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Tag: General Motors Co.

  • GM, LG end plans for fourth U.S. battery cell plant as automaker seeks new partner

    GM, LG end plans for fourth U.S. battery cell plant as automaker seeks new partner

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    GM CEO and Chairman Mary Barra and LG Chem Vice Chairman and CEO Hak-Cheol Shin at the automaker’s battery lab in Warren, Mich., where the companies announced a new $2.6-billion joint venture on Dec. 5, 2019.

    GM

    DETROIT – General Motors and LG Energy Solution have indefinitely shelved plans to build a fourth battery cell plant in the U.S., as talks between the two sides recently ended without an agreement, a person familiar with the plans confirmed to CNBC.

    The Detroit automaker is expected to continue with its plans to build the plant but is searching for another partner, according to the person who asked not to be named because the talks are private.

    “We’ve been very clear that our plan includes investing in a fourth U.S. cell plant, but we’re not going to comment on speculation,” GM said Friday in an emailed statement.

    The Wall Street Journal first reported Friday afternoon that talks had stalled between GM and LG in part because LG Energy executives in Korea were hesitant to commit to the project given the rapid pace of its recent investments with other automakers as well as the uncertain macroeconomic outlook. 

    The paper, citing unnamed sources familiar with the plans, said GM is in discussions with at least one other battery supplier to proceed with the fourth U.S. battery-cell factory.

    The breakdown in talks comes after GM CEO Mary Barra and other executives have said they’ve been close to announcing details of the fourth plant, which was expected to be built in Indiana, for some time.

    GM and LG initially announced the joint-venture for a $2.3 billion plant in Ohio in December 2019, followed by other plants near GM operations in Michigan and Tennessee. Only the Ohio plant is currently operating, while the others are under construction. The joint venture is called Ultium Cells LLC.

    A spokeswoman for Ultium referred questions to GM and LG Energy. In an emailed statement, LG Energy said discussions on a fourth Ultium Cells plant “remain ongoing between LG Energy Solution and GM, but no decision has been made.”

    The relationship between GM and LG Energy is crucial to the automaker’s future plans for EVs, including topping Tesla and others to become the U.S. leader in all-electric vehicle sales. The Detroit automaker is expected to release a handful of new EVs this year, including mass-market vehicles such as the Equinox, Blazer and Silverado.

    GM, in its Friday statement, said its second and third plants with LG are on track to open as scheduled in 2023 and 2024, respectively. The company also confirmed it is on track to hit 1 million EV production capacity annually in North America in 2025.

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  • Tesla reports 1.31 million deliveries in 2022, growth of 40% over last year

    Tesla reports 1.31 million deliveries in 2022, growth of 40% over last year

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    Tesla just published its fourth-quarter vehicle production and delivery report for 2022.

    Here are the key numbers.

    Total deliveries Q4 2022: 405,278
    Total production Q4 2022: 439,701
    Total annual deliveries 2022: 1.31 million
    Total annual production 2022: 1.37 million

    Deliveries are the closest approximation of sales disclosed by Tesla. These numbers represented a new record for the Elon Musk-led automaker and growth of 40% in deliveries year-over-year.

    However, the fourth quarter numbers fell shy of analysts’ expectations.

    According to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022 Wall Street was expecting Tesla to report deliveries around 427,000 for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.

    Those more recent estimates were in line with a company-compiled consensus distributed by Tesla investor relations Vice President Martin Viecha. That consensus, published by electric vehicle industry researcher @TroyTeslike, said that 24 sell-side analysts expected Tesla deliveries of about 417,957 on average for the quarter (and about 1.33 million deliveries for the full year).

    Tesla started production at two new factories this year — in Austin, Texas and Brandenburg, Germany — and ramped up production in Fremont, California and in Shanghai, but it does not disclose production and delivery numbers by region.

    In the fourth quarter of 2022, Tesla said deliveries of its entry level Model 3 sedan and Model Y crossover amounted to 325,158, while deliveries of its higher end Model S sedan and Model X SUV amounted to 18,672.

    In its third-quarter shareholder presentation, Tesla wrote: “Over a multi-year horizon we expect to achieve 50% average annual growth in vehicle deliveries. The rate of growth will depend on our equipment capacity, factory uptime, operational efficiency and the capacity and stability of the supply chain.”

    The period ending Dec. 31, 2022 was marked by challenges for Tesla, including Covid outbreaks in China, which caused the company to temporarily suspend and reduce production at its Shanghai factory.

    During the fourth quarter, Tesla also offered steep price cuts and other promotions in the U.S., China and elsewhere in order to spur demand, even though doing so could put pressure on its margins.

    In a recent e-mail to Tesla staff, Elon Musk asked employees to “volunteer” to deliver as many cars to customers as possible before the end of 2022. In his e-mail, Musk also encouraged employees not to be “bothered” by what he characterized as “stock market craziness.”

    Shares of Tesla plunged by more than 45% over the last six months.

    In December, several analysts expressed concern about weakening demand for Tesla electric vehicles, which are relatively expensive compared with an increasing number of hybrid and fully electric products from competitors.

    Along with competitors ranging from industry veterans Ford and GM to upstart Rivian, Tesla is poised to reap the benefits of Biden’s Inflation Reduction Act this year, which includes incentives for domestic production and purchases of fully electric cars.

    Retail shareholders and analysts alike attributed some of Tesla’s falling share price in 2022 to a so-called “Twitter overhang.”

    Musk sold billions of dollars worth of his Tesla holdings last year to finance a leveraged buyout of the social media business Twitter. That deal closed in late October. Musk appointed himself CEO of Twitter and has stirred controversy by making sweeping changes to the company and its social media platform.

    Shares of Tesla started to rise again in the final days of December 2022, in anticipation of record fourth-quarter and full-year deliveries.

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  • EXPLAINER: 2023 tax credits for EVs will boost their appeal

    EXPLAINER: 2023 tax credits for EVs will boost their appeal

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    WASHINGTON — Starting Jan. 1, many Americans will qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit, part of changes enacted in the Inflation Reduction Act, is designed to spur EV sales and reduce greenhouse emissions.

    But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, is casting some doubt on whether anyone can receive the full $7,500 credit next year.

    The Treasury Department is rolling out more information on which vehicles qualify and how individuals and businesses can access credit beginning in 2023. One big loophole that allows tax credits for EVs purchased for “commercial” use, such as leasing or ride-share, even if they are foreign-made is drawing the ire of Sen. Joe Manchin, D-W.Va., who says it could circumvent the intent of the law to favor American manufacturing.

    For at least the first two months of 2023, though, a delay in some of Treasury’s rules will likely make the full credit temporarily available to consumers who meet certain income and price limits.

    The new law also provides a smaller credit for people who buy a used EV.

    Certain EV brands that were eligible for a separate tax credit that began in 2010 and that will end this year may not be eligible for the new credit. Several EV models made by Kia, Hyundai and Audi, for example, won’t qualify because they are manufactured outside North America.

    The new tax credit, which lasts until 2032, is intended to make zero-emission vehicles affordable to more people. Here is a closer look at it.

    ———

    WHAT’S NEW FOR 2023?

    The credit of up to $7,500 will be offered to people who buy certain new electric vehicles as well as some plug-in gas-electric hybrids and hydrogen fuel cell vehicles. For people who buy a used vehicle that runs on battery power, a $4,000 credit will be available.

    But the question of which vehicles and buyers will qualify for the credits is complicated and will remain uncertain until Treasury issues the proposed rules in March.

    What’s known so far is that to qualify for the credit, new EVs must be made in North America. In addition, caps on vehicle prices and buyer incomes are intended to disqualify wealthier buyers.

