Mar 24, 2020
Project Apollo: Ford, GE, and 3M lead America’s corporate mobilization war on COVID-19 Read More Corporate America puts on its war cape... In World War II, Ford produced B-24 bombers to help the war effort. Today we're fighting a very different battle against an invisible foe: COVID-19. Now, Ford and its corporate peers are stepping up to try and provide the "weapons" we need to virus-fight.
Doctors and nurses need to be healthy to treat and help sick people. To protect them, we need filtering masks and respirators — but there's a serious shortage.
To treat really sick people having trouble breathing, we need ventilators — but there's a more massive shortage of those. NY has just 7K of the 30K ventilators it expects needing to treat a surge in hospitalized patients.
Reducing the supply gap... American corporations are teaming up to help slash the shortage for respirators and ventilators:
3M and Ford will produce a new Powered Air-Purifying Respirator to protect healthcare workers from the virus. They'll also boost production of 3M's current respirator product.
Fiat will produce up to 1M masks to donate to emergency personnel, while Ford is creating disposable respirators from 3D printers (could produce at least 1K/month once approved).
Ford is working with GE to boost production of GE Healthcare ventilators, while GM will team up with Ventec Life Systems to majorly increase ventilator production.
PS: Ford's calling this "Project Apollo", because the Apollo 13 mission had to build ventilators in a life-or-death emergency (kind similar to right now).The Takeaway:The Defense Production Act is the next step... The DPA gives the federal government power to force and incentivize businesses to produce goods required for national defense. The White House used the DPA for the 1st time during the COVID-19 pandemic yesterday, to get 60K testing kits. Despite corporate America's voluntary efforts, we might need a lot more DPA-usage to get the ventilators and respirators we need. Jan 28, 2020
GM was set on divorcing Detroit — now it's renewing its vows in an electric way Read More Turn me on with your electric wheel... (or lack thereof). General Motors will build its new self-driving robotaxi ("Origin") in Detroit. Surprised? GM's Detroit-Hamtramck (not a typo) plant is the auto giant's last remaining Detroit factory. GM was actually going to close it down. Then, in October, it changed course after workers at its US factories went on a 40-day strike (remember?).
Time to invest in your hometown again... Here's GM's plan:
Cash: GM's dropping $2.2B on the Detroit factory site, and $800M on nearby projects.
Jobs: Since the plant is no longer closing, people won't lose their jobs. GM's new investment in Detroit combined with Fiat Chrysler's new factory there — which is currently being built — are expected to create 9K jobs. Ford is based in neighboring Dearborn, but is building a self-driving tech hub in Detroit's Corktown.
Potential: GM has chosen Detroit as the hub of its electric, driverless future. That's right — Detroit is where GM's robo-taxis, electric trucks, and potentially a rumored electric Hummer will be born.The Takeaway:Employees saved GM Detroit... Detroit (aka the "Motor City") is Earth's historic car-making hub. It's where Ford introduced moving assembly lines for car manufacturing in 1913. 100 years later, Detroit filed for bankruptcy with the highest unemployment rate of any major American city. GM's investment in its last Detroit plant is both a symbolic and economic win for the city, made possible by GM's unionized employees, who reversed GM's plans via strike. Jan 8, 2020
Tesla just became the most valuable US car company. Ever. Read More As you Musk know... Tesla shares hit full speed lately — they're up 38% in just the last month. Now Tesla's officially become the most valuable American car company in history. Here's how that value got calculated:
"Market Capitalization": A company's stock price multiplied by the total number of shares. It's the total value of a company based on its stock price.
Production just started at Tesla's new Chinese Gigafactory — and China bought nearly 3 times as many electric cars as the US did in 2018.
That's why Tesla's market cap has risen to $85B — beating Ford's $81B record from '99.
Today, GM and Ford's market cap is $87B — combined.
Here's the crazy thing... Tesla's 2019 profits and car deliveries pale in comparison to GM and Ford's:
Cars produced per year: GM and Ford produced a combined 39x as many cars as Tesla did in 2019 (14.3M vs. 367.5K).
Profits over the past year: Tesla's profit was -$827M (negative, AKA a big loss). GM and Ford's combined profit was over $10B (AKA actual money-making).
The Takeaway:Investors care less about today, more about tomorrow... Stocks can rise as shareholders believe a company's profits will grow in the years to come. Tesla's cars scream "future" (electric + cyber), while Ford and GM's preach the past (trucks/SUVs + gas). Investors think 17-year-old Tesla has better profit potential than 112-year-old GM and its even older Ford brother. Jan 1, 2020
Is 2020 the Year of the Electric Car? Tesla, VW, and Ford say yes (Honda disagrees) Read More Turn me on with your electric wheel... Mother Earth isn't a fan of burning gas — So is 2020 the year we switch to something else? The verdict is: a (strong) maybe. Carmakers spent the final week of 2019 humblebragging their future-focused electrification accomplishments.
Ford announced it's sold out of pre-orders for the first electric car it's actually serious about: Mustang Mach-E (this ain't no "compliance car").
Tesla just delivered its first 15 models produced in China, capping an insane under 1 year start-to-finish construction of its car-pumping Shanghai Gigafactory.
VW can't contain its e-citement, so it's accelerated its goal to produce 1M fully electric cars by 2023 instead of 2025.
Honda isn't convinced... The Boston Red Sox to Toyota's Yankees, Honda's experience with electric goes back to '99 (remember that salamander-looking Insight?). So its CEO is qualified to say he's "not sure" the world wants full-electric cars yet. Instead, Honda's focused on improving fuel efficiency with ybrid tech and won't go full electric "anytime soon."The Takeaway:Electric's 2 biggest issues = Price + Battery... If you haven't bought an electric car, it's probably because they're too expensive or you're nervous about running out of juice mid-ride (aka "range anxiety"). Carmakers know that — here are some ways they're trying to fix it:
Price problem: Analysts think e-cars won't be price-competitive until 2024-ish when battery prices fall more. Meantime, Tesla's China plant can produce cheaper, and tariff-free, for Chinese buyers.
Battery problem: Ford's Mach-E boasts a 300-mile option that 80% of pre-orders include. And VW is building a nationwide charging network so you can plug in mid-bathroom pitstop. Dec 23, 2019
Rivian's massive 4th fundraise of 2019 could make electric trucks mainstream (with help from Amazon) Read More “Cute Tesla”... (new bumper sticker for Rivian drivers). The electric pickup truck startup snagged $1.3B in fresh money from T. Rowe Price and existing investors like Ford and Amazon. That cash will facelift an old Mitsubishi plant in Normal, Illinois (great name) to start mass-ish producing e-pickups in 2021. Here's America's State of the Car (and their value by market capitalization):
Detroit's Big 3: GM ($53B), Ford ($37B), Fiat-Chrysler ($29B — FYI, Chrysler merged with Fiat in 2009... and is mega-merging with Peugeot right now).
Electric's Big 2: Tesla ($72B) and Rivian (somewhere between $5B-$7B — it's still private, so we don't know its valuation for sure).
Cars cost more than coders... App-based tech startups raise tens or hundreds of millions of dollars to hire programers and install kombucha taps. But Rivian raises money in the billions to build factories, fill them with high-tech robots, and hire engineers. All those costs are why fundraising for hardware cars is bigger than for software tech.The Takeaway:You want traction? I’ll show you truction... Venture capitalists, Ford, and Amazon had invested a huge $2.2B in Rivian already. To get this extra $1.3B, Rivian probably had to show them some traction — evidence that it's worth investing more into. How about this truction:
Amazon announced an order in September for 100K Rivian electric delivery vans — Bezos needs them to achieve Amazon’s “Climate Pledge.”
Those will be delivered from 2021-2030 — they'll become both steady revenues and rolling billboards for Rivian as Amazon delivers packages nationwide. Dec 23, 2019
Rivian's massive 4th fundraise of 2019 could make electric trucks mainstream (with help from Amazon) Read More “Cute Tesla”... (new bumper sticker for Rivian drivers). The electric pickup truck startup snagged $1.3B in fresh money from T. Rowe Price and existing investors like Ford and Amazon. That cash will facelift an old Mitsubishi plant in Normal, Illinois (great name) to start mass-ish producing e-pickups in 2021. Here's America's State of the Car (and their value by market capitalization):
Detroit's Big 3: GM ($53B), Ford ($37B), Fiat-Chrysler ($29B — FYI, Chrysler merged with Fiat in 2009... and is mega-merging with Peugeot right now).
Electric's Big 2: Tesla ($72B) and Rivian (somewhere between $5B-$7B — it's still private, so we don't know its valuation for sure).
Cars cost more than coders... App-based tech startups raise tens or hundreds of millions of dollars to hire programers and install kombucha taps. But Rivian raises money in the billions to build factories, fill them with high-tech robots, and hire engineers. All those costs are why fundraising for hardware cars is bigger than for software tech.The Takeaway:You want traction? I’ll show you truction... Venture capitalists, Ford, and Amazon had invested a huge $2.2B in Rivian already. To get this extra $1.3B, Rivian probably had to show them some traction — evidence that it's worth investing more into. How about this truction:
Amazon announced an order in September for 100K Rivian electric delivery vans — Bezos needs them to achieve Amazon’s “Climate Pledge.”
Those will be delivered from 2021-2030 — they'll become both steady revenues and rolling billboards for Rivian as Amazon delivers packages nationwide. Nov 22, 2019
Tesla unveils (and starts taking pre-orders for) a rad-looking "Cybertruck" Read More It's a trapezoid... Just days after Ford unveiled its Mustang e-SUV, Tesla hit Detroit below the belt with its first pickup truck. "Cybertruck" was unveiled last night by a proud Elon Musk. Starting at $39,900, it looks like a senior graphic design student's art project.
Blade Runner (2049)... Elon claims Cybertruck's design was inspired by the 1982 Harrison Ford flick that took place in a dust-filled futuristic November 2019. But we're wondering if it'll even see the streets by 2049. Tesla's Model Y crossover still isn't available and there's even more than that in the backlog.
The Tesla Roadster: Unveiled November 2017 with an insane 1.9-second 0-60 mph acceleration — still not available for sale.
The Tesla Semi: The tractor trailer looks Terminator-villain inspired, unveiled November 2017 — still not available for sale.
The Tesla Cybertruck: Unveiled November 2019. Available late 2021 (allegedly). But Elon claims its "exoskeleton" is bulletproof."The Takeaway:Pickup trucks are like diamond rings... the more you spend on them, the more you'll brag about them. Other Teslas look sporty, this looks spooky — and it's aiming for sales from pickup truck buyers who may go function-over-fashion. But if they come around, Elon could mess with Ford, General Motors, and Fiat Chrysler's profit puppies: pickup trucks. Nov 19, 2019
Ford's new Mustang Mach-E electric SUV isn't just a "compliance car" Read More Biggest product unveil since the Model T... Ford needed something big. So it hired a former Michigan Wolverine football player to be CEO. That's when Jim Hackett ordered designers to build an electric SUV inspired by its iconic Mustang sports car. On Sunday, Ford unveiled that Mustang Mach-E. Shares barely budged because electric cars are just a rounding error for Ford, but this signals a new focus on electric.
Don't call it a "compliance car"... Don't. Car companies that didn't completely embrace electric (that's everyone except Tesla and maybe Toyota/Nissan/Honda) still offered electric or hybrid cars — but those were "compliance cars":
You love profiting off SUVs and pickup trucks, which get bad gas mileage.
But the government requires that you hit minimum fuel efficiency standards for your whole vehicle fleet.
So you build compliance cars — electric or hybrid cars with incredible (or infinite) miles per gallon.
Picture this: It's like the table full of Sprite, Dr. Pepper, and fruit punch in the corner at a sophomore party. School rules require just as much alcohol as non-alcoholic.
But the Mustang Mach-E is built to compete, not comply.The Takeaway:Competition in Elon's mirror is closer than it appears... Tesla's first "everyman" electric car kinda has a rival in the low-ish priced Mach-E. Ford's starts at about $44K, which falls to $37K after a federal tax credit — that's about the same price as Tesla's lowest priced Model 3. Plus, the Mach-E is 100% SUV, which Americans always call shotgun on. Nov 15, 2019
3 car companies drop major electric car announcements: Tesla, Daimler, Ford Read More Objects in rearview mirror don't matter anymore... 2 historic car companies made big announcements yesterday:
Daimler owns Mercedes-Benz, which invented the modern engine in the 1880s in Mannheim, Germany. Daimler hasn't transitioned well into the modern era — now it's laying off 10% of workers to save cash so it can invest in hybrid and all-electric models.
Ford's just as historic, but doesn't include the 6-disc CD changer and leather interior. It just confirmed the name of its hyped Mustang-inspired electric SUV: "Mustang Mach-E" — Ford starts taking reservations Sunday after its Los Angeles unveiling.
"I've been doing this for 16 years"... Palo Alto-based Tesla already boasts hundreds of thousands of e-cars on the road — Elon predicted that electric is the future, even if they're only 1.2% of US car sales today. Daimler is forced to go electric because of Europe's environmental regulations, while Ford merged its love of SUVs and Mustangs with cleaner emissions requirements.The Takeaway:Yes, Tesla's 1st-mover advantage is still there... Most car brands have realized that sticking an "e" on their vehicles is the key to the future. That's meant more competition for Tesla, fast. But making an electric car that goes 200+ miles on 1 charge is hard. And Tesla's long track record just got recognized by a top critic:
Tesla achieved "Recommendation" status from Consumer Reports for its Model S and Model 3, about a year after losing the coveted stick-it-up-on-the-fridge accolade. Oct 22, 2019
Ford struggles with its botched 2020 Explorer launch Read More One of the profit puppies is sick... Ford makes nearly all its profit from SUVs and pickup trucks in North America. So when you're rolling out your first redesigned Explorer SUV (aka its best-selling SUV ever) in 10 years, you put top people on it. But Bloomberg now reports that the revamp was botched. And putting this thing in reverse is expen$ive.
