Category: High Finance

By on August 1, 2017

Tesla Model 3, Image: Tesla

The production Tesla Model 3, revealed in full at a Friday evening handover ceremony, is an impressive vehicle, but it’s also the California automaker’s most important vehicle. With 220 miles of range in stripped-down base trim, or 310 miles for the starting sum of $44,ooo (the only version available at launch), the curvaceous sedan has no shortage of fans. It’s also facing no shortage of threats.

The company’s future as a mass-market “disruptor” of the American automotive landscape hinges on the Model 3’s trouble-free production at Tesla’s Fremont assembly plant, as well as timely deliveries to the half-million reservation holders. Unforeseen quality issues, a breakdown in the supply chain, or worker strife could all conspire to give the vehicle — and company — a black eye.

After a year spent giving investors everything they wished for, the company’s once-skyrocketing stock isn’t on the same firm ground as before. The first trading day after the event reflected this. Investors are nervous about a number of things: the model’s easily inflatable price, the company’s extremely lofty production target, and CEO Elon Musk’s repeated mentions of “hell.” Read More >

By on July 7, 2017

Tesla Model 3 Duo - Image: Tesla

If Tesla stock was an airplane, it would have left Earth’s atmosphere sometime this spring. By June, that aircraft — let’s call it the Model P — would have been within striking distance of Mars. Indeed, Tesla investors made out like bandits as the company’s shares soared and its market cap sailed past that of Ford and General Motors, making it the most valuable domestic automaker.

For a while, it seemed nothing could stop Tesla’s meteoric rise. Not labor strife, not worries about the Model 3’s production timeline, not a cracked A-pillar on a freshly delivered Model S, not Model X doors trapping people inside a burning vehicle, not allegations of subpar working conditions, nothing. Tesla may as well have tried buying the rights to the word Teflon.

Well, CEO Elon Musk said it best himself in May. The company’s market valuation was “higher than we have any right to deserve,” he told The Guardian, a month before Tesla shares rose to a record $383.45. As the saying goes, “What goes up…” Read More >

By on May 31, 2017

Bright colors and lowered prices try to attract customers to a California used car lot, Image: Bike Tourist/Bigstock.com

The low, low monthly payments offered by spreading the cost of a new or used vehicle across a vast gulf of time is certainly an attractive one, even though the practice is fraught with hidden danger.

For U.S. car buyers, it has also become a very popular one, with data showing just how many people have decided to embrace a 73- to 84-month payment plan. Not only are their spending habits changing, they’re also changing their lender. Read More >

By on May 22, 2017

Mark Fields, Image: Ford Motor Co.

Mark Fields has reportedly been fired from his position as CEO of Ford Motor Company, to be replaced by a man he appointed as head of the automaker’s mobility subsidiary.

According to Forbes, the company will announce the appointment of Jim Hackett as CEO this morning, part of a broader shakeup of the company’s upper ranks. Hackett, former CEO of Steelcase, served on the automaker’s board for three years before being named head of Ford Smart Mobility LLC in March, 2016.

Fields, a 28-year Ford veteran who replaced Alan Mulally in mid-2014, was reportedly booted by the company’s board amid a continued decline in share values. Two weeks ago, the CEO was grilled by board members and shareholders alike over the direction he has taken the company. Read More >

By on May 19, 2017

Aston Martin Logo Emblem

Rumors that Aston Martin is destined for an initial public offering, either eventually or imminently, have persisted ever since former parent Ford offloaded the British luxury marque in 2007.

The brand has come a long way since Ford dropped it off at the orphanage by expanding into new segments, spawning a sub-brand, and entering the non-automotive realms of merchandise and luxury speedboats. As its trajectory increasingly mirrors that of recently spun-off Ferrari, sources claim an IPO is right around the corner. Read More >

By on May 17, 2017

Mark-Fields (Image: Ford)

A day after media reports described an impending mass layoff of Ford Motor Company employees, the automaker has clarified who gets to keep a job.

While the scale of the job reductions is less than previously reported — a 10-percent global workforce reduction is off the table — Ford does plan to cull its salaried North American and Asian workforce by one-tenth in a bid to cut costs.

The move comes after last week’s tense shareholders meeting during which investors and analysts grilled CEO Mark Fields over the company’s sinking market valuation. Since taking the helm three years ago, Fields has seen the company’s stock price sink by roughly 40 percent. Hourly workers aren’t affected by the plan, though the same can’t be said for white-collar employees. Read More >

By on May 9, 2017

paul-elio

As TTAC reported recently, Elio Motors disclosed in its most recent annual report to the Securities and Exchange Commission it needs an additional $64 million to begin series production of its first vehicle at a former General Motors assembly plant in Shreveport, Louisiana. This is on top of the $312 million it previously stated it required to bring the high-mileage trike to reality.

That isn’t the worst news.

In the filing, Elio Motors announced it was laying off sales and engineering personnel to conserve resources as it focused on securing more financing, primarily through the sale of stock and taking on more debt. An unnamed vendor is also in a payment dispute with Elio Motors, and the company is running a $100+ million deficit.