    Starting in March, complex provisions will also govern battery components. Forty percent of battery minerals will have to come from North America or a country with a U.S. free trade agreement or be recycled in North America. (That threshold will eventually go to 80%.)

    And 50% of the battery parts will have to be made or assembled in North America, eventually rising to 100%.

    Starting in 2025, battery minerals cannot come from a “foreign entity of concern,” mainly China and Russia. Battery parts cannot be sourced in those countries starting in 2024 — a troublesome obstacle for the auto industry because numerous EV metals and parts now come from China.

    There also are battery-size requirements.

    ———

    WHICH VEHICLES ARE ELIGIBLE?

    Because of the many remaining uncertainties, that’s not entirely clear. However, the Treasury Department released an initial list of vehicles that meet the requirements to claim the new clean vehicle tax credit beginning Jan. 1, including models from Chrysler, Ford, Jeep, Lincoln, Nissan and Rivian. More vehicles will be added to the list in the weeks and months to come.

    The Energy Department also maintains a list of qualifying EVs.

    General Motors and Tesla have the most EVs assembled in North America. Each also makes batteries in the U.S. But because of the requirements for where batteries, minerals and parts must be manufactured, it’s likely that buyers of those vehicles would initially receive only half the tax credit, $3,750. GM says its eligible EVs should qualify for the $3,750 credit by March, with the full credit available in 2025.

    Until Treasury issues its rules, though, the requirements governing where minerals and parts must be sourced will be waived. This will allow eligible buyers to receive the full $7,500 tax incentive for qualifying models early in 2023.

    ———

    WHAT ABOUT PRICE?

    To qualify, new electric sedans cannot have a sticker price above $55,000. Pickup trucks, SUVs and vans can’t be over $80,000. This will disqualify two higher-priced Tesla models. Though Tesla’s top sellers, the models 3 and Y, will be eligible, with options, those vehicles might exceed the price limits.

    Kelley Blue Book says the average EV now costs over $65,000, though lower-priced models are coming.

    ———

    WILL I QUALIFY FOR THE CREDITS?

    It depends on your income. For new EVs, buyers cannot have an adjusted gross income above $150,000 if single, $300,000 if filing jointly and $225,000 if head of a household.

    For used EVs, buyers cannot earn more than $75,000 if single, $150,000 if filing jointly and $112,500 if head of household.

    ———

    HOW WILL THE CREDIT BE PAID?

    At first, it will be applied to your 2023 tax return, which you file in 2024. Starting in 2024, consumers can transfer the credit to a dealership to lower the vehicle price at purchase.

    ———

    WILL THE CREDITS BOOST EV SALES?

    Yes, but it probably will take a few years, says Mike Fiske, associate director for S&P Global Mobility. The credit may cause a bump in sales early next year because of Treasury’s delay in issuing the stricter requirements. But most automakers are now selling all the EVs they build and cannot make more because of shortages of parts, including computer chips.

    And automakers may have trouble certifying the sources of battery minerals and parts, a requirement for buyers to receive the full credit. Automakers have been scrambling to move more EV supply chains to the U.S.

    ———

    HOW DOES THE USED-EV CREDIT WORK?

    Consumers can receive tax credits of up to $4,000 — or 30% of the vehicle price, whichever is less — for buying EVs that are at least two years old. But the used EV must cost less than $25,000 — a tall order given the starting prices for most EVs on the market. A search on Autotrader.com shows that the Chevy Bolt, the Nissan Leaf and other relatively economical used EVs are listed at $26,000 or more for models dating back to 2019.

    On the other hand, used EVs need not be made in North America or comply with the battery-sourcing requirements. That means that, for instance, a 2022 Kia EV6 that’s ineligible for the new-vehicle credit because it’s made in South Korea can qualify for a used-car credit if its price falls below $25,000.

    “The real effects where these tax credits will have a big impact will be in the 2026-to-2032 period — a few years into the future — as automakers gear up and volumes increase,” said Chris Harto, a senior policy analyst for Consumer Reports magazine.

    ———

    WHY IS THE GOVERNMENT OFFERING THE CREDITS?

    The credits are part of roughly $370 billion in spending on clean energy — America’s largest investment to fight climate change — that was signed into law in August by President Joe Biden. EVs now make up about 5% of U.S. new-vehicle sales; Biden has set a goal of 50% by 2030.

    Sales of EVs have been climbing, particularly as California and other states have moved to phase out gas-powered cars. The rise of lower-cost competitors to Tesla, such as the Chevy Equinox, with an expected base price of around $30,000, are expected to broaden the EVs’ reach to middle-class households. S&P Global Mobility expects EVs’ share of auto sales to reach 8% next year, 15% by 2025 and 37% by 2030.

    ———

    COULD REQUIREMENTS BE EASED TO MAKE MORE EVs ELIGIBLE?

    It appears that may happen. Some U.S. allies are upset over North American manufacturing requirements that disqualify EVs made in Europe or South Korea.

    The requirements knock Hyundai and Kia out of the credits, at least in the short term. They plan to build new EV and battery plants in Georgia, but those won’t open until 2025. European Union countries fear that the tax credits could make their automakers move factories to the U.S.

    There is a loophole, however. The law appears to exempt commercial vehicles from the North America assembly and domestic battery mineral and parts requirements. That means that rental car and leasing companies with huge fleets as well as EVs used fuller-time for ride-share such as Uber and Lyft could be eligible for up to $7,500 in tax credits even for foreign-made EVs. A fact sheet released by Treasury on Thursday affirms it would allow exemptions for commercial vehicles, which the department says it must do based on the wording of the law.

    That move drew the anger of Manchin, a key vote in passing the Inflation Reduction Act, who on Thursday accused the Biden administration of bending to the desires of foreign countries. He said the exemptions undermine the law’s intent to “bring our energy and manufacturing supply chains onshore to protect our national security, reduce our dependence on foreign adversaries and create jobs right here in the United States.”

    Manchin said he would introduce legislation in the coming weeks that “prevents this dangerous interpretation from Treasury from moving forward.”

    ———

    ARE THERE CREDITS FOR CHARGING STATIONS?

    If you install an EV charger at home, credits may be available. The new law revives a federal tax credit that had expired in 2021; it provides 30% of the cost of hardware and installation, up to $1,000. It adds a requirement that the charger must be in a low-income or non-urban area. Businesses that install new EV chargers in those areas can receive tax credits of as much as 30% — up to $100,000 per charger.

    Residential EV chargers can range in cost from $200 to $1,000; installation can add several more hundred dollars.

    ———

    SO SHOULD I BUY NOW OR WAIT?

    That’s entirely a personal decision.

    If you’ve grown tired of volatile gasoline prices and are considering an EV, you might want to go ahead. Buying a qualifying EV in January or February could net you the full $7,500 tax break before more stringent requirements take effect in March. Additional state credits also may be available.

    But if you’re still on the fence, there’s no urgency. Consumers who rush to buy now, when relatively few qualifying EVs are available, may face dealer price markups. Within a few years, technology will improve, and more EVs will qualify for full credits.

    ———

    WHERE CAN I FIND MORE INFORMATION?

    The Treasury Department on Thursday released several frequently asked questions documents for individual and commercial customers on the clean vehicle tax credits meant to help them understand how to access the various tax incentives.

    The department also released a white paper explaining the anticipated direction that it is taking ahead of the proposed rule rollout.

    ————

    Krisher reported from Detroit. Associated Press writer Fatima Hussein contributed to this report.

