Yahoo Autos Elon Musk’s Unwavering Support For Donald Trump Is Already Paying Off For Tesla
Good morning! It’s Wednesday, November 6, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Tesla Shares Are Up After Donald Trump Victory
After months of campaigns, endorsements and even an assassination attempt, convicted felon Donald Trump has won the U.S. election and will return to the White House in 2025. Celebrations and commiserations are starting across the country as the result sinks in and the winners and losers in the race emerge. One of those big winners is Tesla boss Elon Musk, who backed Trump throughout the campaign and is now reaping the rewards of his endorsement.
Despite Trump starting the campaign as an avid opponent of electric vehicles, the support and funds he received from Musk appeared to change his mind on the topic and the “Home Alone 2" actor even promised Musk a job at the White House should he win re-election. Now that he has won the 2024 election, Trump’s victory is having a positive impact on Musk’s business ventures, with Tesla stock rising following the result, reports Reuters.
In pre-market trading this morning, Tesla stock was up by more than 10 percent, the site reports. The rise is the latest boost to Tesla stock, which has been on the up in recent weeks after months of sharp decline. Now, the results of the election look set to shake up the company’s fortunes once again:
“It’s still highly unclear what would happen to subsidies for EVs, it’s likely a more conciliatory policy will be incoming,” Susannah Streeter, head of money and markets at Hargreaves Landsown.
“He’s likely to want to keep Elon Musk onside and if the promised government advisory role comes through Musk will wield more influence.”
Tesla’s Frankfurt-listed shares also rallied more than 14% on Wednesday.
Late last month, Musk said he expects Tesla vehicle sales to grow 20% to 30% next year. Its U.S.-listed shares were trading at $283 in premarket trading on Wednesday.
Following Musk’s ardent support for Trump, the Republican promised the Tesla boss a job leading up a new government efficiency commission that will be set up once he takes office. What that will entail remains to be seen.
I’m sure Musk believes he deserves a win like this. After all, America is about helping the little guy, so if he pockets a few extra million bucks and gets himself a new job off the back of a vote that could set the rest of the country back a few decades then that’s what the country is all about, right? Just don’t say anything about foreigners interfering in American elections.
2nd Gear: BMW Sales, Profits Are Down
If you can’t endorse a political candidate who’s facing numerous lawsuits and a criminal conviction, then it’s pretty tough being an automaker these days. After Toyota posted its first drop in profits in years, BMW has followed suit with a drop in earnings of its own.
The German automaker has seen its profit margin drop to a four-year low, saw profits fall by more than 60 percent and lowered its earnings predictions for the remainder of the year, reports Automotive News. The hit to profitability for the automaker came as it battled recalls and slower demand in China:
The company’s auto-making margin slumped to 2.3 percent, well below its 2024 target of at least 6 percent and the lowest since the second quarter of 2020, when the coronavirus pandemic was crushing commerce.
Operating profit was €1.7 billion ($1.82 billion) for the quarter, down 61 percent from the €4.4 billion in the same quarter last year. Revenue fell 16 percent to €32.4 billion.
BMW confirmed its adjusted full-year guidance. The company expects a significant decrease in group earnings and slightly lower vehicle deliveries than in the previous year, with an automaking margin between 6 percent to 7 percent.
In a statement BMW Chief Financial Officer Walter Mertl said that “with stringent management” BMW “remains on track” to hit its 2024 auto free cash flow target. “In the fourth quarter, sequentially higher deliveries and a stronger product mix will support our earnings,” he said.
Falling sales wasn’t the only reason BMW’s profits were down, it’s also had to fork out almost $1 billion to fix urgent recalls that have plagued its cars in recent months. The automaker recalled 1.5 million cars around the world in September following a two-year investigation into braking issues in some models. The massive fund will be used to remedy the issue and ensure it doesn’t happen again.
The results paint a pretty bleak outlook for BMW, but there was at least one glimmer of good news in the company’s financial results: its EVs are doing just fine. Deliveries of electric BMWs like the i4 sedan and iX SUV were up by 10 percent compared with the same period last year. Maybe this ought to tell execs at the company something?
3rd Gear: Honda Profits Drop 15 Percent
It’s not just BMW that’s struggling to turn a profit these days, Honda has also just posted some pretty awful results for the second quarter of its financial year. The Civic maker saw earnings drop by 15 percent during the three months to the end of September, reports Reuters.
The drop in profits means that Honda made 257.9 billion yen (around $1.68 billion) during the three-month period after sales dropped off in China. The drop marks the automakers first drop in earnings in more than seven financial quarters, reports Reuters:
The profit compared to 302.1 billion yen in the same period last year, and the 427.2 billion yen average of seven analyst estimates in an LSEG survey.
The company maintained its full-year operating profit forecast of 1.42 trillion yen.
It said in presentation materials that its April-September sales result was lower than that of last year mainly due to pressures in China that offset higher vehicle sales in the U.S. and Japan.
Honda said last week its global vehicle sales shrank 1.5% to 2.8 million over the first nine months of the year, as a hefty 29% drop in China and a 6% fall in Asia and Oceania outpaced a stronger performance in its major U.S. and Japan markets.
The drop in China is particularly concerning for Honda as the country was such a big money spinner for it for years. Between 2020 and 2022, China was Honda’s largest sales and production market but its might there has been waning as it faced stiffer competition from homegrown brands.
Underestimating the advancements made by Chinese automakers in the past five years could be about to come back to bite quite a few global automakers in the coming years.
4th Gear: GM Recalls Chevrolet Bolt Again
You could be forgiven for thinking you’ve knocked your head and woken up in the past, as Trump has just won an election and General Motors is recalling the Chevrolet Bolt over fire risks in the electric vehicle. You haven’t, however, and instead it’s just a spooky coincidence that both are happening again around the same time.
GM has issued a recall of the Bolt EVs and EUVs after issues were uncovered with the cars’ software that could increase the risk of fires, reports the Detroit Free Press. The recall impacts just 107 cars that were reportedly already repaired in the initial Bolt recall, which hit more than 140,000 cars:
The automaker had to recall 142,000 Bolts globally a few years ago because of the issue. On Tuesday, the National Highway Traffic Safety Administration posted a recall of 107 Chevrolet Bolt EVs and EUVs, which is an SUV-like styling of the vehicle, over a fire risk. This new recall covers model year 2020-22 Bolt vehicles that were previously repaired for such a risk.
In its post, NHTSA stated, “The installation of advanced diagnostic software may have failed. As such, the high voltage battery could catch fire when charged to full or nearly full capacity.”
NHTSA said Chevrolet dealers will reinstall advanced diagnostic software free of charge to fix the problem.
Until dealers can fix the software glitch, owners of affected Bolts are being asked to charge their cars little and often, park outside after charging and not charging their cars indoors and overnight.
If you are worried that your car might be affected by a recall, there are a few easy ways to check if it’s the case. First up, the NHTSA has a super handy app that you can use to see if your vehicle is impacted by a recall, or you can head to the regulator’s website and plug your VIN into its recall search tool.
