By on July 29, 2020

Carlos Tavares, CEO of Groupe PSA, believes the secret to mainstreaming electric vehicles may have something to do with the industry being able to sell them at a profit. The French automaker’s boss has expressed concerns about a segment that’s almost entirely propped up by taxpayers — sounds likes someone might have taken a business course before running a multinational automaker!

It’s not that EVs are bad; they’re just too novel to be a bargain. Tavares believes the high development costs associated with newer technologies have effectively made electric cars money-losers without financial assistance from the government. He thinks their ultimate success (or failure) hinges upon finding a way to make them profitable without being perpetually subsidized by the government while reducing the amount of raw materials required for battery manufacture. As a bonus, he hinted that automakers might have juicer R&D budgets if they prioritized spending  hopefully accelerating the process of making EVs a little easier on everyone’s bank account.

“Affordability will be the challenge for the next five years in terms of costs,” Tavares told the Financial Times this week. “Those breakthroughs need to come from real estate, distribution costs, sourcing all the components of cost structure will have to be combined to bring this affordability.” (Read More…)

By on May 7, 2020

vw

Hey, things crop up. Little things, like a global pandemic that ground the economy (and vehicle production, and sales) to a halt for two months, can just appear out of the blue and wreak all sorts of havoc.

Because of just such an occurrence, Volkswagen of America’s long-awaited return to black ink will have to wait. (Read More…)

By on June 6, 2019

2018 Chevrolet Bolt - Image: Chevrolet

There are a number of things holding up the electric revolution, but one of the biggest obstacles is the high sticker price of battery-powered vehicles compared to internal combustion rivals. General Motors recognizes this wants to reassure potential customers that this won’t be the case forever. On Wednesday, GM President Mark Reuss told the UBS Global Industrials and Transportation Conference that his company will deliver “very average transaction prices” for battery driven vehicles sooner than anticipated.

Many analysts fingered 2025 as the first year we could realistically expect electric cars to fall in line with their ICE counterparts in terms of price. But those earlier predictions are now under fire from world events — notably, uncertainty surrounding the world’s ability to mine the necessary materials at scale, plus a trade war involving one of the world’s largest battery producers. (Read More…)

By on August 29, 2018

Ford formed a team this week, called it the “Enterprise Product Line Management (EPLM) group,” and put it to work with the company’s marketing, engineering, mobility, and product development arms to overhaul the company’s product lineup. The goal is to study what customers want and use that information to build more profitable, competitive vehicles.

The team is split into ten smaller divisions that will focus their efforts on a specific model or product group — including everything from electric models to rugged off-roaders. However, EPLM won’t simply be responsible for their development — it’s also in charge of making sure customers are engaged with everything Ford offers, and that the products are brought to market swiftly, sell well, and remain profitable to manufacture. That’s a pretty full plate, if you ask us.  (Read More…)

By on May 9, 2018

 

Image: Shutterstock

In last Wednesday’s Question of the Day post, we asked you to build the perfect manufacturer lineup. As you responded and built your hodgepodge lists of desirable present day cars from various manufacturers, capitalist and commenter Dal20402 had something else on his mind: profitability.

Propulsion, platforms, and product planning are on the agenda today. What combination is the most profitable?

(Read More…)

By on August 1, 2017

honda fit grille

Exchange rates seriously hurt Japanese manufacturers over the past year as the yen bobbed and weaved following 2015’s surge. However, Honda was not among them. The final quarter of 2016 saw the automaker posting a 27 percent earnings increase, despite being hammered by the same foreign exchange losses as the rest of its Pacific brethren.

The first quarter of 2017 appears to have shaped up much the same way, only with slimmer margins — exactly as Honda predicted. Knowing that the North American market was about to take a turn for the worse, company analysts clung to the hope that more favorable currency rates and higher-than-expected sales in Asia would keep operating profits out of the red. Earnings ultimately creeping ahead by 0.9 percent to 269.21 billion yen ($2.40 billion) for Q1 — no thanks to the United States.  (Read More…)

By on May 11, 2017

ford logo

As anticipated, Ford CEO Mark Fields was grilled today over his plans to improve the company’s waning fortunes by board members who had scheduled extra time to question him.

Hot topics at the annual meeting centered on why profits are falling, what is Ford doing about the market shift toward SUVs, and how the company’s colossal investments into technology are affecting its present-day financial situation. Ford has poured billions into self-driving vehicles and ride-sharing platforms as its traditional car business loses some ground to General Motors in a slowing U.S. market. Fields spearheaded Ford’s rebranding as a mobility company, but many have suggested this future-focus isn’t healthy for the brand.