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  • Rule delay makes big EV tax credit possible early next year

    Rule delay makes big EV tax credit possible early next year

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    WASHINGTON — People who want to buy an electric vehicle could get a bigger-than-expected tax credit come Jan. 1 because of a delay by the Treasury Department in drawing up rules for the tax breaks.

    The department said late Monday it won’t finish the rules that govern where battery minerals and parts have to be sourced until sometime in March.

    As a result, it appears that buyers of EVs assembled in North America with batteries made in the U.S., Canada or Mexico will be eligible for a full $7,500 tax credit under the Inflation Reduction Act. The act calls for the batteries’ minerals and parts to also come from North America or a country with a free-trade agreement with the U.S. in order to get the full tax break, but that provision has been temporarily put on hold.

    The auto industry is watching the situation closely, but it could cause a rush to dealers because most, if not all EVs aren’t expected to qualify for the full credit when the rules are all in place.

    Experts say most automakers won’t be able to comply with requirements that the battery components come from North America or a country with a U.S. free-trade agreement. For instance, General Motors already has said that it expects its EVs to get only half the tax credit, or $3,750, until at least 2025.

    So people who buy early next year before the rules are announced could pocket an extra $3,750.

    “I imagine there will be a rush,” on EV dealers to get the extra savings, said Sam Abuelsamid, principal e-mobility analyst with Guidehouse Research.

    In the meantime, Treasury said it will release information by year’s end on the “anticipated direction” of the rules to help automakers identify eligible EVs, the department said in a statement. But the rules won’t be effective until March.

    Other requirements, like new caps on a buyer’s income and price of the EV, will still take effect Jan. 1.

    “It should allow some consumers to get an EV a little bit cheaper than they might have otherwise,” said Chris Harto, a senior policy analyst on transportation and energy for Consumer Reports magazine.

    With a base price of $26,595 including shipping, General Motors’ Chevrolet Bolt hatchback is among the lowest-cost EVs on sale in the U.S. today. A $7,500 tax credit would knock the price down to just over $19,000 — less than the average price of a used vehicle in the U.S. That could bring buyers off the sidelines.

    GM says it’s watching developments with the tax credit rules. “We feel well-positioned, but we’re still waiting on guidance for vehicle eligibility,” spokeswoman Jeannine Ginivan said Tuesday.

    Automakers have criticized the battery sourcing and assembly requirements as complex, hard to trace and unrealistic in the short term, with no EV model sold in the U.S. likely able to qualify right away for the full $7,500 tax credit.

    The law’s aim was in part to reduce U.S. reliance on batteries now predominantly made in China and move supply chains to the U.S. Fifty percent of the battery parts have to be manufactured or assembled in North America, and 40% of battery minerals must come from North America or a country with a U.S. free trade agreement, or recycled in North America. Those percentages rise annually.

    More broadly, U.S. allies including South Korea, the European Union and other countries are also upset, arguing that the new law will disqualify their foreign-made EVs unless or until they can open new American plants, which could take several years.

    The new law continues to require that EVs be assembled in North America, which took effect when President Joe Biden signed the measure in August. Also taking effect on Jan. 1 are new caps that EV sedans must cost $55,000 or less, or under $80,000 for pickup trucks, SUVs and vans. A car buyer must have income of $150,000 or less if single, or $300,000 if filing jointly.

    Abuelsamid said it’s not clear whether someone could order an EV before the rules take effect and still get the full credit. He suspects that people will have a hard time finding EVs, which like other automobiles, are still scarce because the auto industry is having a hard time getting computer chips and other parts to keep factories running.

    Harto said the temporary delay makes sense for the Treasury Department as it sorts out technical issues of minerals extraction and battery component manufacturing for its rule-making. Consumers in the meanwhile can take advantage if they pay heed as well to potential dealer markups, he said.

    “The market for EVs has been supply limited and I don’t see that changing in the next two weeks, so that’s the real risk — that this additional tax credit gets eaten up by dealer markups,” Harto said.

    ———

    Krisher reported from Detroit. Associated Press writer Fatima Hussein contributed to this report.

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  • US opens probe of Cruise robotaxi braking, clogging traffic

    US opens probe of Cruise robotaxi braking, clogging traffic

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    DETROIT — U.S. safety regulators are investigating reports that autonomous robotaxis run by General Motors‘ Cruise LLC can stop too quickly or unexpectedly quit moving, potentially stranding passengers.

    Three rear-end collisions that reportedly took place after Cruise autonomous vehicles braked hard kicked off the probe, according to the National Highway Traffic Safety Administration. At the time, robotaxis were staffed by human safety drivers.

    The agency also has multiple reports of Cruise robotaxis without human safety drivers becoming immobilized in San Francisco traffic, possibly stranding passengers and blocking lanes.

    The reports of immobilized vehicles came from discussions with Cruise, media reports and local authorities, NHTSA said in an investigation document posted Friday on its website.

    There have been two reports of injuries related to the hard braking, including a bicyclist seriously hurt last March, according to the NHTSA crash database.

    NHTSA says it will determine how often the problems happen and potential safety issues they cause. The probe, which covers an estimated 242 Cruise autonomous vehicles, could bring a recall. “With these data, NHTSA can respond to safety concerns involving these technologies through further investigation and enforcement,” the agency said in a statement.

    Cruise CEO Kyle Vogt told The Associated Press that the company is fully cooperating with the NHTSA. “I am happy to help educate them on the safety of our products,” Vogt said during a Friday interview. “Regulators are doing their job. They are scrutinizing things as they should, asking lots of questions.”

    So far, Cruise vehicles have driven nearly early 700,000 autonomous miles (1.1 million autonomous kilometers) in San Francisco without causing any life-threatening injuries or deaths.

    “This is against the backdrop of over 40,000 deaths each year on American roads,” Cruise spokesman Drew Pusateri wrote in a statement. “There’s always a balance between healthy regulatory scrutiny and the innovation we desperately need to save lives.”

    He said police didn’t issue tickets in any of the crashes, and that in each case, the autonomous vehicle was responding to aggressive or erratic behavior of other road users. “The AV was working to minimize collision severity and risk of harm,” Pusateri wrote.

    In the clogged traffic incidents, Pusateri wrote that whenever Cruise technology isn’t extremely confident in moving, it’s designed to be conservative, turning on hazard lights and coming to a safe stop.

    “If needed, Cruise personnel are physically dispatched to retrieve the vehicle as quickly as possible,” Pusateri wrote. Such stoppages are rare and have not caused any crashes, he wrote.

    NHTSA said Cruise reported the three rear-end accidents under a 2021 order requiring automated vehicle companies to notify the agency of crashes.

    Reports of Cruise robotaxis becoming immobilized in traffic came from the San Francisco Municipal Transportation Agency and the San Francisco County Transportation Authority, the agency said.

    Cruise vehicles may strand passengers in unsafe locations, such as travel lanes or intersections, increasing the risk to exiting passengers. And they can become obstacles to other road users, causing them to make unsafe maneuvers to avoid collisions. “The vehicles may also present a secondary safety risk, by obstructing the paths of emergency response vehicles and thereby delaying their emergency response times,” NHTSA said in the document.

    The municipal transportation agency, in comments to NHTSA, said that starting in May, the city began to notice 911 calls from people who were inconvenienced by Cruise operations. Some city police officers also saw Cruise vehicles disabled in travel lanes. One incident in June involved 13 Cruise vehicles stopped on a major road. Two other large blockages were reported in August, the agency said.

    The probe comes at an important time for Cruise, which in June started charging passengers for autonomous rides without human safety drivers in part of San Francisco at night. On Thursday, the company got approval from a state agency to carry riders citywide, around the clock. One more agency has to sign off.

