembled and hourly autoworkers employed in America as well as vehicles exported from America to other countries.
2024 Lincoln Nautilus
Ford
The new Nautilus will feature a redesigned exterior and new interior that includes nearly door-to-door screens for occupants in the front seats. It also offers a new feature called “Lincoln Rejuvenate.”
Ford describes Lincoln Rejuvenate as a “multisensory, in-cabin experience including lighting and digital scenting.” Lincoln revealed a concept vehicle called the Star last year that included such features, but the Nautilus is the first production car for the U.S. to be built with the unique characteristics. The automaker has offered vehicles with the feature in China.
“Lincoln Rejuvenate, a stationary experience, orchestrates specially curated sensory experiences tied to lighting, screen visuals, personal preferences such as seating position and massage options — allowing clients to recharge,” the company said in a release for the vehicle’s reveal Monday night.
Scent cartridges to fill the vehicle’s cabin are housed in the center armrest. The company said scents that come with the package include:
- “Mystic Forest, an earthy blend with woody, rich notes of patchouli.”
- “Ozonic Azure, a crisp blend of aromatic patchouli and traces of bright violet.”
- “Violet Cashmere, exotic white florals and trusted violet that are crisp and refined as fresh linen.”
Lincoln Star concept electric vehicle
Lincoln
The vehicle will be powered by a 2.0-liter turbocharged engine as well as a hybrid powertrain. The car is expected to go on sale in early 2024, with starting prices between $51,810 and $75,860.
The redesigned Nautilus and “Lincoln Rejuvenate” come as the once-prominent American luxury brand attempts to rejuvenate itself.
Sales of Lincoln vehicles were down by 4% last year in the U.S. to fewer than 83,500 vehicles. That’s down from a recent peak of more than 112,200 in 2019.
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Dow tumbles over 400 points in final hour of trade as investors await monthly employment report
U.S. stocks extended losses in the final hour of trade on Thursday, while awaiting Friday’s February employment data that could help decide how large an interest rate hike the Federal Reserve will impose at its next meeting in two weeks.
Financial sector stocks were particularly hard hit along with cryptocurrencies after Silvergate Capital Corp., collapsed overnight amid growing scrutiny in Washington. Other financial stocks fell, dragged down by SVB Financial Group, which fell by a record amount.
How are stocks trading
-
The S&P 500
SPX,
-1.85%
dropped 56 points, or 1.4%, to 3,936 -
Dow Jones Industrial Average
DJIA,
-1.66%
was off 412 points, or 1.3%, to 32,387 -
Nasdaq Composite
COMP,
-2.05%
declined by 174 points, or 1.5%, to 11,399
Both the S&P 500 and Nasdaq finished higher on Wednesday, with only the Dow finishing in the red, while all three indexes remained on track for weekly losses. A weekly drop for the S&P 500 would mark its fourth such pullback in five weeks.
What’s driving markets
U.S. stocks trimmed earlier gains and extended losses on Thursday afternoon after trading modestly higher after the open when the latest weekly jobless claims data showed an unexpectedly large uptick in the number of Americans filing for unemployment benefits.
The number of Americans who applied for unemployment benefits in early March jumped to a 10-week high of 211,000, the highest level since Christmas. That’s higher than the 195,000 new applicants that economists polled by the Wall Street Journal had anticipated.
Economists said the data suggest that the labor market might be starting to slow, which is seen as a necessary prerequisite for driving inflation back to the Fed’s 2% target.
“The labor market might just be on the cusp of an inflection point,” said Peter Boockvar, chief investment officer of Bleakley Financial Group, in emailed commentary.
Investors are now looking ahead to Friday’s closely watched February jobs report from the Department of Labor. Economists polled by the Wall Street Journal expect 225,000 jobs were created last month after 517,000 new jobs were created in January, a number that was much higher than economists had anticipated.
“If we do get the expected 200,000, or really anything between say 180,000 and 240,000, this would be a return to the prior trend and would signal that last month was indeed a one-off,” said Brad McMillan, chief investment officer of Commonwealth Financial Network, in emailed comments.
