BV Bank, a Brazilian bank leader in vehicle loans, is running a pilot that uses tokenization to manage vehicle financing and sales operations. The first phase of the tests involves automating consumer-to-consumer vehicle sales processes, including the delivery of tokenized money in exchange for the ownership of the vehicle. Brazilian BV Bank Pilots Tokenization Model […]
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The 2024 Buick Envista.
GM
DETROIT — General Motors on Tuesday reported a 1.5% decline in first-quarter U.S. vehicle sales compared to a year ago, as the overall auto industry normalizes after years of disruptions and volatile results.
The Detroit automaker said the decline to 594,233 vehicles sold during the first three months of the year was largely due to a 22.9% year-over-year decline in sales to fleet customers. Retail sales to customers were up 6%, GM said.
GM’s sales were in-line with Cox Automotive estimates but below expectations for the overall industry. The auto data firm forecast U.S. auto industry sales to be up 5.5% from a year earlier.
Buick was the only GM brand to report a sales increase during the quarter, up 16.4% from a year earlier. The GMC truck brand was off about 5%, while Cadillac and Chevrolet were both off about 2%.
GM reported sales of its full-size pickups totaled roughly 197,000 units during the first quarter, up 3.6% from a year earlier, marking its best performance during that time since the first quarter of 2020.
“GM gained retail market share year-over-year with strong mix and pricing, our inventories are in good shape heading into the spring, and production and deliveries of Ultium Platform EVs are rising, led by the Cadillac Lyriq. We’re on plan,” GM North America President Marissa West said in a statement.
Sales of GM’s all-electric vehicles, closely watched by Wall Street, remained miniscule during the first quarter. EV sales totaled 16,425 units, or 2.8% of the automaker’s overall sales during the period.
GM is in the process of ramping up production of its newest EVs, including the Cadillac Lyriq and the Blazer EV, while winding down sales of Chevrolet Bolt models, which were discontinued in December.
First-quarter sales of the Blazer EV were limited, totaling 600 units, due to a stop-sale that was in effect from late December until early March to resolve software issues.
Other automakers reported varying results for the first quarter, as inventories and sales normalize to levels not seen since before the Covid-19 pandemic began.
Hyundai Motor America CEO Randy Parker noted the industry is getting more competitive as automakers attempt to maintain profits of recent years without oversubsidizing sales.
“The market is changing swiftly, and it’s gotten a lot more competitive,” Parker said Tuesday during a media call.
Hyundai reported its best March sales ever last month, at 76,920 vehicles sold, but its first-quarter sales were only up 0.2% compared to a year earlier.
Separately, Hyundai’s Genesis luxury brand reported sales of 14,777 vehicles during the first quarter, up 7.3% year over year.
Here is how other major automakers performed in U.S. sales compared to the first quarter of 2023:
Tesla (TSLA 1.25%) and BYD (BYDDY -0.33%) are the leaders in electric vehicles (EVs). It’s a burgeoning market, but prosperity isn’t a given — a reality that Rivian Automotive (RIVN 2.62%) is slowly coming to terms with these days.
Taking a closer look at where Rivian stands now and its future plans helps illustrate why Tesla and BYD remain the top choices for those looking to ride the wave of the EV industry’s growth, while cautious investors may want to steer clear of Rivian for the time being.
Image source: Getty Images.
First let’s delve into Rivian’s current standing. This will provide a benchmark for Tesla and BYD.
Scaling up production and delivering vehicles is the name of the game in the EV industry. From this perspective, Rivian is making commendable progress. In Q4 2023, the company disclosed that it had manufactured 17,541 vehicles and delivered 13,972. Both those numbers are up more than 70% compared to last year. Over the entirety of 2023, it produced 57,232 vehicles (up 135%) and delivered 50,122 (up 147%). Not too shabby!
But while the company has made improvements to scale production, it has yet to generate any real profits as expenses have soared. As of Q3 2023, Rivian reported a net loss of more than $1.3 billion. Thia means that for every vehicle it sold, it lost $33,000. Without any income, its initial cash position of $19.9 billion in 2021 is now down more than 60% to under $8 billion.
There is reason to be cautiously (emphasis on cautiously) optimistic about Rivian. It’s undeniably on the right track in increasing production, and a future megafactory in Georgia that would increase production nearly 10-fold could be a game changer. However, until more tangible results come about, like turning a profit, these developments remain nothing more than hopeful. If something doesn’t change, and fast, Rivian’s future looks bleak.
Now, let’s look at Tesla and BYD. As with Rivian, I will break down production and deliveries first.