    It’s also a critical time for the autonomous vehicle industry, with Google spinoff Waymo running a robotaxi service in the Phoenix area with plans to expand to San Francisco. Other companies also are moving toward services without human safety drivers.

    San Francisco-based Cruise plans to expand the service to Phoenix and Austin, Texas. The startup owned by GM has been testing autonomous Chevrolet Bolt electric vehicles for several years.

    In September Cruise revealed that it recalled 80 of its driverless vehicles for a software update after one of the cars was involved in a crash that caused minor injuries.

    Cruise told the National Highway Traffic Safety Administration, that one of its vehicles was making an unprotected left turn at an intersection when it was hit by an oncoming vehicle. The Cruise vehicle had to be towed away from the scene, according to the regulatory filing.

    GM acquired a majority stake in Cruise when it was a startup in 2016. The company invested to take 80% stake in the company last May.

    —————

    AP Technology Writer Michael Liedtke contributed from San Ramon, California.

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  • Mexico to make last-ditch effort to solve US corn dispute

    Mexico to make last-ditch effort to solve US corn dispute

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    MEXICO CITY — Mexico’s foreign secretary has announced he will travel to Washington, D.C., on Friday in a last-ditch effort to resolve a dispute over imports of U.S. corn before a scheduled visit next month by U.S. President Joe Biden.

    Foreign Secretary Marcelo Ebrard said Monday that he will travel to the U.S. capital with other Mexican officials to try to find “points of agreement on genetically modified corn and other issues.”

    The leaders of Canada, Mexico and the United States are scheduled to meet in Mexico City on Jan. 9-10.

    Mexico sparked the dispute when it announced plans to ban imports of GM corn for human consumption and perhaps eventually for animal feed as well.

    Mexico cites health concerns, but such a trade restriction could violate the U.S.-Mexico-Canada free trade agreement. Mexico has been importing U.S. GM feed corn for years, buying about $3 billion worth annually, and is the single biggest export market for U.S. corn.

    Mexico hopes to stave off a full-fledged trade complaint under the agreement on that issue as well as a dispute over Mexico’s energy sector.

    The United States says Mexico is unfairly favoring its state-owned electricity and oil companies over American competitors and clean-energy suppliers. Canada also has joined in that complaint.

    The U.S. initially requested talks in July, but they have so far not yielded any solution. The United States could demand an arbitration panel, and the dispute could end in trade sanctions against Mexico.

    López Obrador exchanged letters with Biden on Monday, to mark the 200th anniversary of the two nations establishing diplomatic relations in 1822, following Mexico’s independence from Spain.

    In his letter, López Obrador proposed that both nations agree on a “plan for import replacements, so that in the whole continent of North America, we produce everything we consume.”

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  • GM joint venture gets $2.5B loan to build battery plants

    GM joint venture gets $2.5B loan to build battery plants

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    A joint venture between General Motors and South Korean battery company LG Energy Solution has closed on a $2.5 billion federal loan to help finance three lithium-ion battery cell plants in Ohio, Tennessee, and Michigan

    NEW YORK — A joint venture between General Motors and South Korean battery company LG Energy Solution has closed on a $2.5 billion federal loan to help finance three lithium-ion battery cell plants in Ohio, Tennessee, and Michigan.

    The Department of Energy awarded the loan to the venture, called Ultium Cells, for the plants, which are expected to create about 11,000 jobs. The loan is part of a government program designed to address the growing need for batteries for electric vehicles.

    The loan was first announced in July.

    The Biden administration has been working to strengthen U.S. energy independence and reduce dependence on China for critical components. Ultium Cells will supply GM as it works to convert its light-duty fleet to all-electric by 2035.

    The plants are planned for Lansing, Michigan and Spring Hill, Tennessee. A plant near Warren, Ohio, began battery cell production in August.

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  • Reform candidates lead in UAW races with 68% of vote counted

    Reform candidates lead in UAW races with 68% of vote counted

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    DETROIT — Members of the United Auto Workers union appeared on Thursday to favor replacing many of their current leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials.

    Reform-minded candidates, many part of the UAW Members United slate, are leading or close in multiple key races with about 68% of the vote counted. Many challengers campaigned on rescinding concessions made to companies in previous contract talks, including cost-of-living pay raises, elimination of a two-tier wage and benefit system, and other items.

    That could raise costs for Detroit’s three automakers — General Motors, Ford and Stellantis — and almost inevitably will drive up already expensive auto prices.

    With tallies from six of nine UAW regions counted, incumbent President Ray Curry had a slim lead over Shawn Fain, an international union official who started at a Stellantis plant in Kokomo, Indiana, in a five-candidate race.

    Curry had 38.6% of the vote, while Fain was second with 38%. There likely will be a runoff election early next year between Fain and Curry since neither had a majority of the votes.

    In the race for three vice presidents, Rich Boyer and Mike Booth, both Members United candidates, are first and second in an eight-candidate field, followed by incumbent Vice President Chuck Browning. A runoff could happen there, too.

    Margaret Mock, the Members United candidate for secretary-treasurer, had 62.6% of the vote to lead incumbent Frank Stuglin at 37.4%. Where tallies have been completed, candidates who campaigned on reforming the union also won three of nine regional director positions, with another heading to a runoff.

    It wasn’t clear when the vote count would be finished. The ballots are being counted by a company hired by a court-appointed monitor who is overseeing the election and the union.

    Fain led the Members United ticket, which campaigned on reforming the 372,000-member UAW after the scandal. The election also has broad implications for contract talks with the Detroit auto companies that start next year.

    Fain has advocated for more of a confrontational stance and has accused union leadership of complacency. He has said the UAW has had a philosophy for 40 years of viewing automakers as partners rather than adversaries.

    He said it’s too early to declare a winner but said in an interview Thursday that the early vote totals are “a loud and clear message to the companies and the businesses to get ready, we’re coming for you.”

    The automakers, he said, are making making the best profits in their history, yet are closing factories and costing union jobs. He gave General Motors’ 2019 closure of its Lordstown, Ohio, assembly plant as an example, plus a lack of new vehicles for Stellantis’ Belvidere, Illinois, plant, which he said has lost 3,000 workers.

    At a candidates’ forum in September, Fain said union leaders should have reversed concessions made starting in 2007 and should have won job security guarantees.

    “We’ve had at least 10 years with perfect conditions for regaining and improving what was lost during the Great Recession,” he said.

    The contract talks come at a critical juncture for the union, which faces a transition from internal combustion vehicles to those that run on batteries. With fewer moving parts, fewer people will be needed to make electric vehicles, and jobs making engines and transmissions could be shifted to battery assembly plants that might not be unionized.

    The election came after union members last December decided to directly vote on leaders for the first time instead of having them picked by delegates to a convention.

    Under the old system, convention delegates were picked by local union offices. But the new slate of officers was selected by the current leadership, and there was rarely any serious opposition.

    A company hired by Monitor Neil Barofsky mailed out about 1 million ballots to active and retired union members. But only 106,790, roughly 10.7%, were returned.

    The voting happened after 11 union officials and a late official’s spouse pleaded guilty in the corruption probe since 2017, including the two former presidents, Gary Jones and Dennis Williams. Both were sentenced to prison.

    To avoid a federal takeover, the union agreed to reforms and Barofsky’s appointment to oversee elections of the 14-member executive board.

    Curry, appointed in 2021 to replace retiring Rory Gamble to lead the union, said he has put financial safeguards and reforms in place and has plans to bring union members “back into greater days.” He said at the candidates’ forum that the union also has plans to recruit new members.

    “We don’t just make false demands and deliver false hopes,” he said.

    ————

    This story has been corrected to show that 68% of the vote has been counted, not 73%.