Fields stuck to his guns, emphasizing that Ford was heading “aggressively but also prudently” into “the biggest strategic shift in the history of our company.”  (Read More…)

By on May 5, 2017

2018 Volkswagen Atlas yellow front quarter on road

Volkswagen Group’s core brand has targeted an end to profit losses in the North America by the end of the decade, setting its break-even point for 2020. Central themes of the plan are dependent on cost cutting measures and higher-margin SUV models it believes will bring it back from emissions scandal purgatory. In its most recent announcement, VW continued to tout electric vehicles as an inevitable key focus by 2025, but hasn’t lifted the veil on all that entails.

In the short term, however, Volkswagen is promising the “biggest product offensive in its history,” with ten new models coming this year alone. In actuality the number is half that, as five of those vehicles are updated versions of existing models. The real number could be even smaller if VW is counting the Atlas/Teramont as separate vehicles; the same goes for the two wheelbases of the Tiguan. And, based on the information it provided us, that does appear to be the case.  (Read More…)

By on May 4, 2017

812-superfast

Thanks to the increasing wealth of the world’s elite, supercars have remained in fashion. Ferrari profits surged upward in the first quarter of 2017 as the Italian automaker continued a scheme designed to gradually accelerate volume.

The brand’s net income over the first three months of 2017 climbed to 124 million euros ($135 million) from 78 million euros during same period last year. Meanwhile, overall revenue increased 22 percent to €821 million, helped largely by engine sales to Fiat Chrysler’s Maserati — the car you buy when you wanted a Ferrari, but fell just shy of being able to afford one. (Read More…)

By on May 3, 2017

2017 Bolt

Profitability is right around the corner, but so far the sign marking the turn isn’t in sight. That seems to be the gist of comments made by Mark Reuss, General Motors’ executive vice president for product development, who recently claimed his company would be the first automaker to turn a profit selling cheaper electric vehicles.

Right now, the high cost of producing EVs makes it a money-losing proposition for automakers struggling to find an edge in the growing technology war. While Tesla might disagree with Reuss’ insinuation, the dedicated electric automaker has only ever posted a couple of slim quarterly profits, with revenue from its pricey EVs eaten up by expenditures elsewhere.

At a company like GM, piles of truck and SUV-generated cash allows for a model like the Chevrolet Bolt — a low-priced EV that beats the competition in range, but allegedly drains $8,000 to $9,000 from the company with each unit sold. That’s all going to change, said Reuss. (Read More…)

By on October 9, 2014

2014 Aston Martin Vanquish

Aston Martin saw its pretax loss fall by a third in 2013 to £25.4 million ($41 million) over the same period in 2012.

(Read More…)

By on January 28, 2014

opel-cascada-cabriolet-2013-001-1350468054

Appearing before Opel’s best and brightest in Germany, General Motors CEO Mary Barra proclaimed her company’s European brand, though unprofitable, is a vital one for the General.

(Read More…)

By on November 25, 2013

2013 Volkswagen Beetle Convertible 70s, Exterior, Side 3/4, Picture Courtesy of Alex L. Dykes

With plans to give the world more of their wonders, such as the XL1, Twin Up! and Jetta, through 2018, Volkswagen has opted to shield their product spending from cost-cutting.

(Read More…)

By on December 20, 2009

Rest In Peace. Picture courtesy peacetek.net

Sweden’s prime minister Fredrik Reinfeldt had his fill of failed negotiations. Returning home from round-the-clock talks at the Copenhagen climate conference, he said that he saw the Saab collapse coming. Sweden’s prime minister is “unsurprised” by the collapse of the sale, says Reuters.  Asked if he was surprised, Reinfeldt  said: “No, the process was built around a loss-making company and an American owner that owned Saab for 20 years and made a profit in one of the 20.  It’s clear that it was not successful enough.” Sweden’s head blames GM for the failure.
(Read More…)

Recent Comments

  • Steve S.: Do you have any opinions that Fox News implant in your brain?
  • Steve S.: Username checks out.
  • danms6: I’ve been a long time reader but decided it was worth logging in to let TTAC know persistent content...
  • mcs: ” they are not ready for prime time, they cost too much,” One company, Tesla, moved 200,000 during...
  • 28-Cars-Later: “Hybrids, however, make a great deal of sense.” Precisely, yet its as if the proven...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber