More Automotive Antics

News drove several auto stocks today, so let’s review. 👇

First, let’s start with GM-owned Cruise, which is experiencing a lot of trouble in the autonomous driving market. The California Department of Motor Vehicles (DMV) recently suspended its driverless permits over several issues. That caused the company to suspend all driverless taxi operations and pause production of its vehicles. 🛑

Additionally, reporters continue investigating the company’s safety record and “self-driving” claims. The Intercept reported that Cruise kept its vehicles on the roads despite knowing they had problems recognizing children. It also referenced that robotaxis aren’t really fully autonomous, given they require human assistance every four to five miles.

That claim references Hacker News, which targeted the company’s self-driving claims, noting that Cruise vehicles allegedly rely on human operators to achieve. In response, Cruise’s CEO wrote, “Cruise AVs are being remotely assisted (RA) 2%-4% of the time on average, in complex urban environments. This is low enough already that there isn’t a huge cost benefit to optimizing much further, especially given how useful it is to have humans review things in certain situations.” 🤔

Overall, autonomous vehicles are facing several regulatory and trust issues. Although massive investments have been made in the space, it appears that the mass adoption of fully autonomous driving is still a long way off. $GM shares remain under pressure due to this, along with broader issues in the automobile market (like electric vehicle pricing and labor costs). 

Next, Stellantis’ 2025 Ram Ramcharger is an electric truck that gets its power from a gas-powered generator. The company wants this new vehicle to be viewed as a “battery electric truck,” having a 92-kilowatt-hour battery pack with 145 miles of range. It also has a 3.6-liter V6 engine onboard a 130-kilowatt generator, which gives the truck a targeted range of 690 miles. Given the recent hiccups in the pure electric vehicle market, automakers are getting more creative in the offerings they develop and market to U.S. consumers. 🔋

Moving onto earnings, Rivian is up marginally after the bell. The electric adventure vehicle manufacturer posted a narrower-than-expected quarterly loss of $1.19 per share on $1.34 billion in revenues. Analysts had expected a loss of $1.34 per share on $1.32 billion in revenues. 🔺

The company delivered 15,564 vehicles during its last quarter, with minimal regulatory credit sales impacting revenue. It continues to ramp up production, raising its production guidance for the current year from 52,000 to 54,000 vehicles. It’s also reduced its full-year capital expenditures forecast to $1.1 billion as it looks to preserve cash following a $1.5 billion convertible debt offering last month. Lastly, its exclusivity agreement with Amazon will end earlier than anticipated, allowing the company to diversify its customer base. 

On the other hand, luxury electric vehicle maker Lucid is falling 5% after cutting its full-year production outlook. It now expects to produce 8,000 to 8,500 cars, down from its previous forecast of 10,000 (and 12,000 to start the year). That said, its third-quarter loss per share of $0.28 was $0.12 better than expected. However, its sales of $138 million lagged estimates of $178 million as it continues to struggle with slowing EV demand. 🔻

With production slowing to align more adequately with expected demand, investors want to see its cash management improve. The company used $707 million during the quarter, better than last quarter’s $900 million and the $890 million anticipated by analysts. With the high-end EV market expected to remain challenging, the stock is falling back toward its all-time lows set last month. 📉

March Madness Continues At NYCB

When regular people talk about March Madness, they’re referring to college basketball. But when traders and investors talk about March Madness, they’re referring to a regional bank stock imploding.

We’re about a year out from three regional banks failing and/or being rescued, and now the sharks are circling New York Community Bancorp. The long story short, until today, is that the regional lender has too much commercial real estate exposure, weak internal controls over financial reporting, and a new CEO trying to right the ship. 🗞️

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Thailand Scores Major EV Win

Thailand has been helping lead the electric vehicle (EV) push, with the second-biggest economy in Southeast Asia looking to achieve carbon neutrality by 2050. ♻️

The country is known as the “Detroit of Asia,” serving as a major manufacturing hub. As part of that, it’s looking to make 30% of its car output electric by 2030 so that it doesn’t lose its leadership position in the EV transition. Its government is putting up major funds to help fund that, approving $970 million in tax cuts and subsidies to help encourage demand and boost local production. ⚡

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Trouble Continues For Telecoms

We last talked about Telecom stocks about six months ago, when their stocks came under significant pressure due to slowing growth, competition concerns, and regulatory issues. We then discussed them in October when investors dumped defensive stocks for higher-yielding treasuries with no risk.

Prices have since rebounded sharply with the broader market as investors priced in Fed rate cuts this year. However, Verizon was back in the news today for a not-so-great reason. Let’s dig in. 👇

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Japan’s Nippon Takes Over U.S. Steel

After months of bidding, U.S. Steel finally has a buyer. However, the auction’s winner has some parties concerned. 🤔

Japan’s Nippon Steel emerged as the top bidder for the 122-year-old steelmaker, beating out offers from Cleveland-Cliffs, ArcelorMittal, and Nucor. Its $55 per share price represents a 142% premium to where $X shares were trading before Cleveland-Cliffs’ $35-per-share offer kicked off the bidding war.

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