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  • Reform candidates lead in UAW races with 73% of vote counted

    Reform candidates lead in UAW races with 73% of vote counted

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    DETROIT — Members of the United Auto Workers union appeared on Thursday to favor replacing many of their current leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials.

    Reform-minded candidates, many part of the UAW Members United slate, are leading or close in multiple key races with about 73% of the vote in. Many challengers campaigned on rescinding concessions made to companies in previous contract talks, including cost-of-living pay raises, elimination of a two-tier wage and benefit system, and other items.

    That could raise costs for Detroit’s three automakers — General Motors, Ford and Stellantis — and almost inevitably will drive up already expensive auto prices.

    With tallies from six of nine UAW regions counted, incumbent President Ray Curry had a slim lead over Shawn Fain, an international union official who started at a Stellantis plant in Kokomo, Indiana, in a five-candidate race.

    Curry had 38.6% of the vote, while Fain was second with 38%. There likely will be a runoff election early next year between Fain and Curry since neither had a majority of the votes.

    In the race for three vice presidents, Rich Boyer and Mike Booth, both Members United candidates, are first and second in an eight-candidate field, followed by incumbent Vice President Chuck Browning. A runoff could happen there, too.

    Margaret Mock, the Members United candidate for secretary-treasurer, had 62.6% of the vote to lead incumbent Frank Stuglin at 37.4%. Where tallies have been completed, candidates who campaigned on reforming the union also won three of nine regional director positions, with another heading to a runoff.

    It wasn’t clear when the vote count would be finished. The ballots are being counted by a company hired by a court-appointed monitor who is overseeing the election and the union.

    Fain led the Members United ticket, which campaigned on reforming the 372,000-member UAW after the scandal. The election also has broad implications for contract talks with the Detroit auto companies that start next year.

    Fain has advocated for more of a confrontational stance and has accused union leadership of complacency. He has said the UAW has had a philosophy for 40 years of viewing automakers as partners rather than adversaries.

    He hasn’t declared victory but said in an interview Thursday that the early vote totals are “a loud and clear message to the companies and the businesses to get ready, we’re coming for you.”

    The automakers, he said, are making making the best profits in their history, yet are closing factories and costing union jobs. He gave General Motors’ 2019 closure of its Lordstown, Ohio, assembly plant as an example, plus a lack of new vehicles for Stellantis’ Belvidere, Illinois, plant, which he said has lost 3,000 workers.

    At a candidates’ forum in September, Fain said union leaders should have reversed concessions made starting in 2007 and should have won job security guarantees.

    “We’ve had at least 10 years with perfect conditions for regaining and improving what was lost during the Great Recession,” he said.

    The contract talks come at a critical juncture for the union, which faces a transition from internal combustion vehicles to those that run on batteries. With fewer moving parts, fewer people will be needed to make electric vehicles, and jobs making engines and transmissions could be shifted to battery assembly plants that might not be unionized.

    The election came after union members last December decided to directly vote on leaders for the first time instead of having them picked by delegates to a convention.

    Under the old system, convention delegates were picked by local union offices. But the new slate of officers was selected by the current leadership, and there was rarely any serious opposition.

    A company hired by Monitor Neil Barofsky mailed out about 1 million ballots to active and retired union members. But only 106,790, roughly 10.7%, were returned.

    The voting happened after 11 union officials and a late official’s spouse pleaded guilty in the corruption probe since 2017, including the two former presidents, Gary Jones and Dennis Williams. Both were sentenced to prison.

    To avoid a federal takeover, the union agreed to reforms and Barofsky’s appointment to oversee elections of the 14-member executive board.

    Curry, appointed in 2021 to replace retiring Rory Gamble to lead the union, said he has put financial safeguards and reforms in place and has plans to bring union members “back into greater days.” He said at the candidates’ forum that the union also has plans to recruit new members.

    “We don’t just make false demands and deliver false hopes,” he said.

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  • What Cramer is watching Thursday — cooler inflation, FTX crypto fallout, TJX upgrade

    What Cramer is watching Thursday — cooler inflation, FTX crypto fallout, TJX upgrade

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    U.S. stock futures shot up more than 800 points and the 10-year Treasury yield sank below 4% after CPI release.

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  • Elon Musk says Twitter has had ‘massive’ revenue drop as advertisers pause spending

    Elon Musk says Twitter has had ‘massive’ revenue drop as advertisers pause spending

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    Twitter has suffered a “massive drop in revenue” because of advertisers pausing spending on the social media platform, Elon Musk, the new owner of the company, said Friday without providing numbers.

    In a tweet, the Tesla, Twitter, and SpaceX CEO cast blame on “activist groups pressuring advertisers.” He said Twitter hasn’t changed its content moderation strategy, and added the company has done “everything we could to appease the activists.”

    Musk didn’t specify how much revenue the company has lost from the pullback, or how he was able to attribute that loss to pressure from activist groups.

    Musk reiterated his views Friday in an interview at the Baron Investment Conference.

    “We’ve made no change in our operations at all,” Musk said at the event. “And we’ve done our absolute best to appease them and nothing is working. So this is a major concern. And I think this is frankly an attack on the First Amendment.”

    Twitter has fired or laid off approximately 50% of its employees since he took over on Oct. 28.

    In recent days, a number of companies said they would temporarily pause their advertising spending on Twitter to see how things would change there under Musk’s ownership. Tesla competitors General Motors and Audi, and food titan General Mills are among the companies that have paused Twitter spending.

    United Airlines suspended its advertising on Twitter earlier this week, a spokesperson for the carrier said on Friday. The airline is still posting on the platform. It appeared to be the first U.S. passenger airline to say it suspended advertising on Twitter. Airlines separately provide customer service on Twitter, which United is also not suspending, the spokesperson said, declining to provide further detail on the decision.

    Ad giant IPG advised clients to temporarily pause their Twitter media plans, though it’s unclear how many clients are taking IPG agencies’ advice.

    Twitter informed employees Thursday evening that it would begin laying off staff members, according to communications obtained by CNBC. Twitter’s content moderation team is expected to be among those job cuts, Reuters reported, citing tweets by employees.

    Musk in a tweet Friday, addressed the layoffs, saying: “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”

    CNBC has not confirmed this with former Twitter employees.

    CNBC has also learned that deep cuts were made to Twitter’s global marketing team which handles, among other things, reporting and metrics around ad performance, sales performance and spam.

    Earlier this week Musk, who now calls himself “Chief Twit,” met with a group of leaders of civil society organizations to address concerns about hate speech and election-related misinformation on the platform.

    Since Musk took the helm, online trolls and bigots raided Twitter, and hate speech has surged on the platform. Musk also tweeted out, then deleted, an unfounded and anti-LGBTQ conspiracy theory about a home invasion and assault on Paul Pelosi, husband of Speaker of the House Nancy Pelosi.

    Some of the organizations represented in the hourlong Zoom call on Tuesday have now co-signed an open letter to top Twitter advertisers urging them to suspend their ad spending if Musk fails to enforce the company’s safety standards and community guidelines.

    Despite Musk’s claims of a recent revenue slump, Twitter’s ad spending had been on the decline before his takeover of the company was complete, and before civil society organizations began pressuring brands, according to ad analytics platform MediaRadar.

    Advertisers on Twitter increased between April and May, around the time that Musk’s plan to take Twitter private was announced, before it began to decline, according to data from MediaRadar. But the average number of advertisers on the platform fell from 3,900 in May to 2,300 in August. It had 2,900 advertisers in September.