“Sure, there’s bad news,” Elio said on a phone call with TTAC, “but there’s also good news in the annual report that people are ignoring.”

Read More >

By on May 4, 2017

2017 Nissan Rogue Sport

If supermarkets, gasoline retailers and a slew of other automakers can offer branded credit cards, why not Nissan?

The Japanese automaker most closely associated with the word “value” is throwing a perk at its customer base, rolling out a consumer credit card program to turn those fuel and meal purchases into real Nissan cents.

The Nissan Visa card, offered through Synchrony Financial, allows dedicated brand loyalists (with good credit) to collect points towards a new or pre-owned Nissan vehicle, or servicing. While some owners might entertain thoughts of gassing and eating their way into a new Armada, the card’s other features are probably a bigger draw. The fine print, however, might prove less tempting. Read More >

By on May 3, 2017

dealership

April was the fourth consecutive month to see U.S. auto sales underperform compared to 2016, leading many to speculate that the long-awaited slump has finally arrived. New car sales aren’t the only thing slipping, as used vehicle values — diminished by a flood of off-lease stock and new car incentives — is on the same downward trajectory.

At the same time, the country’s biggest auto lenders have taken a look around and do not like what they see. No bank wants to be stuck with a low-value repossessed car, so purse strings are tightening across the United States. Securing that next loan just became harder.

Of course, this is the last thing any automaker wants to hear. Read More >

By on April 28, 2017

2017 Ford F-150 Lariat - Image: Ford

What a difference a few (hundred thousand) recalls make. In a sales market best described as stagnant, a widespread vehicle glitch can dog an automaker’s balance sheet. That seems to be the case at Ford Motor Company, which saw its first-quarter profit fall 35 percent on a combination of factors — not the least of which was a pair of recalls of engine fires and faulty door latches.

Elsewhere in the domestic market, General Motors rode to the financial finish line with a record post-bankruptcy net income while Fiat Chrysler Automobiles climbed further into the black. Read More >

By on April 26, 2017

[Image: Audi AG]

After history’s largest and most expensive automotive scandal forced a sudden pivot at Volkswagen Group — from expansion-minded to profit-focused — the German automaker might let go of a cherished toy.

According to insider sources who spoke to Reuters, VW is exploring the sale of Italian motorcycle manufacturer Ducati as part of a company-wide streamlining effort. After shoveling over $20 billion to the United States in a bid to end its diesel debacle, the company is in full penny-pinching mode.

The revered boutique motorcycle company was a long-awaited feather in ex-VW chairman Ferdinand Piëch’s hat, but after just five years of ownership, it may be time for Ducati to find a new home. Read More >

By on April 4, 2017

tesla factory fremont

Workers are likely spinning in office chairs and there’s probably a second frozen yogurt machine on its way to Fremont as you read this.

After hitting a springboard on Monday morning, Tesla’s stock market value has now surpassed that of the former top-ranked U.S. automaker General Motors. This comes just a day after the electric automaker’s surging shares pushed past Ford, placing it in the number two spot.

There’s nowhere to go except down. What, too cynical? Read More >

By on April 3, 2017

tesla model-s-rear

For a car company that sells a tiny fraction of the volume put out by the likes of Ford, General Motors and Fiat Chrysler Automobiles, Tesla’s investors have given the electric automaker clear bragging rights.

Despite generous debt, tight timelines and razor-thin profitability, Tesla’s stock market value sprinted past Ford today, placing it in the number two spot among domestic automakers. The company, which has yet to offer a vehicle most normal Americans can afford, holds a market cap of $47.81 billion at last count. Read More >

By on March 29, 2017

keys car sale

A third of all subprime car loans are now being categorized into the ominous-sounding “deep subprime” group. The designation has become progressively more inclusive since America clawed its way out of the recession and now accounts for 32.5 percent of all high-risk loans — up from just 5.1 percent in 2010.

While consumers have fallen behind on most subprime auto loans, the deep classification is responsible for the most serious cases of nonpayment. Delinquencies surpassing 60-day periods have tripled since 2012 and indicate little sign of stabilizing.  Read More >

By on March 16, 2017

2018 Volvo XC60, Image: Volvo Cars

Volvo denies that it wants to return to publicly listed status, but a new round of fundraising has many believing the Swedish automaker is about to end its 20-year absence from the stock market.

According to the Financial Times, the Geely-owned company hopes to raise about $500 million from a new batch of preference shares. Unlike the last time it held out its hat, this time Volvo wants Chinese buy-in. Read More >

Recent Comments

  • akear: Hackett is turning out to be as loathsome as I thought he would. At least Fields had a vision for the future....
  • akear: Have you noticed just about all the Japanese car makers produce better sedans than Detroit. GM what a disgrace!
  • Ltd1983: You should actually visit Charleston sometime. It might be in SC, but it’s full of latte-sipping,...
  • threeer: So maybe some of that $300 Billion (plus) trade deficit we “enjoy” with China year over year is...
  • Penguinlord: “All work, and no play? Give Jack a Mighty Boy!” Unfortunately for my slogan, this thing...

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