This road trip is fun for nobody... Ford invested $1B to equip its Chicago assembly line with the right conveyor belts, hammers, heavy duty tools, and mojo needed to put a 7-passenger aluminum box on wheels together. The whole situation is now carsick.
Defects: Details on what was wrong with the vehicles isn't totally clear, but the digital gauges that show the MPH and gallons of gas are reportedly glitchy.
The fix: Some cars were already sent to dealerships and need to be hauled back.
The root cause: The workplace environment sounds downright abusive, according to Bloomberg: "Roving groups of workers are intimidating other employees, creating a hostile environment."The Takeaway:Waiting until the news is official is often too late... Ford reports its quarterly earnings on Wednesday, and the CEO will probably be asked to explore this Explorer snafu. But plenty of investors on Wall Street have already acted by selling out of the stock — it's down 11% in the past 3 months. Oct 18, 2019
Ford partners with Amazon & VW to tackle electric's biggest problem: charging stations Read More Corporate codenames are sweet... "Team Edison" is the group of Fordies trying to take America's oldest car company into the future with electric. They've been busy:
Last year, Ford committed $11B to electric car development, pledging to sell a majority of electric cars by the end of 2022 (bold goal considering it's mostly gas-powered F-150 trucks now).
Next month it's unveiling a Mustang-inspired electric SUV (our hearts are RPM-ing with excitement).
Yesterday it introduced North America's largest electric vehicle charging network (more on that below).
Nana lives 250 miles away... and your e-car only has battery for 200. That's one of the main concerns of would-be electric car buyers, according to Ford. Range anxiety. So it's giving Ford drivers a ton of new charging stations to soothe the worries.
The network: 12K charging stations and 35K charge plugs.
The pass: FordPass is an app that shows drivers the many places they can charge up in the network.
The price: Free for 2 years. After that you'll have to pay up to fill up.The Takeaway:Ford's not a company, it's a modern family... To survive against tech-endowed Tesla and catch up in the race for electrification, it's partnering up — hard. Most of this charging network is handled by others:
Volkswagen's subsidiary "Electrify America" will build out thousands of the public charging stations for FordPass members.
Amazon is side-hustling to install home-charging setups for electric cars, and Ford's collaborating. Sep 10, 2019
Ford's bonds reach a low blow: Junk status Read More An $11B makeover... Ford wants one. It's all part of the car company's aggressive turnaround plan to become more sexy, electric, and self-driving. So to pay for the new look, Ford issues billions in IOUs (bonds). Before you invest in bonds, a credit ratings agency jumps in:
Ratings agencies evaluate the likelihood a bond-issuer (like Ford) will pay you back.
Based on the company's financial health, the ratings agency sticks a rating on it.
AAA, AA, A, BBB — Anything BB or lower is considered "junk." Ford just got downgraded to that.
Ford was created in 1903... But this situation goes back to 2009. The Big 3 Detroit car companies needed a bailout — except Ford. It even gave its blue oval logo as collateral for a loan to stay bailout-free. Since surviving the car-pocalypse, Ford's bonds have been rated "investment grade." Then it fell behind rival GM's innovation and Ford is now worth less than Tesla. Junk happens.The Takeaway:"Junk" makes almost everything Ford does more expensive... Even though Ford's enjoying huge profits ($22B over the past four years), the credit ratings agencies are worried about where Ford will be 10 years from now. Because of this downgrade, investors will demand a higher interest rate from Ford because its debt is considered riskier. Aug 13, 2019
The car industry begins going all-in on electric, phasing out hybrids Read More Can I borrow your car charger?... GM and Volkswagen are ditching the hybrid technology that Toyota made famous with the Prius back in the 90s. Here's a cheat sheet on conventional vs. hybrid vs. electric as they go long on plug-ins.
Conventional: An engine burns gasoline, which pumps pistons up and down, which spins your wheels (we skipped over some physics and engineering).
Electric: A battery powers a motor which vrooms you forward. The downside — pricey batteries make e-cars $6K-10K more expensive than conventional ones on average (but tax incentives and gas savings make up for some/all of that).
Hybrid: A little bit of both. Drivers want to help Mother Earth, but crave the warm-fuzzy feeling of an engine. Hybrid tech costs about $2K extra compared to a conventional car.
Hybrid upped America's MPG... but barely. According to the WSJ, the carmakers are realizing hybrid isn't cutting greenhouse gases enough for the future, especially with Europe and China's aggressive environmental plans. Ford, Volvo, and Toyota though are sticking to hybrid because some customers aren't ready to go cold turkey with regular unleaded.The Takeaway:Companies can only make so many bets... A car CEO has a ridiculous menu of expensive things she could invest in — autonomous driving, car sharing, pickup trucks, hybrids, and electric. Each buck spent on hybrid tech is a buck not spent on those other things. More car bosses believe hybrid's era is coming to a close soon. 