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  • GM temporarily suspends advertising on Twitter following Elon Musk takeover

    GM temporarily suspends advertising on Twitter following Elon Musk takeover

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    DETROIT — General Motors is suspending its advertising on Twitter following Elon Musk’s takeover of the social media platform, the company told CNBC on Friday.

    The Detroit automaker, a rival to Musk-led electric vehicle maker Tesla, said it is “pausing” advertising as it evaluates Twitter’s new direction. It will continue to use the platform to interact with customers but not pay for advertising, GM added.

    “We are engaging with Twitter to understand the direction of the platform under their new ownership. As is normal course of business with a significant change in a media platform, we have temporarily paused our paid advertising. Our customer care interactions on Twitter will continue,” the company said in an emailed statement.

    Under CEO Mary Barra, the Detroit company was among the first automakers to announce billions of dollars in spending to better compete against Tesla in the battery electric vehicle segment.

    A General Motors sign is seen during an event on January 25, 2022 in Lansing, Michigan. – General Motors will create 4,000 new jobs and retaining 1,000, and significantly increasing battery cell and electric truck manufacturing capacity.

    Jeff Kowalsky | AFP | Getty Images

    A spokesperson for Ford Motor, another Tesla rival, told CNBC that the automaker is not currently advertising on Twitter, and had not been doing so prior to Elon Musk’s take-private deal. They added, “We will continue to evaluate the direction of the platform under the new ownership.”

    However, when presented with a screenshot of a promoted tweet from Ford CEO Jim Farley, the spokesperson could not confirm when was the last time Ford or its collaborators may have paid for ads, including promoted tweets, on the platform.

    Ford is continuing to engage with its customers on Twitter.

    Other auto companies, including Rivian, Stellantis and Alphabet-owned Waymo, did not immediately respond to requests for comment on whether they plan to suspend advertising or discontinue using the social media platform in wake of Musk’s $44 billion buyout of Twitter.

    Electric truck maker Nikola said it had no plans to change anything regarding the platform.

    The future direction of Twitter has been central to the takeover story. Musk has said he is a “free speech absolutist,” who would restore the account of former President Donald Trump, who was banned over his tweets during the Jan. 6, 2021, Capitol insurrection.

    Musk said on Friday that he plans a “content moderation council” and will not reinstate any accounts or make major content decisions before it is convened. Musk also said in a statement to advertisers this week that he cannot let Twitter become a “free-for-all hellscape.”

    Henrik Fisker, CEO of EV startup Fisker Inc., deleted his Twitter account earlier this year when Twitter’s board accepted Musk’s bid to buy the company and take it private. Fisker Inc. continues to use Twitter, which every major automotive brand utilizes for customer engagement and marketing.

    Musk has long boasted that Tesla does not pay for traditional advertising, a cost that has added up for conventional automakers’ brands through the years.

    Instead, Tesla rewards people who run, or are members of, Tesla owners’ clubs as well as other social media influencers who promote the company’s products, stock and Musk on social networks, especially Twitter and YouTube as well as on fan blogs.

    They are often granted early access to Tesla products, like the company’s Full Self Driving Beta software, and given passes to company events where attendance is limited.

    In September 2020, Tesla weighed a stockholder proposal to begin strategic, paid advertising to educate the public about its vehicles and charging network. The Tesla board recommended against it, and shareholders voted with the board against starting to pay for traditional ad campaigns. 

    In the company’s annual report for 2021, Tesla wrote: “Historically, we have been able to generate significant media coverage of our company and our products, and we believe we will continue to do so. Such media coverage and word of mouth are the current primary drivers of our sales leads and have helped us achieve sales without traditional advertising and at relatively low marketing costs.”

    It reported marketing, promotional and advertising costs were “immaterial” for the years ended Dec. 31, 2021, 2020 and 2019 in financial filings with the Securities and Exchange Commission.

    — CNBC’s John Rosevear contributed to this report.

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  • Auto prices finally begin to creep down from inflated highs

    Auto prices finally begin to creep down from inflated highs

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    DETROIT — All summer long, Aleen Hudson kept looking for a new minivan or SUV for her growing passenger shuttle service.

    She had a good credit rating and enough cash for a down payment. Yet dealerships in the Detroit area didn’t have any suitable vehicles. Or they’d demand she pay $3,000 to $6,000 above the sticker price. Months of frustration left her despondent.

    “I was depressed,” Hudson said. “I was angry, too.”

    A breakthrough arrived in late September, when a dealer called about a 2022 Chrysler Pacifica. At $41,000, it was hardly a bargain. And it wasn’t quite what Hudson wanted. Yet the dealer was asking only slightly above sticker price, and Hudson felt in no position to walk away. She’s back in business with her own van.

    It could have been worse. Hudson made her purchase just as the prices of both new and used vehicles have been inching down from their eye-watering record highs and more vehicles are gradually becoming available at dealerships. Hudson’s van likely would have cost even more a few months ago.

    Not that anyone should expect prices to fall anywhere near where they were before the pandemic recession struck in early 2020. The swift recovery from the recession left automakers short of parts and vehicles to meet demand. Price skyrocketed, and they’ve scarcely budged since.

    Prices on new and used vehicles remain 30% to 50% above where they were when the pandemic erupted. The average used auto cost nearly $31,000 last month. The average new? $47,000. With higher prices and loan rates combining to push average monthly payments on a new vehicle above $700, millions of buyers have been priced out of the new-vehicle market and are now confined to used vehicles.

    The high prices are yielding substantial profits for most automakers despite sluggish sales. On Tuesday, for example, General Motors reported that its third-quarter net profit jumped more than 36%, thanks in part to sales of pricey pickup trucks and large SUVs.

    Still, as Hudson discovered, many vehicles are becoming slightly more affordable. Signs first emerged weeks ago in the 40-million-sales-a-year used market. As demand waned and inventories rose, prices eased from their springtime heights.

    CarMax said it sold nearly 15,000 fewer vehicles last quarter than it had a year earlier. The CEO of the used-vehicle company, based in Richmond, Virginia, pointed to inflation, higher borrowing rates and diminished consumer confidence.

    A “buyer’s strike” is how Adam Jonas, an auto analyst at Morgan Stanley, characterized the sales drops — a dynamic that typically foretells lower prices. And indeed, the average used vehicle price in September was down 1% from its May peak, according to Edmunds.com.

    At AutoNation, the nation’s largest dealership chain, sales of used vehicles and profit-per-vehicle both dropped last quarter. CEO Mike Manley noted that while the supply of vehicles remains low, used-auto prices are declining.

    “Our analysis shows that we are coming off the high values that we saw before,” Manley told analysts Thursday.

    Ivan Drury, director of insights at Edmunds cautioned that it will take years for used prices to fall close to their pre-pandemic levels. Since 2020, automakers haven’t been leasing as many cars, thereby choking off one key source of late-model used vehicles.

    Similarly, rental companies haven’t been able to buy many new vehicles. So eventually, they are selling fewer autos into the used market. That’s crimped another source of vehicles. And because used cars aren’t sitting long on dealer lots, demand remains strong enough to prop up prices.

    When auto prices first soared two years ago, lower-income buyers were elbowed out of the new-vehicle market. Eventually, many of them couldn’t afford even used autos. People with subprime credit scores (620 or below) bought only 5% of new vehicles last month, down from nearly 9% before the pandemic. That indicated that many lower-income households could no longer afford vehicles, said J.D. Power Vice President Tyson Jominy.

    Higher borrowing rates have compounded the problem. In January 2020, shortly before the pandemic hit, used-vehicle buyers paid an average of 8.4% annual interest, according to Edmunds. Monthly payments averaged $412. By last month, the average rate had reached 9.2%. And because prices had risen for over two years, the average payment had jumped to $567.

