The Torquest - Your Daily Auto Fix
Automotive news curated from the world of legacy automakers, electric vehicle startups, suppliers and everything in between and beyond.
In this issue: *Cathie Wood picks on GM, praises Tesla* Ford Mustang Mach-E sales, production stays in slow lane* Volkswagen joins the 10,000 electric car club in China* Geely-owned Volvo finally makes IPO plans official*
October 4, 2021. Issue #24
Cathie Wood Picks On Legacy Player GM For Chip Shortage Sulk, Praises Tesla On Stellar Q3 Delivery Nos
Tesla Inc bull and popular money manager Cathie Wood of Ark Invest just cannot stop praising the Elon Musk-led electric automaking company. This time around she has picked on legacy player General Motors Co’s poor third quarter sales volume as a comparison.
In a long twitter rant, Wood said that the Detroit, Michigan-based GM has blamed the semiconductor shortages for a poor show but Tesla delivered record third-quarter sales numbers despite the fact that electric vehicles end up using three to five times more chips per car than the traditional gas-powered automobiles.
The Palo Alto, California-based Tesla delivered 241,300 vehicles in the third quarter, a jump of 73% year-over-year and smashing past expectations of 220,900 deliveries. Tesla sales were also up 20% on a quarter-on-quarter basis.
GM registered a 33% drop in third quarter sales.
Today, $TSLA announced that in the third quarter it sold 241,300 vehicles globally, up 73% year over year (YoY) and 20% quarter over quarter (QOQ). Meanwhile, $GM blamed the ~33% YoY decline in its US sales on chip shortages. What? #EVs require 3-5x more chips per car produced!Wood believes there is an overall weakness in gas-powered auto demand and there’s a likelihood that chip supplies could “loosen up” considerably, perhaps turning the problem from a shortage into a glut.
“Because consumers bought new and used cars to avoid mass transit during the past year, the V-shaped recovery in autos was more dramatic than that after most of the more prolonged recessions during the past 50 years,” Wood said.
Wood had last month said she believes the average electric vehicle price will drop below that of the average gas power vehicle price in the next year or so.
Ark Invest has recently trimmed some of its exposure in Tesla but the stock continues to be its largest holding. Wood has predicted Tesla will hit the $3,000 mark by the end of 2025.
Despite Wood’s prophecy, legacy automakers are known to be rushing to make their most profitable vehicles first and keeping inventory low, resulting in high profit at dealerships.
Tesla shares are up 1.63% at $787.84 a share on Monday. GM shares are up 1.60% at $53.98.
Ford Increases Mustang Mach-E Production Slightly In September Even As Sales Remain In Slow Lane
Ford Motor Co on Monday revealed the sales numbers in the U.S. for the month of September - a significant drop of 17.7% to 156,614 vehicles on a year-on-year basis- but more than any other U.S. automaker.
The improvement was 26% over August when it sold 124,176 vehicles.
The Dearborn, Michigan-based Ford expanded sales in the electrified vehicle segment by 91.6% to 9,150 vehicles. The category includes BEVs, PHEVs, and HEVs.
On the Mustang Mach-E front, sales in September were higher than a month ago but continued to be in the slow lane. The automaker sold 1,578 Mustang Mach-Es in September, compared to 1,448 in August.
Mustang Mach-Es went on sale in December 2021. The five-door electric crossover’s sales hit a peak of 2,854 vehicles in July. The company has sold 18,855 Mustang Mach-Es so far this year.
“With 18,855 Mach-Es sold through September, Mach-E ranks second in full electric SUV sales behind Tesla’s Model Y,” the company said.
In comparison, the transition IC engine Mustangs sales have been slowing. Ford has sold 41,065 Mustangs so far this year, a drop of about 14% on a you basis.
Ford, which is facing quality issues with the Mustang Mach-Es, is recalling thousands of those electric cars in Canada and the United States over a risk of glass roof and windshield potentially coming loose and falling off, gas however increased production.
The automaker has marginally increased the production of Mach-Es to 5,390 vehicles in September, from 5,353 vehicles a month ago in August. The production however remains strong. Ford has produced 51,216 Mustang Mach-Es so far this year.
Unlike the traditional Mustangs, which are made in the United States, the electric Mach-E crossover is built at a Mexican facility.
Ford is likely shipping most of the Mach-Es to Europe.
Volkswagen ID. Series Joins The 10K Electric Car Club In China
Germany’s Volkswagen Ag has set an ambitious target to sell upto 100,000 ID. series electric cars in China by the end of this year. And it may just be waking up to that reality.
For now, the world’s second largest automaker, delivered 10,126 ID. series of electric vehicles in China last month, up 7,023 vehicles from the month ago, as per a cnEVpost report.
While the numbers are not stellar it is a significant jump for Volkswagen as it has just started selling some of its electric ID. series in China where it makes and sells the ID.4 and the ID.6 series with local joint ventures. And its planning to launch more variants.
The September numbers also bring Volkswagen’s monthly ID volumes closer to homegrown rivals Nio Inc and Xpeng Inc.
The German automaker began delivering its first all-electric ID.4 Crozz in March this year, a model that it makes in partnership with China’s FAW Group.
In July, the companies started delivering the six-seater and seven-seater electric vehicle ID.6 Crozz. Sales are expected to get a further boost when Volkswagen launches the more-affordable ID.3 model later this year.
Volkswagen’s OTC shares were down 0.83% at $30.91 a share on Monday.
Geely Owned Volvo Firms Up IPO Plans To Raise $2.9 Billion in Stockholm Listing
Chinese automaker Zhejiang Geely Holding Group-owned Volvo Car Group will raise at least $2.9 billion in an initial public offering.
Geely Sweden – a wholly-owned subsidiary of Zhejiang Geely which acquired Volvo Cars in 2010 – will remain the largest shareholder, the company said in a statement.
The company aims to use the proceeds to focus its energies to become and electric car company with a business model that is similar to that of Tesla Inc.
“The decision to proceed with an IPO will help strengthen our brand and accelerate our transformation strategy – towards full electrification, direct consumer relationships and the next level of safety,” Håkan Samuelsson, CEO of Volvo Cars said.
The fundraising could value the company at about $20 billion, as per a Bloomberg report.
An earlier attempt to list the company was shelved in 2018 after investors retrenched after the proposed valuation of as much as $30 billion.
The listing would be one of Europe’s biggest so far this year, as per Reuters.
Separately, Geely and Volvo-owned electric carmaker Polestar — which counts actor Leonardo DiCaprio as an investor— last month agreed to go public via a blank-check firm Gores Guggenheim Inc at a roughly $20 billion valuation. Volvo expects to own close to 50% of the combined company.