“That would be perceived as a positive by the Fed and markets, suggesting that inflation may start moderating again but is still high enough to allow for continued economic growth.”
The Russell 2000
RUT,
-2.75% ,
the small-cap index, is on pace to close below its 50-day moving average for the first time since January 9, 2023, according to Dow Jones Market Data.Regional bank stocks underperformed on Thursday. Shares of Silicon Valley Bank parent company SVB Financial Group
SIVB,
-60.41%
plummeted more than 61% after the company disclosed large losses from securities sales and a stock offering meant to provide a boost to its balance sheet. SVB is on pace to book the biggest one-day selloff since the dotcom boom, while its trading was halted for volatility multiple times, according to Dow Jones Market Data.Signature Bank
SBNY,
-12.18%
shares dropped 11.2%undefinedThe KBW Bank Index
BKX,
-7.70%
of 24 leading banks slumped 7.1%, on pace for its worst day since June 26, 2020, according to Dow Jones Market Data. SPDR S&P Bank ETF
KBE,
-7.30%
was down 6.5%.Treasury yields fell with the yield on the 2-year note BX:TMUBMUSD02Yslipped to 4.885% from 5.064% on Wednesday.
Stocks suffered earlier in the week after Powell said during testimony on Capitol Hill that rates would likely need to rise even further than market participants had expected. However, the main indexes saw some relief after the Fed chief clarified that policymakers hadn’t yet decided on the size of the next rate hike.
Investors have already digested several reports on the labor market this week, including a report on the number of job openings, which showed that the number of Americans quitting their jobs had fallen below 4 million in January for the first time in 19 months.
“The big picture is that the labor market is easing, but it’s still tighter than it was before the pandemic,” said Sonu Varghese, a global macro strategist at Carson Group.
Companies in focus
-
Uber Technologies Inc.
UBER,
-4.94%
shares dropped 4.4% on Thursday after Bloomberg reported on Wednesday that the ride-hailing food and package delivery company was considering a spinoff of its struggling Uber Freight business. -
Silvergate Capital Corp.
SI,
-41.96%
shares slumped 32.2% after the La Jolla. Calif-based lender said it would wind down operations and liquidate its crypto-friendly lender Silvergate Bank. Silvergate shares could hit a record low on Thursday if those losses hold through the regular trading session, according to Dow Jones Market Data. -
Credit Suisse Group AG’s U.S-listed shares
CS,
-4.66%
fell 4% after the Swiss bank said publication of its annual report for 2022 would be delayed due to a late call from the Securities and Exchange Commission, which questioned its 2019 and 2020 cash-flow statements. -
General Motors Co.
GM,
-4.88%
slipped 4.1% after the automaker announced a voluntary buyout program that’s expected to lead to an employee separation charge of $1.5 billion.
— Jamie Chisholm contributed to this article
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The S&P 500
-
GM’s stock slips 2% as auto maker announces buyouts
General Motors Co. on Thursday announced employee buyouts that are expected to lead to charges of $1.5 billion as the auto maker seeks to be “nimble in an increasingly competitive market.”
GM’s
GM,
-3.16%
stock slipped 2% after the news. The announcement comes a little over a week after the Detroit News reported that GM was cutting about 500 jobs, which came roughly a month after the company said it wasn’t planning layoffs.“By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market,” a GM spokesperson said.
The buyouts, which the company is calling a voluntary separation program, are being offered to U.S. salaried employees with at least five years of service and to global executives with at least two years of service, GM said.
The program offers employees “an opportunity to make a career change or retire earlier,” the company said. “Employees are strongly encouraged to consider the program.”
GM said in late January that it planned to implement a program aimed at cutting costs by $2 billion per year by 2024.
The buyouts are part of that effort, which also includes reducing vehicle complexity and cutting discretionary spending, GM said.
