Good morning! It’s Tuesday, October 29, 2024. Welcome to The Morning Shift, your daily roundup of the top automotive headlines from around the world. Here are today's important stories: Polestar has raised concerns about the Biden administration's proposed rule barring Chinese vehicle hardware and software, which could severely impact its U.S. operations. Polestar, a Swiss-Chinese automaker, argues that this rule would prevent the sale of its vehicles in the United States, even those manufactured domestically. The company cited that while many of its operations are located outside China, the rule could effectively harm its business, which possesses substantial U.S. investments and employs numerous personnel from friendly nations.
Polestar stresses that the rule's impact on its operations shouldn’t undermine national security objectives. Reuters notes that currently four Chinese-made vehicle models, including the Polestar 2, are sold in the U.S. Additionally, both Ford and General Motors could face restrictions on importing Chinese-produced vehicles. Ford emphasized to the Commerce Department that the rule's focus should be on compliance with software and hardware standards rather than location of vehicle assembly. Ford reported a 26% decline in its third-quarter net income, attributing this drop to a previous charge related to postponing certain electric vehicle plans. This has led Ford to lower its full-year earnings forecast by billions due to cost concerns.
Ford’s CFO, John Lawler, predicted adjusted earnings before taxes and interest at about $10 billion for the year, previously anticipated at $12 billion. Despite cutting costs by $2 billion, inflation and substantial warranty expenses have offset these savings. Ford's EBIT saw a 16% rise during Q3, with revenue increasing 5% to $46 billion. Lawler assured the automaker is on a successful trajectory, yet recognizes the need to manage warranty costs for unlocking further financial potential. CEO Jim Farley acknowledged cost, especially warranties, as the main hindrance to earnings power. Model e, Ford's electric vehicle unit, reported a $1.2 billion loss, albeit an improvement from the previous year.
A United Auto Workers union in Fort Wayne, Indiana, plans to vote on authorizing a strike at a GM truck manufacturing plant. This decision comes as a result of the company allegedly using managers to work assembly lines, which the union claims violates existing contracts. The union accuses GM of using management to replace roles meant for union employees following recent overtime cuts and layoffs. The upcoming vote will empower the union to initiate a strike but does not guarantee one will occur. GM maintains it adheres to its agreements, stating there’s no legal basis for a strike.
Chinese electric vehicle (EV) manufacturers are anticipating a strong end to 2024, thanks to aggressive price wars that have disadvantaged foreign competitors in China’s vast market. Increased subsidies have boosted EV and hybrid sales, contributing to Tesla’s best quarter yet in China. Analysts predict sustained growth for Chinese EV sales, driven by government encouragement for new energy vehicle purchases. While Tesla and other brands may consider price adjustments to achieve sales targets, the current market shows promising trends for Chinese automakers like BYD and Geely, predicted to meet ambitious sales goals.
In summary, the growing tension between U.S. policies and international automakers highlights the complexities of global automotive trade, while domestic giants like Ford and GM navigate operational challenges. Meanwhile, China continues to strengthen its position as a leader in the electric vehicle market.
