Tesla Stock Down 40 Percent Over Last Year, Wiping Away $312 Billion In Market Cap

Good morning! It’s Friday, April 19, 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’s Stock Is In Freefall

It has been an absolutely dismal year for Tesla’s stock price and market cap. So far, the stock is down just about 40 percent, which comes out to a loss of $98.49 per share. Those numbers also represent over $312 billion in market cap being wiped completely away.

The stock is sitting at $148.90 and Tesla’s market cap is at $477.5 billion. It’s the lowest share price in just about 15 months, and now Deutsche Bank is raising the alarm following the Austin, Texas-based automaker’s increasing focus on some sort of Robotaxi. The brokerage firm downgraded the stock to “Hold” and cut its price target from $189 to just $123. From Reuters:

The brokerage’s commentary follows Reuters report earlier this month that Tesla decided to cancel its long-promised inexpensive car that investors hoped would drive growth, while continuing to develop Robotaxis on the same vehicle platform.

Tesla has been pushing for greater adoption of its full self-driving advanced driver assistance software ahead of unveiling Robotaxi in August.

The brokerage said cracking the code on full driverless autonomy represents a significant technological, regulatory and operational challenge.

“The delay of Model 2 efforts creates the risk of no new vehicle in Tesla’s consumer lineup for the foreseeable future, which would put downward pressure on its volume and pricing for many more years,” Deutsche Bank analyst Emmanuel Rosner said.

As profitability takes a hit from price cuts to boost demand for its electric vehicles, Tesla earlier this week laid off more than 10% of its global workforce even as it continues to try to revive Musk’s huge pay deal from 2018.

The company has asked its shareholders to reaffirm their approval of Musk’s $56 billion pay that was set in 2018, but was rejected by a Delaware judge in January.

I guess there is a bit of a silver lining to all of this. Tesla is still the most valuable automaker in the world by market cap, besting the likes of Toyota, Porsche, Mercedes-Benz and BYD. Overall, it’s the 16th most valuable company in the world, but I wouldn’t expect that standing to be true much longer.

Please note all of these numbers are as of 9:50 a.m. EST.

2nd Gear: Nissan Not Optimistic About This Year

Nissan is slashing its full-year earnings outlook because of slow business in China and sluggish sales overall. From Automotive News:

CEO Makoto Uchida, who just unveiled a new mid-term plan focused on shoring up profitability, said the slipping volume and “cost relief” for suppliers undermined Nissan’s business trajectory.

“Were we overoptimistic?” Uchida said during a snap news conference to explain the Japanese automaker’s latest sales downgrade. “Yes, it’s true we did not reach what we anticipated.”

In plotting Nissan’s new three-year midterm plan, which is called The Arc and was unveiled late last month, product planners realized some of the company’s sales goals were a bit too rosy.

So, that not only means sales are down from previous expectations. It also means Nissan is going to pay off suppliers who built their own business plans around forecasts for stronger volume. It’s an awfully nice thing for Nissan to do, I suppose, but damn, that’s going to cost a pretty penny.

“We charted sales plans for each model and found out some models have difficulty reaching sales expectations,” Uchida said of the company’s profit warning.

“Suppliers have been making investments based on the assumptions we gave, and the volume decline is our fault. So, to reduce this burden on suppliers, we are making an additional booking.”

Uchida cut Nissan’s global sales expectations to 3.44 million vehicles for the just-end fiscal year that ends on March 31, down from the automaker’s earlier target of 3.55 million vehicles.

The new goal represents a moderate 4.1 percent increase over the 3.31 million vehicles Nissan sold in the previous fiscal year that ended March 31, 2023.

The adjustment marks Nissan’s second sales downgrade of the fiscal year. Nissan had earlier expected worldwide sales would register 3.7 million vehicles, before trimming it to 3.55 million.

Nissan is also expecting a $3.43 billion operating profit for the fiscal year. That sure sounds healthy, but it’s actually down from an earlier forecast of about $4.01 billion. However, it’s still a 40.5 percent jump over the past fiscal year. It’s so hard to make the shareholders happy, man.