U.S. employees taking the buyout would receive 1 month of pay for every year of service, up to 12 months, as well as COBRA benefits, a prorated performance bonus and help finding a new job.
GM said it expects to record the bulk of the separation charges in the first half of 2023.
The Wall Street Journal reported Wednesday that GM’s crucial pivot to electric vehicles had “stalled.”
GM has not followed competitors Ford Motor Co.
F,
-2.20%
and Tesla Inc.
TSLA,
-2.02%
in announcing price cuts, with Chief Executive Mary Barra saying in January she believed “we’re priced where we need to be.”GM in January reported fourth-quarter earnings that beat Wall Street expectations and issued guidance that was also well above forecast.
The company said it had led the U.S. auto industry in sales and had the largest year-over-year increase in market share among auto makers, thanks to “strong demand for our products and improved supply chain conditions.”
GM’s stock has run up 18.2% year to date through Wednesday, while the S&P 500
SPX,
-0.22%
has gained 4%. -
Covid’s ‘legacy of weirdness’: Layoffs spread, but some employers can’t hire fast enough
A sign for hire is posted on the window of a Chipotle restaurant in New York, April 29, 2022.
Shannon Stapleton | Reuters
Job cuts are rising at some of the biggest U.S. companies, but others are still scrambling to hire workers, the result of wild swings in consumer priorities since the Covid pandemic began three years ago.
Tech giants Meta, Amazon and Microsoft, along with companies ranging from Disney to Zoom, have announced job cuts over the past few weeks. In total, U.S.-based employers cut nearly 103,000 jobs in January, the most since September 2020, according to a report released earlier this month from outplacement firm Challenger, Gray & Christmas.
Meanwhile, employers added 517,000 jobs last month, nearly three times the number analysts expected. This points to a labor market that’s still tight, particularly in service sectors that were hit hard earlier in the pandemic, such as restaurants and hotels.
The dynamic is making it even harder to predict the path of the U.S. economy. Consumer spending has remained robust and surprised some economists, despite headwinds such as higher interest rates and persistent inflation.
All of it is part of the Covid pandemic’s “legacy of weirdness,” said David Kelly, global chief strategist at J.P. Morgan Asset Management.
The Bureau of Labor Statistics is scheduled to release its next nonfarm payroll on March 3.
Some analysts and economists warn that weakness in some sectors, strains on household budgets, a drawdown on savings and high interest rates could further fan out job weakness in other sectors, especially if wages don’t keep pace with inflation.
Wages for workers in the leisure and hospitality industry rose to $20.78 per hour in January from $19.42 a year earlier, according to the most recent data from the Bureau of Labor Statistics.
“There’s a difference between saying the labor market is tight and the labor market is strong,” Kelly said.
Many employers have faced challenges in attracting and retaining staff over the past few years, with challenges including workers’ child care needs and competing workplaces that might have better schedules and pay.
With interest rates rising and inflation staying elevated, consumers could pull back spending and spark job losses or reduce hiring needs in otherwise thriving sectors.
“When you lose a job you don’t just lose a job — there’s a multiplier effect,” said Aneta Markowska, chief economist at Jefferies.
That means while there might be trouble in some tech companies, that could translate to lower spending on business travel, or if job loss rises significantly, it could prompt households to pull back sharply on spending on services and other goods.
The big reset
Some of the recent layoffs have come from companies that beefed up staffing over the course of the pandemic, when remote work and e-commerce were more central to consumer and company spending.
Amazon last month announced 18,000 job cuts across the company. The Seattle-based company employed 1.54 million people at the end of last year, nearly double the number at the end of 2019, just before the pandemic, according to company filings.
Microsoft said it’s cutting 10,000 jobs, about 5% of its workforce. The software giant had 221,000 employees as of the end of June last year, up from 144,000 before the pandemic.
Tech “used to be a grow-at-all-costs sector, and it’s maturing a little bit,” said Michael Gapen, head of U.S. economic research at Bank of America Global Research.
