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Tag: XE:VOW

  • ‘We have a deal’: EU bans new gas-fueled cars starting in 2035

    ‘We have a deal’: EU bans new gas-fueled cars starting in 2035

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    The European Union reached a deal Thursday to effectively ban new gas-powered cars beginning in 2035.

    It’s a move seen as a key part of a broader plan to reduce carbon emissions across economic sectors — and a major policy achievement to carry into high-profile United Nations climate-change talks in Egypt early next month.

    Speculation about a deal, which had been heavily debated, was reported earlier this week and confirmed Thursday via a tweet from the spokesperson for the rotating presidency of the bloc, currently held by the Czech Republic.

    Broadly, the agreement is part of a plan that requires a 55% cut in emissions across transportation, buildings, power generation and other sources this decade. That halfway mark is seen as a major milestone as the EU aims to reach net-zero emissions by 2050.

    The announcement comes as the U.N. climate arm has released a series of updated reports this week. One chastised the “highly inadequate” steps to date by rich nations to cut emissions of Earth-warming greenhouse gases, such as those from burning fossil fuels. The window to act is closing but is not quite shut yet, according to the Emissions Gap report from the U.N. Environment Programme. “Global and national climate commitments are falling pitifully short,” U.N. Secretary-General Antonio Guterres said Thursday. “We are headed for a global catastrophe.”

    The EU is the world’s largest trade bloc, and its moves could push other major economies to also set firm cutoff dates for gasoline
    RB00,
    -0.52%

    and diesel engines. Volkswagen AG
    VOW,
    +0.88%

    and Daimler Truck Holding AG
    DTG,
    +2.67%

    are already moving deeper into electric vehicles. Volkswagen this week said it would stop selling internal-combustion-engine cars in Europe between 2033 and 2035.

    Other major economies, including the U.S., have set similar goals, but the U.S. has not set any federal-level restrictions on vehicle manufacturing. Some individual automakers, including General Motors
    GM,
    +0.79%
    ,
    have set their own timelines. And California approved plans in August to mandate a gradual phasing out of vehicles powered by internal-combustion engines, with only zero-emission cars and a small portion of plug-in gas/electric hybrids to be allowed by 2035.

    As the world’s fifth-largest economy, California can create ripple effects with its moves. At least 15 other states have signed on to California’s existing zero-emission vehicle program or have shown interest in and are working toward codifying the change. Among them, Washington, Massachusetts, New York, Oregon and Vermont are expected to adopt California’s ban on new gasoline-fueled vehicles.

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  • Ford stock is now a ‘sell’ at UBS as an oversupply problem looms

    Ford stock is now a ‘sell’ at UBS as an oversupply problem looms

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    Shares of Ford Motor Co. were hit hard Monday by UBS analyst Patrick Hummel’s recommendation that investors sell, as the auto industry is facing a worrisome U-turn from undersupply to oversupply.

    Hummel also cut his ratings on several other global auto makers, including General Motors Co.
    GM,
    -5.59%
    ,
    saying that as a recession concerns grow, “demand destruction is no longer a vague risk.”

    In addition to all of the data suggesting the economy is slowing, Hummel said growing U.S. dealer inventories, weak used-car pricing, used-car dealer profit warnings and signs indicating deteriorating orders and shorter delivery times make him more cautious on the overall auto industry.

    Don’t miss: CarMax stock suffered biggest selloff since the year 2000, as inflation, low consumer confidence lead to big profit miss.

    “We think it will only take 3-6 months for the auto industry to end up in oversupply, which will put an abrupt end to a 3-year phase of unprecedented OEM [original equipment manufacturer] pricing power and margins,” Hummel wrote in a note to clients.

    As part of his negative industry outlook, he cut his rating on Ford
    F,
    -7.38%

    to sell from neutral and his stock price target to $10 from $13, with the new target implying about 11% downside from current levels.

    Ford’s stock sank 7.6% in morning trading. It was trading up just 0.6% month to date, after plunging 26.5% in September to suffer its worst monthly performance since it plummeted 30.6% during pandemic-stricken March 2020.

    Hummel noted that Ford has already warned about having more vehicles in inventory than expected, and above payments to suppliers running about $1 billion higher than projected, so he sees little margin left for negative surprises in terms of fourth-quarter deliveries and supply costs.

    Hummel cut his 2023 adjusted earnings-per-share estimate by 61% to 52 cents a share, to reflect a $6.5 billion drop in price and sales mix. The compares with the current 2023 FactSet EPS consensus of $1.87.

    “This sounds very negative, but Ford gains $19 billion in price alone since the beginning of 2020,” Hummel wrote.

    Also read: Ford again raises price of F-150 Lightning electric pickup.

    Read more: Ford September sales fall as drop in trucks offsets near tripling in EVs.

    Meanwhile, GM’s stock dove 6.9% in morning trading toward a three-month low, and shares have shed 2.5% so far this month after tumbling 16% last month.

    Hummel downgraded GM to neutral from buy, and dropped his price target by 32%, to $38 from $56.

    The rating remains above Ford’s, because unlike its rival, Hummel noted that GM has had “no hiccups” in its third-quarter production schedule and therefore a “solid” quarterly report is expected. However, the downgrade reflects the fact that GM is “not immune” to a downturn in the industry.

    Separately, Hummel also cut his stock-price target on Tesla Inc.
    TSLA,
    -0.16%

    to $350 from $367, saying that following a third-quarter volume report that was below expectations, it will be “more challenging” for the electric-vehicle maker to meet its 2022 delivery growth target.

    However, Hummel reiterated his buy rating on Tesla, as he believes the EV maker is best positioned to use pricing as the tool to fill its factories.

    “Overall, the recession outlook should result in moderately lower margins for Tesla than previously expected, but we’re highly confident that by keeping the top line [revenue] momentum, Tesla will even widen the gap vs. competitors in terms of profitability,” Hummel wrote.

    Ford’s stock has fallen 3% over the past three months, while GM shares have lost 3.1% and Tesla’s stock has dropped 11.8%. In comparison, the S&P 500 index
    SPX,
    -1.08%

    has declined 7.5% the past three months.

    Among other auto makers, he also downgraded both Renault SA
    RNO,
    +2.41%

    RNLSY,
    +1.17%

    and Volkswagen AG
    VOW,
    -3.29%

    to neutral from buy. He also downgraded auto parts makers Continental AG
    CON,
    +0.10%

    and Faurecia SE
    EO,
    -3.77%

    FURCF,
    -3.67%

    to neutral from buy.

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  • Volkswagen’s Porsche IPO prices at top of its range

    Volkswagen’s Porsche IPO prices at top of its range

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    Volkswagen AG said late Wednesday that it priced Porsche AG’s initial public offering at the top of its range, setting the sports-car maker’s IPO on a course to be among the largest ever in Europe.

    VW
    VOW,
    +1.77%

    priced the IPO at EUR82.50 a share, or about $80, valuing Porsche
    P911,

    at more than $70 billion. In a nod to Porsche’s iconic 911 two-door car, first introduced in the mid-1960s, 911 million shares were made available.

    See also: Porsche IPO is set for Thursday. Here’s what to know.

    Porsche shares are expected to trade on the Frankfurt Stock Exchange on Thursday.

    VW is planning to distribute 49% of the proceeds in a special dividend, and set a December meeting to put the proposal to a shareholder vote.

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