    The 1% average drop in used prices will help financially secure buyers with solid credit scores who can qualify for lower loan rates. But for those with poor credit and lower incomes, any price drop will be wiped out by higher borrowing costs.

    The new-vehicle market, by contrast, has become an option mainly for affluent buyers. Automakers are increasingly deploying scarce computer chips to make costly, loaded-out versions of pickups, SUVs and other outsize vehicles, typically with relatively low gas mileage. Last month, the average price of a new vehicle was down slightly from August but remained more than $11,000 above its level in January 2020.

    Glenn Mears, who runs five dealerships south of Canton, Ohio, says the Federal Reserve’s interest rate hikes, by contributing to pricier auto loans, are slowing his showroom traffic.

    “We can feel some pullback,” he said.

    Analysts generally say that with shortages of computer chips and other parts still hobbling factories, new-vehicle prices won’t likely fall substantially. But further modest price drops may be likely. The availability of vehicles on U.S. dealer lots improved to nearly 1.4 million vehicles last month, up from 1 million for most of the year, Cox Automotive reported.

    Before the pandemic, normal supply was far higher — around 4 million. So historically speaking, inventory remains tight and demand still high. Like Hudson, many buyers are still stuck paying sticker price or above.

    “It’s extraordinarily expensive these days,” said Jominy, who estimates that there are still 5 million U.S. customers waiting to buy new vehicles.

    Despite recent stock market declines, many such buyers have built up wealth, especially in their homes, and are rewarding themselves with high-end autos. In the San Francisco Bay area, for example, notes Inder Dosanjh, who runs a 20-dealership group that includes General Motors, Ford, Acura, Volkswagen and Stellantis brands, many people have received substantial pay raises.

    “There’s just a lot of money out there,” he said.

    In its earnings report Tuesday, GM noted that its customer demand is holding up. Though GM and other automakers would like to produce more vehicles, at the moment they are benefiting from slower production, which typically means higher prices and profits.

    John Lawler, Ford’s chief financial officer, noted Wednesday that near-record new-vehicle prices were starting to decline. And consumer appetites are starting to change: Demand for midrange vehicles, he said, has begun to outpace more profitable autos loaded with options.

    Next year could be a turning point, suggested Jeff Windau, an analyst at Edward Jones. With the economy likely to weaken and possibly enter a recession, prices could fall “as consumers become more focused on their financial situation and what they’re willing to bite off from a payment perspective.”

    ————

    This story has been corrected to show that 9% of new-vehicle buyers had subprime credit scores, and that has since dropped to 5%.

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  • Ford reveals third-quarter net loss, weighed down by supply chain problems and Argo A.I. investment

    Ford reveals third-quarter net loss, weighed down by supply chain problems and Argo A.I. investment

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    2023 Ford F-150 Raptor R

    Ford

    DETROIT – Ford Motor recorded a net loss of $827 million during the third quarter, weighed down by supply chain problems and costs related to disbanding its autonomous vehicle unit Argo AI.

    Still, the automaker was able to narrowly beat Wall Street’s subdued expectations for the period and guided to the lowest end of its previously forecast earnings for the year.

    Shares of the company were down roughly 1.5% in extended trading following the report.

    Here’s how Ford performed during the third quarter, compared with analysts estimates as compiled by Refinitiv:

    • Adjusted earnings per share: 30 cents vs. 27 cents estimated
    • Automotive revenue: $37.2 billion vs. $36.25 billion estimated

    The auto industry’s earnings and forecasts are being closely watched by investors for any signs that consumer demand could be weakening amid rising interest rates and looming recession fears. However, both Ford and crosstown rival General Motors continue to say demand for their products remains strong despite outside economic concerns and rising interest rates.

    Ford reported adjusted earnings of $1.8 billion for the quarter, down 40% from a year earlier but slightly above its own previously announced expectations, set last month.

    Ford in September partially pre-released its results, including projected adjusted earnings before interest and taxes in the range of $1.4 billion to $1.7 billion — some analysts had been expecting a quarterly profit closer to $3 billion — but affirmed full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.

    On Wednesday Ford updated its guidance to forecast full-year adjusted earnings before interest and taxes of about $11.5 billion. It raised its full-year adjusted free cash flow forecast, however, to between $9.5 billion and $10 billion – up from $5.5 billion to $6.5 billion – on strength in the company’s automotive operations.

    Argo A.I.

    Ford recorded a $2.7 billion non-cash, pretax charge on its investment in Argo AI, which the company initially invested in starting in 2017. It later split its ownership of Argo AI with German automaker Volkswagen in 2019.

    Ford CFO John Lawler said the company is winding down the operations to focus on advanced driver-assist systems such as its BlueCruise hands-free highway driving system and other operations that aren’t considered “fully autonomous.”

    “It’s become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” he told reporters. “We’ve also concluded that we don’t necessarily have to create that technology ourselves.”

    Some of the roughly 2,000 employees for Argo AI are expected to be offered positions at Ford or Volkswagen, officials said. Volkswagen said in a statement that it will no longer invest in Argo AI.

    Ford’s Q3

    In pre-releasing some results last month, Ford attributed the lower-than-expected earnings to parts shortages affecting 40,000 to 50,000 vehicles as well as an extra $1 billion in unexpected supplier costs during the quarter.

    Lawler on Wednesday said the company still expects to finish those vehicles and have them shipped to dealers by the end of the year.

    The vehicles, largely high-margin pickups and SUVs, dragged down Ford’s North American profits. The company’s adjusted profit margin for the region was just 5%, down from 10.1% a year earlier.

    Ford’s North American operations recorded adjusted earnings of $1.3 billion during the third quarter, down 46% from a year earlier. The automaker recorded earnings gains in Europe and South America, while its operations in China lost $193 million.

    Ford’s overall revenue during the quarter, which includes its financial arm, was $39.4 billion, a 10% increase from a year earlier. Through the third quarter, the company’s year-to-date revenue was $114.1 billion, a 16% increase compared to that same time period in 2022.

    Ford’s earnings come a day after crosstown rival General Motors significantly outperformed Wall Street’s earnings expectations but slightly missed on revenue. GM’s adjusted profit margin for the quarter narrowed to 10.2% compared with 10.7% during the third quarter of 2021, including 10% in North America.

    – CNBC’s John Rosevear contributed to this report.

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  • Head of zero-emission truck venture found guilty of fraud

    Head of zero-emission truck venture found guilty of fraud

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    NEW YORK — The wealthy founder of Nikola Corp. was convicted Friday of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.

    A jury reached the verdict against Trevor Milton after deliberating for about five hours in federal court in Manhattan.

    At trial, the government had portrayed Milton as a con man while his lawyer called him an inspiring visionary who was being railroaded by overzealous prosecutors.

    Those prosecutors alleged that Nikola — founded by Milton in a Utah basement six years ago — falsely claimed to have built its own revolutionary truck that was actually a General Motors Corp. product with Nikola’s logo stamped onto it. There also was evidence that the company produced videos of its trucks that were doctored to hide their flaws.

    Called as a government witness, Nikola’s CEO testified that Milton “was prone to exaggeration” in pitching his venture to investors.

    “The lies — that is what this case is about,” prosecutor Matthew Podolsky told the jury in closing arguments Thursday.

    Defense attorney Marc Mukasey urged acquittal, saying there was “a stunning lack of evidence” that his client ever intended to cheat investors.

    Milton, 40, had pleaded not guilty to securities and wire fraud. He resigned in 2020 amid reports of fraud that sent Nikola’s stock prices into a tailspin.

