Americans are paying ever higher prices to buy big, fuel-thirsty trucks like Ford Motor Co’s bestselling F-Series pickups as they are in love with them even though Wall Street may love the shares of Silicon Valley electric carmaker Tesla Inc.
As governments float proposals to ban internal combustion engines over the next two decades, the future of legacy automakers like Ford, General Motors Co and Fiat Chrysler Automobiles NV uncertain and hence the auto industry is at a crossroads.
But especially in the United States, consumer enthusiasm for trucks and sport utility vehicles is strong in the present. And billions in cash to mount a challenge to Tesla is being provided by this trend to Ford, GM and other established automakers.
Boosting annual sales to 500,000 vehicles a year is the ambition of Tesla. But it has reported a net loss of $666.7 million through the first six months of 2017 as it wrestles with the sort of production problems that old-line automakers have largely put behind them. When it reports results next Wednesday, analysts expect the company to post a third quarter net loss of $380.4 million.
Global automakers have been slow to roll electric cars out until now because they are money losers. But more electric vehicles in their fleets over the next several years is being forced to be put by established automakers due to regulatory and consumer pressures. And a competitive edge can be given to them by profits from pickups and SUVs in a cash-intensive industry.
Rising $2,800 to an average $45,400 a truck in the third quarter was the average price of one of its F-series pickups, Ford said on Thursday. And rising nearly 11 percent to 658,636 vehicles for the first nine months of this year was the sales of F-series trucks, which range from spartan work trucks to Platinum models with the features - and price tags - of a European luxury sedan.
As Chief Executive Mary Barra has talked up plans for putting self-driving, electric Chevrolet Bolts into ride services fleets within a few quarters, GM has driven its share price up nearly 30 percent so far in 2017.
In the automaker’s North American business during the latest quarter, improved profit margins on trucks were “one of the big drivers of the overall 8.3 percent margins”, Barra told investors on Tuesday.
GM now has $31.4 billion in available funds, including $17.3 billion in cash after it emerged from a government funded bankruptcy eight years ago.
Ford has said that it will spend $5 billion developing battery electric and hybrid models even though it lags behind GM in sales of battery electric models. The plans include shifting $500 million into electric vehicle development from internal combustion projects, Ford’s new Chief Executive Officer Jim Hackett has said.
Confidence that they can make money on electric cars as battery costs come down is increasing among automakers.
Volkswagen AG’s Audi brand expects that by 2025, 25 percent of sales would be accounted for by 2025 a fleet of electric models that the company is gearing up for. Scott Keogh, head of Audi’s U.S. operations, said that Audi plans to launch an electric SUV “in the sweet spot of the market” in 2019 in the United States.
Confidence that electric cars will become “a significant contributor to our performance” was expressed by Renault SA Chief Executive Carlos Ghosn earlier this month.
(Source:www.reuters.com)
As governments float proposals to ban internal combustion engines over the next two decades, the future of legacy automakers like Ford, General Motors Co and Fiat Chrysler Automobiles NV uncertain and hence the auto industry is at a crossroads.
But especially in the United States, consumer enthusiasm for trucks and sport utility vehicles is strong in the present. And billions in cash to mount a challenge to Tesla is being provided by this trend to Ford, GM and other established automakers.
Boosting annual sales to 500,000 vehicles a year is the ambition of Tesla. But it has reported a net loss of $666.7 million through the first six months of 2017 as it wrestles with the sort of production problems that old-line automakers have largely put behind them. When it reports results next Wednesday, analysts expect the company to post a third quarter net loss of $380.4 million.
Global automakers have been slow to roll electric cars out until now because they are money losers. But more electric vehicles in their fleets over the next several years is being forced to be put by established automakers due to regulatory and consumer pressures. And a competitive edge can be given to them by profits from pickups and SUVs in a cash-intensive industry.
Rising $2,800 to an average $45,400 a truck in the third quarter was the average price of one of its F-series pickups, Ford said on Thursday. And rising nearly 11 percent to 658,636 vehicles for the first nine months of this year was the sales of F-series trucks, which range from spartan work trucks to Platinum models with the features - and price tags - of a European luxury sedan.
As Chief Executive Mary Barra has talked up plans for putting self-driving, electric Chevrolet Bolts into ride services fleets within a few quarters, GM has driven its share price up nearly 30 percent so far in 2017.
In the automaker’s North American business during the latest quarter, improved profit margins on trucks were “one of the big drivers of the overall 8.3 percent margins”, Barra told investors on Tuesday.
GM now has $31.4 billion in available funds, including $17.3 billion in cash after it emerged from a government funded bankruptcy eight years ago.
Ford has said that it will spend $5 billion developing battery electric and hybrid models even though it lags behind GM in sales of battery electric models. The plans include shifting $500 million into electric vehicle development from internal combustion projects, Ford’s new Chief Executive Officer Jim Hackett has said.
Confidence that they can make money on electric cars as battery costs come down is increasing among automakers.
Volkswagen AG’s Audi brand expects that by 2025, 25 percent of sales would be accounted for by 2025 a fleet of electric models that the company is gearing up for. Scott Keogh, head of Audi’s U.S. operations, said that Audi plans to launch an electric SUV “in the sweet spot of the market” in 2019 in the United States.
Confidence that electric cars will become “a significant contributor to our performance” was expressed by Renault SA Chief Executive Carlos Ghosn earlier this month.
(Source:www.reuters.com)
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