At this point, it’s like clockwork for Tesla to break records, and this past year was no different. In Q4 2023, the company produced 494,989 vehicles and delivered 484,507. In 2023, vehicle deliveries grew 38% from last year to 1.81 million, while production grew 35% to 1.85 million, both new records for yearly totals.
Then there is the Chinese-based BYD, considered the second-best EV maker but quickly closing the gap on Tesla. In 2023, BYD built more than 3 million vehicles. However, 1.57 million of these cars were electric-only models, as the company still produces hybrid vehicles that use gasoline to increase driving ranges. Still, BYD’s car production is up more than 70% this year, and when hybrids are accounted for, total production rose by 62% from last year.
Beyond sheer production and delivery numbers, financial prowess sets Tesla and BYD apart. As of Q3, Tesla boasted net income of more than $1.8 billion and gross profit margins just shy of 18%, while BYD raked in $1.4 billion and achieved margins around 22%. In stark contrast, Rivian has lost more than $10 billion in just over two years with profit margins hovering near a negative 35%.
RIVN Net Income (Quarterly) data by YCharts
Arguably, the most compelling value propositions of Tesla and BYD are their future growth trajectories. Tesla is not only constructing new factories to increase production but also exploring several technological frontiers such as artificial intelligence, autonomous driving, and robotics. Each of these endeavors holds the potential to generate new revenue as the technology becomes refined and integrated into society.
While BYD is less active on the technological innovation front, the company still holds significant future upside. Thanks to its perfection of the EV supply chain, BYD can manufacture a vehicle in as little as 18 months and sell it for as little as $11,000. As the company expands beyond China into Southeast Asian and Latin American markets, it will likely find new levels of success as its suite of cost-friendly models can cater to consumers even in emerging economies.
As for Rivian, its future prospects appear uncertain at best. Although it plans to build a megafactory in Georgia, there are considerable risks as these projects are often susceptible to additional unforeseen costs and delays. By focusing solely on this project, Rivian is taking a big gamble without having established a proven business model.
Large vehicles are considered some of the toughest to electrify. But Pierce, the largest maker of firetrucks in North America, is giving it a try.
Pierce has already delivered its Volterra electric firetruck to numerous fire departments across the country and has more on the way.
It is part of a larger electrification plan by Pierce’s parent, Oshkosh Corporation. The Wisconsin-based company is a kind of superstore of purpose-built vehicles. Need a news van? Mail truck? Garbage truck? Construction lift? Oshkosh makes them all, along with airport emergency vehicles, tow trucks, concrete mixers, truck-mounted cranes, military vehicles and others.
Oshkosh leverages technology that can be applied to various products to suit different markets. Electrification and automation are just two examples.
The company makes an electric firetruck called the Volterra and is electrifying other vehicles in other departments. For example, Oshkosh has won a contract to produce both battery electric and internal combustion mail delivery vehicles for the United States Postal Service. The contract allows for the delivery of 50,000 vehicles and 165,000 vehicles over a period of 10 years, respectively. The postal truck is designed so that internal combustion versions can be retrofitted with battery electric technology.
Watch the video to learn more.
Amazon users will be able to find and buy Hyundai vehicles of choice from different US local dealers beginning next year with the Alexa built-in expected to be integrated into the company’s next-generation vehicles.
Leading online retail shopping company Amazon.com Inc (NASDAQ: AMZN) has announced a broad and strategic partnership with South Korea-based automotive manufacturer Hyundai Motor Co. Ltd (KRX: 005380) to ensure sustainable growth and innovative customer experiences. According to the announcement made during the 2023 Los Angeles Auto Show, Amazon will be launching online sales of Hyundai vehicles in the United States beginning next year. Additionally, Hyundai named Amazon Web Services (AWS) as its preferred cloud provider in a bid to digitize its next-generation models and compete with other automakers. To crown the partnership, Amazon announced that the Alexa built-in experience will launch on Hyundai’s new vehicles.
Commenting on the partnership, Amazon Chief Executive Officer Andy Jassy highlighted that both companies share a similar passion for improving customer experience. As a result, Jassy highlighted that both companies will continue to work together for more innovative technology products in the coming years.
“Our broad, strategic partnership should do just that, from changing the ease with which customers can buy vehicles online to making it simple to use Alexa in Hyundai vehicles for entertainment, shopping, smart home adjustments, and calendar checks to enabling Hyundai to transform their customer experiences and business operations by moving to AWS. We look forward to inventing together for many years,” Jassy noted.
Notably, Hyundai vehicles beginning in 2025 will incorporate a hands-free Alexa experience similar to the one used in homes. For instance, Hyundai drivers will be able to ask Alexa to play music, set reminders, and connect with their home devices like climate control.