    At one point, the trial was delayed for more than a week after Milton’s lawyer tested positive for the coronavirus.

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  • Nikola founder’s trial ready for jury after final arguments

    Nikola founder’s trial ready for jury after final arguments

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    NEW YORK — The fate of Nikola Corp ’s founder will be in the hands of a jury after he was portrayed Thursday in closing arguments by a prosecutor as a habitual liar, and by his lawyer as an inspiring visionary being unjustly prosecuted.

    Trevor Milton, 40, has pleaded not guilty to securities and wire fraud. In 2020, he resigned from the company he founded in a Utah basement six years ago.

    Deliberations will begin Friday in the Manhattan federal criminal trial, after it was delayed for over a week after Milton’s lawyer tested positive for the coronavirus.

    In closings Thursday, defense attorney Marc Mukasey urged acquittal, saying there was “a stunning lack of evidence” that his client ever intended to cheat investors.

    “The government never proved fraud,” Mukasey said. “There were no crimes here and Trevor Milton is not guilty.”

    In 2020, Nikola’s stock price plunged and investors suffered heavy losses as reports questioned Milton’s claims that the company had already produced zero-emission 18-wheel trucks.

    The company paid $125 million last year to settle a civil case against it by the Securities and Exchange Commission. Nikola, which continues to operate from an Arizona headquarters, didn’t admit any wrongdoing.

    In his closing rebuttal argument, Assistant U.S. Attorney Matthew Podolsky insisted the evidence was overwhelming that Milton lied repeatedly to make it seem Nikola had produced operable trucks fueled by hydrogen gas and that the company had billions of dollars in contracts when they didn’t exist.

    Podolsky said Milton wanted to get rich and learned that he could dupe investors into supporting Nikola through lies, like when he claimed Nikola had built its own revolutionary truck that was actually a General Motors Corp. product with Nikola’s logo stamped onto it.

    Another example was when he sped up the video of a truck rolling down a hill to make it seem like the company had developed a fully functioning truck when it had not, the prosecutor said.

    “The lies. That is what this case is about,” Podolsky said.

    He said Milton went on television news programs to tell his lies and tweeted them as well.

    Podolsky told jurors not to accept Mukasey’s explanations for his client’s behavior, including arguments that Milton had the support of the company’s board of directors and was not warned by anyone to stop conveying his enthusiasm for Nikola publicly.

    “This is the robber blaming the guard for not stopping him,” he said.

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  • Japan’s Sony, Honda jointly making EVs for 2026 US delivery

    Japan’s Sony, Honda jointly making EVs for 2026 US delivery

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    TOKYO — A new electric car company that brings together two big names in Japanese business, Honda and Sony, officially kicked off Thursday, with both sides stressing their common values of taking up challenges and serving people’s needs.

    The electric vehicle from Sony Honda Mobility Inc. will go on sale in 2025, with deliveries coming first in the U.S. in early 2026, and in Japan later that year, Chief Executive Yasuhide Mizuno told reporters. Pre-orders start 2025.

    In March, Sony Group Corp. and Honda agreed to set up the 50-50 joint venture, with the idea of bringing together Honda’s expertise in autos, mobility technology and sales with Sony’s imaging, network, sensor and entertainment expertise.

    Production will take place at a Honda plant in the U.S., but details such as pricing, platform and the kind of battery to be used were not disclosed. Production volume was also not given, but officials said this was a special model and not intended for massive sales.

    Mizuno, who is from Honda Motor Co., said the collaboration brings together hardware and software to deliver an emotionally satisfying experience on the move.

    “It was necessary to take a totally new approach,” Mizuno told reporters in Tokyo. “We want to make this completely new.”

    The U.S. was chosen for the launch because electric vehicles were already popular there, Japan came second as Honda’s home market, and other markets, including Europe, will follow, but no dates were set, he said.

    Izumi Kawanishi, the Sony executive who became Chief Operating Officer at Sony Mobility, said partners will be added to the project.

    Demand for “zero-emissions” vehicles is expected to grow worldwide amid concerns about climate change and sustainability.

    Sony, which makes the PlayStation video-game console and has movie and music businesses, showed an electric car concept at the CES gadget show in Las Vegas two years ago, and has been eager to find an auto partner.

    Honda has electric vehicles in its lineup, although not as plentiful as do some rivals, like Ford Motor Co. or Nissan Motor Co. Tokyo-based Honda has teamed up with General Motors to share platforms for EVs in North America, but the products are not yet on sale.

    ———

    Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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  • General Motors broadens electric goals with new division

    General Motors broadens electric goals with new division

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    General Motors, which plans to go almost entirely electric by 2035, is creating a new energy division that will produce chargers for electric vehicles, as well as solar panels and other energy-related technology for homes and businesses.

    The company said Tuesday that the unit, called GM Energy, will create systems for households and commercial customers that link electric vehicles to power storage and generation. The division should have the capacity to sell energy from electric vehicle and stationary storage batteries back to utilities during peak periods of energy usage.

    “GM Energy has the opportunity to help deliver sustainable energy products and services that can help mitigate the effect of power outages and provide customers with resilient and cost-effective energy management,” Travis Hester, vice president of GM EV Growth Operations, said in a statement.

    GM’s Energy Services Cloud will include data and energy management tools and let customers manage their energy usage.

    Ultium Charge 360, which includes several charging station networks and software, will expand its portfolio of integrated public charging networks, integrated mobile apps, and additional product and service offerings over time as part of the division.

    GM said it also has partnerships with several companies, including solar technology and energy services provider SunPower. In the deal with SunPower, the two companies will develop and offer customers a home energy system that includes integrated electric vehicle and battery solutions, solar panels and home energy storage. The system will be available at the same time as the retail launch of the 2024 Chevrolet Silverado EV, which is expected to start production in the fall 2023.

    There’s also a pilot project with Pacific Gas and Electric to allow residential customers to use their compatible electric vehicles with a bi-directional charger as backup power for essential home needs during power outages. After initial lab tests, the companies anticipate expanding the offer to some residential customers within PG&E’s service area. This is expected to begin next year.

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  • General Motors broadens electric goals with new division

    General Motors broadens electric goals with new division

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    General Motors, which plans to go almost entirely electric by 2035, is creating a new energy division that will produce chargers for electric vehicles, as well as solar panels and other energy-related technology for homes and businesses.

    The company said Tuesday that the unit, called GM Energy, will create systems for households and commercial customers that link electric vehicles to power storage and generation. The division should have the capacity to sell energy from electric vehicle and stationary storage batteries back to utilities during peak periods of energy usage.

    “GM Energy has the opportunity to help deliver sustainable energy products and services that can help mitigate the effect of power outages and provide customers with resilient and cost-effective energy management,” Travis Hester, vice president of GM EV Growth Operations, said in a statement.

    GM’s Energy Services Cloud will include data and energy management tools and let customers manage their energy usage.

    Ultium Charge 360, which includes several charging station networks and software, will expand its portfolio of integrated public charging networks, integrated mobile apps, and additional product and service offerings over time as part of the division.

    GM said it also has partnerships with several companies, including solar technology and energy services provider SunPower. In the deal with SunPower, the two companies will develop and offer customers a home energy system that includes integrated electric vehicle and battery solutions, solar panels and home energy storage. The system will be available at the same time as the retail launch of the 2024 Chevrolet Silverado EV, which is expected to start production in the fall 2023.

    There’s also a pilot project with Pacific Gas and Electric to allow residential customers to use their compatible electric vehicles with a bi-directional charger as backup power for essential home needs during power outages. After initial lab tests, the companies anticipate expanding the offer to some residential customers within PG&E’s service area. This is expected to begin next year.

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