Other companies are still adding employees. Boeing, for example, is planning to hire 10,000 people this year, many of them in manufacturing and engineering. It will also cut around 2,000 corporate jobs, mostly in human resources and finance departments, through layoffs and attrition. The growth aims to help the aerospace giant ramp up output of new aircraft for a rebound in orders with large sales to airlines like United and Air India.
Airlines and aerospace companies were devastated early in the pandemic when travel dried up and are now playing catch-up. Airlines are still scrambling for pilots, a shortage that has limited capacity, while demand for experiences such as travel and dining has surged.
Chipotle is planning to hire 15,000 workers as it gears up for a busier spring season and to support its expansion.
Holding on
Businesses large and small are also finding they have to raise wages to attract and retain workers. Industries that fell out of favor with consumers and other businesses, such as restaurants and aerospace, are rebuilding workforces after shedding workers. Walmart said it would raise minimum pay for store employees to $14 an hour to attract and retain workers.
The Miner’s Hotel in Butte, Montana, raised hourly pay for housekeepers by $1.50 to $12.50 for that position in the last six weeks because of a high turnover rate, Cassidy Smith, its general manager.
Airports and concessionaires have also been racing to hire workers in the travel rebound. Phoenix Sky Harbor International Airport has been holding monthly job fairs and offers some staff child-care scholarships to help hiring.
Austin-Bergstrom International Airport, where schedules by seats this quarter has grown 48% from the same period of 2019, has launched a number of initiatives, such as $1,000 referral bonuses, and signing and retention incentives for referred staff.
The airport also raised hourly wages for airport facilities representatives from $16.47 in 2022 to $20.68 in 2023.
“Austin has a high cost of living,” said Kevin Russell, the airport’s deputy chief of talent.
He said employee retention has improved.
Electricians, plumbers and heating-and-air conditioning technicians in particular, however, have been difficult to retain because they can work at other places that aren’t 24/7 and at at higher pay, he said.
Many companies’ new workers need to be trained, a time-consuming element for some industries to ramp back up, even if it’s gotten easier to attract new employees.
“Hiring is not a constraint anymore,” Boeing CEO Dave Calhoun said on an earnings call in January. “People are able to hire the people they need. It’s all about the training and ultimately getting them ready to do the sophisticated work that we demand.”
— CNBC’s Amelia Lucas contributed to this article.
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Ford halts production and shipments of its electric F-150 Lightning due to potential battery issue
Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC
DETROIT – Ford Motor has paused production and shipments of its electric F-150 Lightning pickup due to a potential battery issue, the company said Tuesday.
Ford spokeswoman Emma Bergg declined to disclose details of the possible battery issue, which is being investigated after a vehicle displayed a potential problem as part of the automaker’s pre-delivery quality inspections.
The stop-shipment order and halt in production was issued at the beginning of last week, according to Bergg. It adds to ongoing “execution issues” detailed to investors earlier this month by Ford CEO Jim Farley.
Ford has not established a timeline for when production and the shipments will resume, Bergg said.
“The team is diligently working on the root cause analysis,” Bergg said, adding the company is “doing the right thing by our customers” to resolve any potential issues before resuming production and shipments.
Bergg said the company is unaware of any incidents or issues associated with the potential battery issue. There is no stop-sale for vehicles already on dealer lots, meaning dealers can continue to sell vehicles they already have on hand.
The halt in production and shipments was first reported Tuesday by Motor Authority.
The F-150 Lightning is being closely watched by investors, as it’s the first mainstream electric pickup truck on the market and a major launch for Ford.
Automakers routinely have issues and recalls associated with vehicles but problems with batteries are of particular concern and interest, as the automakers invest billions of dollars in the vehicles.
One of the most notable issues has been with General Motors’ Chevrolet Bolt EVs. The Detroit automaker had to recall all of the vehicles built starting two years ago to address fire issues caused by “rare manufacturing defects” at facilities of its battery supplier LG Battery Solution.
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Biden administration expands EV tax credits in boost for Tesla, Cadillac, others
A Tesla Model Y on display inside a Tesla store at the Westfield Culver City shopping mall in Culver City, California, U.S., on Thursday, April 14, 2022.
Bing Guan | Bloomberg | Getty Images
DETROIT – The U.S. Treasury said Friday it is changing its definition of an “SUV” to make more electric vehicles from Tesla, General Motors and other automakers eligible for up to $7,500 federal tax credits at higher prices.
The decision follows Tesla CEO Elon Musk publicly criticizing the former standards as well as automakers such as GM and Ford Motor lobbying to change the guidelines ahead of final rules being announced next month.
The change raises the retail price cap to $80,000 from $55,000 for vehicles such as the Tesla Model Y, Cadillac Lyriq, Ford Mustang Mach-E and Volkswagen’s ID.4. Previously some or all models of these vehicles did not qualify because they didn’t weigh enough to be considered an SUV by the Treasury’s standards.
The credits are part of the Biden administration’s $437 billion Inflation Reduction Act, which was approved in August. Under the bill, SUVs can be priced at up to $80,000 to qualify for EV tax credits, while cars, sedans and wagons have to be priced at or under $55,000.
It’s unclear how the decision will impact up to 20% pricing cuts announced by Tesla last month that made the Model Y eligible for the credits. Tesla did not immediately respond for comment.
GM, in an emailed statement, thanked the Treasury and hailed the changes: “The alignment on classification will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers.”
The Alliance for Automotive Innovation, a lobbying group for most automakers operating in the U.S., also commended the decision.
–CNBC’s Chelsey Cox contributed to this article.
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GM conditionally OKs $650M Nevada lithium mine investment
RENO, Nev. (AP) — General Motors Co. has conditionally agreed to invest $650 million in Lithium Americas Corp. in a deal that will give GM exclusive access to the first phase of a mine planned near the Nevada-Oregon line with the largest known source of lithium in the U.S.
The equity investment the companies announced jointly on Tuesday is contingent on the Thacker Pass project clearing the final environmental and legal challenges it faces in federal court in Reno, where conservationists and tribal leaders are suing to block it.
Lawyers for the mining company and the U.S. government told a judge during a Jan. 5 hearing the project is critical to meeting the growing demand for lithium to make electric vehicle batteries — a key part of President Joe Biden’s push to expedite a transition from fossil fuels to renewable energy and help reduce greenhouse gas emissions.
GM said Tuesday’s announcement marks the largest-ever investment by an automaker to produce battery raw materials.
Lithium Americas estimates the lithium extracted and processed from the project atop an ancient volcano about 200 miles (321 kilometers) northeast of Reno can support production of up to 1 million electric vehicles annually. It’s the third largest known lithium deposit in the world, the company said.
“The agreement with GM is a major milestone in moving Thacker Pass toward production,” Lithium Americas President and CEO Jonathan Evans said in the joint statement Tuesday.
“We are pleased to have GM as our largest investor and we look forward to working together to accelerate the energy transition while spurring job creation and economic growth in America,” he said.
GM also reported Tuesday that rising factory output led to strong U.S. sales at the end of last year, pushing its fourth-quarter net income up 16% over the same period a year ago.
“GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we’re developing with Lithium Americas,” said GM Chair and CEO Mary Barra.
The joint announcement said GM’s investment will be split into two portions. The first will be held in escrow “until certain conditions are met, including the outcome of the Record of Decision ruling currently pending in U.S. District Court.”
“If those conditions are met, the funds will be released and GM will become a shareholder in Lithium Americas,” the joint statement said.
The escrow release is expected to occur no later than the end of 2023 and lithium production is projected to begin in the second half of 2026, it said.
The second portion of the investment is contingent on, among other things, Lithium Americas “securing capital to fund the development expenditures to support Thacker Pass,” the statement said.
Conservationists say the mine will destroy dwindling habitat for sage grouse, Lahontan cutthroat trout, pronghorn antelope and golden eagles, pollute the air and create a plume of toxic water beneath the open-pit mine deeper than the length of a football field.
