#HighFinance

In what could be a tacit admission the transition to electric vehicles is going approximately as smoothly as a Michigan secondary road, it is being reported that suits at the Blue Oval are rolling back some of the requirements demanded of dealers in order to shill EVs to customers.

In yet another chapter of dealers (and their financial arms) behaving badly, Toyota Motor Credit has been levied $12 million civil fine and also order to fork over $48 million in restitution after a court found the organization played fast and loose with some rules.

While coverage of high finance isn’t generally a top priority of this site – we know most of you lot would rather read about Murilee’s latest Junkyard Find and, to be honest, so would I – any deal involving a pair of major fuel station brands is worth more than a passing mention.

With dealer lots starting to fill back up with product after years of lean inventories that encouraged salespeople to ask for absolutely ludicrous prices, the Federal Reserve has found that lenders are declining would-be borrowers at a record-setting pace. 

The reasons for this are many. Annual percentage rates have come up, requiring consumers to pay more money over time that lenders just aren’t certain they’ll see a return on. More people are also defaulting on loans across the board and inflationary pressures are poised to make the issue worse since the dollar just doesn’t go as far as it used to.  

We posted earlier about the fact that many hourly employees at General Motors could enjoy five-figure bonuses this year, thanks in part to tweaks in the UAW agreement and a banner year for profits. Now, word has leaked about bonuses for the salaried. They may be down from last year – but many remain far higher than the ones paid to hourly employees. 

According to the Sherlocks at Cox Automotive, Americans saw new-vehicle affordability decline in December and reached a new low for the 2022 calendar year.

And, in other news, the sky is blue and water is wet. 

Ford Motor Co. has decided to continue offloading Rivian stock, with the burgeoning electric vehicle manufacturer at roughly $24 per share. After divesting itself of 8 million shares earlier this month, Blue Oval sold another 7 million ahead of the weekend — leaving itself holding about 9.7 percent of the company.

With 86.9 million shares leftover from the sale, Ford remains a relevant stakeholder. However, investors are growing worried that the legacy manufacturer will continue dumping Rivian as a way of salvaging future losses. Ford, which previously owned some 102 million shares in Rivian, endured a massive $3.1-billion loss in its first quarter as the value of its investment in the company slumped. Worse still, investors are souring on tech and EV stocks in general.

The fortunes of many are won and lost on America’s stock markets – or even on reports of share sales. Markets reacted this morning to a news report alleging Ford Motor Company is divesting itself of 8 million shares in Rivian, the latter being an EV startup with designs on producing the R1T pickup truck and R1S SUV.

In premarket trading, Rivian’s stock fell over 10 percent to just $25 per share, well off its 52-week high of nearly 180 bucks. Yeesh.

It will surprise exactly zero of our readers that prices of second-hand vehicles are through the roof. A constricted new car supply which leads to a dearth of trade-ins has contributed to customers facing the prospect of paying exorbitant sums for previously loved vehicles. Now, a new stat from Edmunds.com puts a precise number on the issue.

While no one around this neck of the woods would call themselves experts in finer points of the stock market, we do know how to add. Talking heads at the Wall Street Journal are reporting Rivian has set an initial share price of $78 for its IPO, a heady sum to be sure. What drives this story to another dimension is they’ve allegedly sold 153 million shares at this price.

For those keeping track, that means they raised nearly $12 billion – making RIVN the biggest listing so far in 2021.

A captive lending arm can be a major source of profit for automakers. After all, keeping that paper in-house instead of farming it out to a third party permits some of that sweet interest-driven revenue rolling on a monthly recurring basis. Why else did most of us, for many years during GMAC’s heyday, refer to General Motors as a finance company which just happened to sell cars?

Following several years of shacking up with Santander in order to offer financing for their customers, Stellantis has bought F1 Holdings Corp., an outfit that is the parent of Texas-based First Investors Financial Services Group. Now they’ve spent $285 million in this all-cash transaction, Stellantis is no longer the only major automaker in America without a captive finance arm.

Maybe established automakers can impress investors with electric promises, after all. Following Hyundai’s announcement that it will turn the Ioniq nameplate into an electric vehicle brand encompassing several models, the company’s stock lit the afterburners, achieving its best share price showing since 2017.

Lofty electric ambitions aren’t a sure-fire way to juice a stock, as Ford has shown year after painful year, but they can achieve results.

Fiat Chrysler Automobiles revealed a second-quarter loss of $1.24 billion on Friday, down slightly from the $1.8 billion net loss posted for Q1.

As before, the pandemic weighed heavily on the automaker’s finances, though this spring’s two-month shutdown of domestic manufacturing and the revenue drop arising from the virus didn’t spell red ink for its all-important North American region.

Ford Motor Company made many investors happy on Thursday, reporting a less-than-feared loss in the second-quarter of 2020.

Despite the company’s chief financial officer predicting a Q2 loss of $5 billion or more three months ago, the automaker’s actual earnings before interest and taxes was only in the red $1.9 billion — a minor miracle given the stormy backdrop.

Everything was moving in Tesla’s favor Wednesday night, with the electric automaker reporting an unexpected quarterly profit — its fourth in a row — for Q2 2020. This positive financial news, made possible by other automakers’ hunger for regulatory credits, sent the company’s already elevated (overvalued?) stock closer to the face of God.

At the same time, CEO Elon Musk announced something long suspected: That Tesla’s next domestic assembly plant will set up shop in Austin, Texas.