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Auto Dinosaurs Show They’re Not Dead Yet - Reviews

27th February 2021
"General Motors’ shares have also nearly tripled since March. The company beat analysts’ expectations last week when it reported net profit for the fourth quarter of $2.8 billion, against a loss a year earlier."

A year ago, investors almost left the major global carmakers for dead. Shares of Daimler, General Motors, and Ford Motor were at a 10-year low. Electric vehicle start-ups without any sales were sometimes worth more than traditional automakers with tens of thousands of employees and factories around the world. The pandemic looked as if it would seal the fate of the dinosaurs.

Auto Dinosaurs Show They’re Not Dead Yet - Reviews

But it turns out that the old behemoths may yet not be doomed. On Thursday, earnings announced by Daimler underscored a remarkable revival by some conventional carmakers. These companies have managed to survive the pandemic, redirect to electric vehicles, and convince stock market investors that they will not let Tesla take their customers without a fight. 

Since reaching a low point in March, Daimler shares have tripled and rose again on Thursday after the company said net profit for the year increased from 2019 by almost 50 % to $4.8 billion.

General Motors’ shares have also nearly tripled since March. The company beat analysts’ expectations last week when it reported net profit for the fourth quarter of $2.8 billion, against a loss a year earlier.

Auto Dinosaurs Show They’re Not Dead Yet - Reviews

In addition to making more money than investors thought was possible in a year of turmoil, the two companies, which date to the early 20th century, have been making decisions that show they grasp the technological changes upending the industry.

Daimler shares spiked after the company said this month that it would splits its car and truck division into separate companies, each with its own stock listing. Daimler, based in Stuttgart, Germany, makes Mercedes-Benz luxury cars and Freightliner trucks.

Ola Källenius, the Daimler chief executive, said the decision to break up the company was intended to give managers more freedom to react to technological change.

“As the speed of the transformation of the auto industries is picking up,” Mr. Källenius said in an interview, “decision-making speed is crucial.”

G.M.’s promise to swear off fossil fuels, though not for another 14 years, set off a chain reaction in the industry. Ford said Wednesday that by 2030, all its passenger cars sold in Europe would run solely on batteries. Jaguar said Monday that all its Jaguar luxury cars and 60 percent of Land Rover luxury S.U.V.s would run solely on batteries by 2030.

Auto Dinosaurs Show They’re Not Dead Yet - Reviews

Mr. Källenius has avoided making a similar declaration. In many markets where the company is active, there is no infrastructure for electric cars, he pointed out. Therefore, a vow of fossil-fuel abstinence “is not something we should do just to get a headline,” he said.

But all future Mercedes-Benz models will be designed to be electric, Mr. Källenius said. “Our technology path is clear,” he said. “We are going to take a leading position. It’s a tad too early to pick a date for the world when the last combustion engine will leave the production line.”

Investors seem to be rewarding carmakers that show they can build electric cars. Shares of Ford, whose

Mustang Mach-E has gotten good reviews, have doubled since hitting their nadir in March. Shares of the French carmaker Renault have also more than doubled since then; its affordable Zoe subcompact was the best-selling battery-powered car in Europe last year.

Daimler will begin selling several new electric vehicles this year, including the Mercedes-Benz EQS, a counterpart to the company’s top-of-the-line S Class car. The EQS will go on sale in the summer for a starting price probably above $100,000.

“Gradually the financial market is starting to look at our technology portfolio, and everything we have in the pipeline,” Mr. Källenius said.

So far, electric cars are nowhere near as profitable for Daimler and other traditional carmakers as gasoline models. Battery Systems are more costly than conventional engines and transmissions, and automakers are still learning how to manufacture electric cars efficiently. It will take time to achieve the profit margins “we’re used to on the internal combustion side,” Mr. Källenius said.

Daimler’s unexpectedly healthy profit in 2020 was the result of old-fashioned cost-cutting rather than any technological breakthrough. The company reduced its work force by 7,000 employees, or 4 percent, and cut the research and development budget, which Mr. Källenius said was still big compared with competitors.

When the pandemic struck, Daimler quickly dialed back production so it was not stuck with unsold vehicles, Mr. Källenius said.

Even after the sharp gains in their share prices, Daimler and G.M. are still worth only about one-tenth as much on the stock market as Tesla, which makes only a tiny fraction as many vehicles. Investors are dazzled by Elon Musk, the Tesla chief executive, and have more faith in a company that makes nothing but electric cars.

As Mr. Källenius conceded, the dinosaurs still have a lot of convincing to do before investors will believe they have as much potential.

“The financial market is going to wait and see a little bit,” he said. “How is this going to play out?”

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Compiled by : Rahul Shrestha Rahul Shrestha

Honda, General Motors sign deal to work on vehicles together

26th February 2021
"The companies say they plan to share vehicle underpinnings as well as engines and transmissions."