Tribal leaders say it will destroy nearby sacred lands where dozens of their ancestors were massacred by the U.S. Cavalry in 1865.
U.S. District Judge Miranda Du said after a three-hour hearing in Reno on Jan. 5 that she hoped to make a decision “in the next couple months” on how to proceed in the nearly two-year-old legal battle over the Bureau of Land Management’s approval of the mine.
Lawyers for the company and the bureau insisted the project complies with U.S. laws and regulations. But they said that if Du determines it does not, she should stop short of vacating the agency’s approval and allow initial work at the site to begin as further reviews are initiated.
Opponents said that should not occur because any environmental damage would be irreversible.
U.S. Sen. Joe Manchin, D-W.Va., hailed GM’s announcement, which he said would boost his efforts to develop U.S.-made batteries for EVs and other uses. China currently controls about 80% of the world’s anode production and 75% of the world’s lithium-ion battery cells, Manchin said.
“I’m old enough to remember … 1974 when I was standing in line waiting to buy gas if it was my turn to buy gas to go to work,″ Manchin said Tuesday in a speech on the U.S. Senate floor. “I don’t intend to stand in line to wait for China to send a battery to make my car work. I just won’t do it. So this is why we are moving in the direction we are.″
“The United States is the superpower of the world and to remain that status, you have to have energy independence and be secured of your own energy sources,″ Manchin said.
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GM smashes expectations and guides toward a strong 2023, despite margin squeeze
Mary Barra, CEO, GM at the NYSE, November 17, 2022.
Source: NYSE
DETROIT — General Motors handily beat Wall Street’s top- and bottom-line expectations for the fourth quarter, while forecasting another solid year of results in 2023.
The strong report suggests GM is hanging onto record, or near-record, results even as the U.S. automotive industry begins to normalize after several years of record-low inventories and resilient consumer demand.
Shares of GM were up roughly 5% in premarket trading Tuesday.
Here’s how GM performed to close out last year, compared with analysts’ estimates as compiled by Refinitiv:
- Adjusted earnings per share: $2.12 vs. $1.69 expected
- Revenue: $43.11 billion vs. $40.65 billion expected
The fourth-quarter results easily topped a year earlier, when the automaker reported an adjusted EPS of $1.35 and revenue of $33.58 billion for the final three months of 2021.
GM’s full-year 2022 revenue came in at $156.7 billion, with net income attributable to stockholders of $9.9 billion and adjusted earnings before interest and tax at a record $14.5 billion. Those results marked the high-end of the company’s previously revised guidance.
Still, the automaker is showing signs of a margin squeeze. GM’s net income slipped last year, down by less than 1% from full-year 2021 to $9.9 billion, with a profit margin that was off 1.6 percentage points to 6.3%. Its adjusted profit margin was 9.2%, down 2.1 percentage points compared with the previous year.
GM said it incurred special charges in the fourth quarter of $511 million related to a buyout program for its Buick dealers and $657 million related to shuttering its limited operation in Russia.
2023 guidance
For 2023, GM expects net income attributable to stockholders of between $8.7 billion and $10.1 billion. It expects adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.
Those results would be below 2022 earnings, but above average analyst forecasts compiled by Refinitv that called for EPS of $5.73 this year.
A five-day performance of GM’s stock.
GM forecast 2023 net automotive cash from operating activities to come in between $16 billion and $20 billion and sees automotive free cash flow of $5 billion to $7 billion.
Wall Street has been bracing for a “demand destruction” scenario for the last several quarters, with some analysts suggesting automakers may need to execute cost-cutting measures to offset recessionary spending shifts.
Demand and pricing for GM’s vehicles “remain strong,” CFO Paul Jacobson told reporters Tuesday morning. He said GM is being “appropriately cautious” but vehicle inventories remain constrained amid strong demand.