3rd Gear: GM Tries Out Hydrogen As Diesel Alternative

This year, General Motors is planning to supply its first medium-duty trucks powered by hydrogen fuel cells to a utility company in Georgia as part of a federally funded demonstration project. From Automotive News:

The pilot vehicle going to electric and gas utility Southern Co. will incorporate the body and frame of a 2024 Chevrolet Silverado 5500 medium-duty truck and GM’s Hydrotec fuel cell systems. The truck will have a GM-estimated range of more than 300 miles and a gross vehicle weight rating of 19,500 pounds.

The medium-duty truck will be capable of generating more than 300 kilowatts of power that can be used as off-board power on job sites or for electric vehicles when traditional charging is unavailable, GM says.

“Just to put this into perspective, 300 kilowatts is enough power to power up to 250 American homes,” Jacob Lozier, a GM program engineering manager working on the SuperTruck 3 program, said at the SAE World Congress here on Wednesday. A truck for freight applications also will be deployed later this year with an as-yet-undisclosed company partner, he said.

The five-year project, funded through the U.S. Department of Energy’s $65 million SuperTruck 3 program, will deploy hydrogen technology in a work vehicle and explore the creation of a microgrid that can support hydrogen fueling and storage. GM will work with Southern Co. to deploy the hydrogen-powered truck and with Southern Co. and Nel Hydrogen US on the microgrid project.

GM says it sees hydrogen fuel cells as a possible replacement for diesel engines, particularly in heavy-duty commercial vehicles that need to carry large payloads and refuel fast. The company is collaborating with Autocar Industries to place hydrogen fuel cells in such vehicles as concrete mixers and roll-off trucks starting in 2026, as well as with Japanese heavy-equipment manufacturer Komatsu on a hydrogen fuel cell mining vehicle prototype. GM and Nel also are working to advance industrial production of Nel’s proton exchange membrane electrolyzer, which uses water and electricity to produce hydrogen and oxygen.

This isn’t The General’s only hydrogen project. Back in January of this year, it teamed up with Honda to start producing hydrogen fuel cell systems at a joint-venture factory near Detroit.

Hydrogen seems like such a smart and good idea on the surface, maybe these projects are the ones to finally get it off the ground.

*Narrator: “They were not.”*

4th Gear: UAW Sets Election Date For MB Alabama Plants

Mercedes-Benz workers in Alabama will get to vote on whether or not they join the United Auto Workers union. Both the automaker and the UAW stipulated to an election agreement, and it’s now set for May 13-17 and Mercedes-Benz plants in Vance and Woodstock, Alabama. Exciting times for organized labor, baby. From the Detroit Free Press:

The agreement, which means there will be no pre-election hearing, allows all full-time and regular part-time production and maintenance employees at the two plants to vote. It excludes all workers employed by contractors and/or temporary agencies, student workers, professional employees, guards, managers and supervisors, according to the email.

The vote comes after what was said to be a supermajority of Mercedes-Benz employees at the plants filed a petition earlier this month with the board’s Region 10 office in Atlanta seeking to represent about 5,200 production workers.

The election will come less than a month after the closely watched UAW election unfolding at Volkswagen in Chattanooga, Tennessee. Workers at VW on Thursday were in the second day of voting there. A victory by the union in that contest would mark the biggest organizing win by the UAW in decades, coming in the U.S. South.

Organizing drives in the past have met stiff resistance from regional politicians, which was on display again this week with a statement signed by the governors of Alabama, Georgia, Mississippi, South Carolina, Tennessee and Texas.

The statement warned that auto companies might rethink their investments in those states if workers choose the UAW.

“We want to keep good paying jobs and continue to grow the American auto manufacturing sector here. A successful unionization drive will stop this growth in its tracks, to the detriment of American workers,” the statement said.

It’s not just for monetary reasons, either. Many workers also voiced their support of the UAW’s campaign because of safety concerns on the production line.

The UAW has accused Mercedes-Benz of running an aggressive anti-union campaign, which the automaker has denied.

Solidarity forever, babe.

Reverse: USA BABY, WE’RE NUMBER ONE

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