The partnership between Amazon and Hyundai is strategic to the respective shareholders amid heightened competition in their vehicle and technology industries. Furthermore, Hyundai customers will have more value for their money through Amazon product. According to the President and Chief Executive Officer (CEO) of Hyundai Jaehoon (Jay) Chang, the partnership with Amazon will help expand its portfolio and grow its sales network as it transitions to fully electric vehicles.
“Amazon is the ideal partner to help realize our vision of progress for humanity, including improving how people and goods move more efficiently and sustainably. Hyundai is the first automotive company available for full end-to-end transactions in Amazon’s US store and this is another example of how we continue to push for ways to elevate the customer journey together with our outstanding retail partners,” Jay noted.
Following the announcement, AMZN stock tweaked 0.07 percent in the after-hours session to trade around $142.93. The $1.48-trillion-valued company has seen its stock market gain about 70 percent year-to-date.
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The stock market as a whole had a fine Tuesday, but electric vehicle (EV) stocks — and those of companies related to their business — really had a fine trading session. Many were well in positive territory.
SUV maker Fisker (FSR 5.50%), for example, closed nearly 6% higher. Charging station specialist ChargePoint Holdings (CHPT 9.78%) added just under 10% to its share price, while battery recycling company Li-Cycle (LICY 11.64%) rose by just under 12%. Canoo (GOEV 1.67%), a utility vehicle maker, advanced nearly 2%.
Several factors were pushing up the prices of EVs and affiliated companies.
A major one is the United Auto Workers (UAW) strike, which continues to intensify. Each day seems to bring news of layoffs at, and a work stoppage targeting, at least one of the three incumbent carmakers targeted by UAW — General Motors, Ford, and Stellantis.
While the strike is deleterious to the auto industry as a whole, EV and related companies aren’t directly affected. That’s why the Fiskers, Canoos, and ChargePoints of the world are generally looked on more favorably than any of the Big Three these days.
Another factor bringing investors back to EV and adjacent stocks is bond yields. The benchmark 10-year Treasury note yield came down notably after market hours Monday. It’s now retreated from multiyear highs.
This development with Treasuries can be seen positively for the EV segment in two important ways.
First, the production of vehicles and related products (like batteries) is an expensive activity undertaken by companies that are frequently still at an early stage of their business lives. Many have had to take on debt to fund their operations, so cheaper borrowing can benefit them financially.
Second, since Treasuries (and other federal government debt instruments) are considered to be among the safest investible assets, if their yields decline, they become less attractive to investors. And a flight from safety often benefits riskier assets; the market is more willing to take a chance on relatively uncertain plays.
While the rare EV maker or affiliated stock is no longer considered to be high risk — hello, Tesla! — for the most part, such titles are lumped into that somewhat intimidating category.
As I’ve warned previously, no investor should casually fling money at any EV or related company due to short-term factors. The strike won’t last forever, while it’s entirely conceivable that the Federal Reserve will hike interest rates again (a move certain to broadly increase yields).
Rather, it’s smart to be very choosy when investing in the segment, as its companies are very much not created equal. Some (Canoo, for instance) have compelling and offbeat product lines, while others (ChargePoint) have become dominant in their niches.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Stellantis and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
Used cars are offered for sale at a dealership on July 11, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
DETROIT – Prices of wholesale used vehicles may have bottomed for the year, as Cox Automotive said prices last month increased for the first time since March.
Cox reported Friday its Manheim Used Vehicle Value Index was 212.2 in August, up 0.2% from July. It marks the lowest increase in the index this year, as prices have generally fallen from all-time highs stemming from the coronavirus pandemic and supply chain problems of recent years.
The index, which tracks vehicles sold at its U.S. wholesale dealership auctions, remains elevated from historical levels but is down 7.7% compared with August 2022. Retail prices for consumers traditionally follow changes in wholesale prices.
“August brought a stop to wholesale price declines, though it was only a small reversal of the larger magnitude declines so far this spring and early summer,” Chris Frey, Cox senior manager of economic and industry insights, said in a release.
Frey said wholesale used vehicle prices are not expected to change much through the end of the year, with tight inventories and expected sales levels preventing any substantial pricing declines.
Cox estimates used vehicle retail sales in August were up 5% compared with July, and year over year they were up 0.8%. The average price listed for a used vehicle In July – the most recent data – was $ 27,028, down from a month earlier but still elevated from historical levels.
Used vehicle prices have been elevated since the early days of the Covid pandemic, as the global health crisis combined with supply chain issues caused production of new vehicles to sporadically idle. That led to a low supply of new vehicles and record-high prices amid resilient demand. The costs and scarcity of inventory led consumers to the used vehicle market, boosting those prices as well.
Cox expects the used vehicle wholesale market to experience a “slow and gradual recovery” in prices to pre-pandemic levels by 2028.