“We think the underlying business is going to be pretty consistent with what we saw last year, and I think that’s a slightly more bullish statement than where most of the market is,” he said.
GM will execute a $2 billion cost-cutting plan through the next two years, according to Jacobson. Up to half of those savings are expected this year, he said. GM expects some head count reduction due to attrition but the company is “not planning layoffs,” Jacobson said.
EVs
GM CEO Mary Barra, in a letter to shareholders, described 2023 as a “breakout year” for the company’s electric vehicle business, highlighting the introduction of more mainstream products like the Chevrolet Equinox EV as well as increases in production of its current models.
Barra confirmed GM’s revised plans to produce 400,000 EVs in North America between 2022 and the first half of next year.
GM also announced Tuesday an equity investment of $650 million in Lithium Americas Corp. to develop a lithium mine in Nevada known as Thacker Pass. GM is to receive exclusive access to phase one of production, the automaker announced.
Shares of Lithium Americas were up roughly 8% in premarket trading Tuesday.
GM said Monday it launched production of the GMC Hummer SUV EV at a plant in Detroit. That vehicle is expected to be followed by an electric Chevrolet Silverado work truck by midyear and electric versions of the Chevrolet Blazer and Equinox during the second half of 2023.
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Tesla just had its best week since May 2013
Tesla CEO Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 (ONS) meeting in Stavanger, Norway on August 29, 2022.
Carina Johansen | AFP | Getty Images
Tesla shares surged 33% this week, marking their best weekly performance since May 2013 and second best on record.
The stock rose 11% on Friday to close at $177.88. The rebound followed a six-month period in which Tesla shares had declined more than 40%. The stock’s 65% plunge in 2022 was its worst in Tesla’s 12-plus years as a public company.
Tesla’s rally this week was aided by an upbeat fourth-quarter earnings report. During the call with shareholders and analysts, CEO Elon Musk said the company was on target to potentially produce 2 million vehicles in 2023, and he suggested demand would support sales of those cars as well.
Official guidance called for production of 1.8 million vehicles this year. The company has not revised its longstanding target for 50% compound annual growth rate over a multi-year horizon.
Tesla’s five day performance charted against Rivian and Ford Motor Company.
Tesla beat on both the top and the bottom lines, recording total revenue of $24.32 billion, including $324 million of deferred revenue related to Tesla’s driver assistance systems. The company cut prices for its cars dramatically in December and January, leading to concern about demand and a buildup of inventory.
Analyst reaction to Tesla’s numbers was mixed.
“For bulls, the growth story is alive and well,” Bernstein’s Toni Sacconaghi, who has an underperform rating on the stock, wrote in a note on Thursday. “For bears, the numbers don’t lie.”
In early January, Tesla reported fourth-quarter vehicle deliveries and production that fell shy of expectations.
Tesla’s stock jump came amid a broader market rally. The S&P 500 was up 2.2% for the week and the Nasdaq gained 4.3%.
Other U.S.-based electric vehicle makers saw their shares climb higher. Rivian rose 22% during the week, while shares in legacy automakers Ford and General Motors each gained more than 7%.
Rival electric car manufacturer Lucid spiked on Friday as well, rising 43% on reports of rumors that Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, intended to take the company private.
Some of Tesla’s underperformance last year was attributed to Musk’s shift of focus to Twitter, which he acquired for $44 billion in October. Under Musk’s leadership, Twitter has experienced mass layoffs and fleeing advertisers, gutting morale.
Tesla remains the second most-shorted stock in U.S. markets, behind only Apple, meaning that a large numbers of investors are betting on a decline. Over 94 million of the automaker’s shares are shorted, according to data from S3 Partners.
Despite the rally, active short selling continues, S3 managing director Ihor Dusaniwsky told CNBC. Short sellers view Tesla’s appreciation as having created “an overheated and overbought stock that is due for at least a short-term reversal,” he said. In the last week, S3 Partners said it’s seen a 3.9% increase in total shares shorted, while investors shorting the stock lost $4.3 billion over that stretch.