General Motors and Honda are moving toward an alliance in North America to share vehicle development and technology costs as the industry moves toward electric and autonomous vehicles.

The nonbinding memorandum of understanding was announced Thursday, and the companies say they plan to share vehicle underpinnings as well as engines and transmissions.

It’s another sign of increasing consolidation in the automotive business as companies face huge capital outlays to develop current products as well as battery-powered and self-driving vehicles.

The auto industry has a long history of being pressured by costs and lower (profit) margins,” said Edward Jones analyst Jeff Windau. “They’re trying to get to the other side here on an expensive vehicle development process, and being able to do that as efficiently as possible.

No details were given on what vehicles would be developed jointly, but the companies said in a statement that planning work will start immediately and include vehicles powered by both electricity and internal combustion engines. Engineering work would begin early next year. They also will cooperate on manufacturing, parts purchasing, research and connected services.

Earlier this year, crosstown rival Ford finalized a similar deal with Germany’s Volkswagen, while Italian-American automaker Fiat Chrysler is heading toward a merger with France’s PSA Peugeot early in 2021.

In the GM-Honda deal, the companies say they’ll collaborate on a “range of vehicles sold under each company’s distinct brands.”

The announcement builds on work the companies have been doing jointly on electric and hydrogen fuel cell vehicles, as well as an autonomous vehicle. In April the companies announced they would jointly develop two electric vehicles for Honda based on GM’s global electric vehicle platform. Windau said the fuel cell work started in 2013, so it’s no surprise that the cooperation would be broadened.

“The alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources,” GM President Mark Reuss said Thursday in a statement. He said the companies would get “significant synergies” in developing vehicles.

We can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology while maintaining our own distinct and competitive product offerings,” Honda Executive Vice President Seiji Kuraishi said in the statement.

The alliance would be governed by a joint committee of senior executives from both companies, the statement said.

Windau said the alliance could extend to one company making vehicles for the other at one of its factories in the U.S., where GM has excess manufacturing capacity. It would be relatively simple to build a Honda on a GM assembly line if the vehicles were built on the same platform and had the same powertrains, he said.

Differentiating between Honda and GM vehicles built on the same underpinnings could be a problem, although Windau expects GM to focus on trucks and larger vehicles and Honda on vehicles built off of car platforms.

Windau says he doesn’t see the alliance evolving into a full merger between the U.S. and Japanese automakers.

Source: AP

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General Motors electric vehicle plan just got bigger bolder and expensive

27th February 2021
"GM says it will spend $27 billion by 2025 to release 30 EVs globally"

General Motors announced Thursday that it was dumping more money into its electrification plans and would also be accelerating its production to release more electric vehicles sooner than expected.

Speaking at a conference hosted by the British bank Barclays, GM CEO Mary Barra said the company would spend $27 billion on electric and autonomous vehicles through 2025 — up from the $20 billion it announced before the COVID-19 pandemic. Also by 2025, GM will launch 30 new electric vehicles around the world, more than two-thirds of which will be available in North America. The vehicles will span GM’s entire brand portfolio, including Cadillac, Buick, GMC, and Chevrolet, and will come in a range of prices.

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Previously, the company said it would release 20 new EVs by 2023, though most of those were expected to launch in China, where demand for electric vehicles is much higher thanks to strict emissions rules.

GM has unveiled two new EVs in the last few months: the Cadillac Lyriq SUV, expected to go into production in late 2022, and the GMC Hummer EV, slated for late 2021. But the auto giant has been criticized for bringing vehicles to market too late, while other automakers are racing to get their EVs to customers much sooner.

Climate change is real, and we want to be part of the solution by putting everyone in an electric vehicle,” Barra said in a statement. “We are transitioning to an all-electric portfolio from a position of strength and we’re focused on growth. We can accelerate our EV plans because we are rapidly building a competitive advantage in batteries, software, vehicle integration, manufacturing, and customer experience.”

The news is meant to convince those investors on Wall Street who have been jittery about GM’s ability to catch up to Tesla, which has been the only automaker to successfully build an EV business over the last few years. Meanwhile, legacy automakers are stepping up their own EV plans, with Ford expecting to begin delivering its Mustang Mach-E SUV to customers by the end of the year and Volkswagen going into production on its electric ID 4 SUV early next year.

GM also said it was bolstering its estimates about its scalable Ultium battery architecture thanks to “engineering advances.” The automaker now says it anticipates getting 450 miles of range out of its Ultium batteries on a full charge, up from the previously estimated range of 400 miles.

The company said it was already working on the second-generation version of Ultium, which is projected to deliver “twice the energy density at less than half the cost of today’s chemistry.” GM said that this next-gen version of Ultium will cost “60 percent less” than batteries in use today. The company is prototype testing this next-generation battery technology, which is expected to be available mid-decade.
 

Source: indiatoday


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