Q2 2024

A little news, a little data, some context, an opinion or two, and ta-da, you've got an email.

We grabbed some news about the overall attitude of Q2 for automakers and then dove into the specific brands.

We ALSO saw that some 30% of EV buyers are looking for the exit-hatch back into gas-burning-glory. We're proud of people for trying new things. Like I (Chris) always tell my daughter, "How do you know you don't like spinach if you've never had it?"

I mean, she ends up not liking it, but still, she didn't KNOW until she tried.

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Some Broad Data

Global Auto Industry Challenges
Declining sales and profitability are impacting major automakers worldwide.

U.S. Market Struggles
Excess inventory and competitive pressures have dented profits for Ford, Stellantis, and Nissan.

EV Sales Surge
Despite a rise in EV sales, automakers are cautious and pulling back on growth forecasts.

EV Owner Sentiment
Nearly 30% of global EV owners, and even more in the U.S., consider returning to internal combustion engine vehicles.

Charging Infrastructure Issues
Concerns over charging infrastructure, range, and battery life continue to challenge EV adoption.

Dealer Adaptation
The market could soon get more competitive, but the share of EV compared to ICE may shift in favor of traditional inventory.

Ford

Despite the disappointing results, Ford executives emphasized improvements in product quality and a commitment to reducing costs and complexity. The Model e unit, focused on electric vehicles, reported a loss of $1.1B, while the Ford Blue division, which includes traditional gasoline-powered vehicles, saw a near 50% decline in operating profit. Revenue increased by 6%, with vehicle sales up 2%.

Q2 Performance

• Ford's Q2 shares dropped by 18%, the worst since 2008.

• Adjusted profits were 47 cents per share, below the expected 68 cents.

• Warranty costs surged by $800M, totaling $2.3B for the quarter.

What's Coming Up

Looking ahead, Ford reaffirmed its 2024 guidance, projecting an EBIT of $10-$12B. The company remains optimistic about its long-term prospects, aiming to enhance quality and operational efficiency to regain investor confidence.

Stellantis Q2 Performance

Stellantis reported a 48% decline in global profits for the first half of 2024, with net revenues down 14%. CEO Carlos Tavares cited high inventory and ineffective marketing in North America as key issues. The company is launching 20 new vehicles to drive future growth.

Brand-Specific Q2 Spotlight

• Jeep: Anticipating sales boost from new models.

• Dodge: Introducing the electric Daytona and Hurricane-powered Charger.

• Ram: Launching the refreshed 2025 Ram 1500 with the new Hurricane I-6 engine.

• Chrysler: Focus remains on the Pacifica minivan.

Hyundai Q2 Performance

Hyundai reported a record Q2 profit of $2.9B, up 23% year-on-year, driven by strong U.S. sales of premium SUVs and hybrids.

This exceeded analyst expectations and mitigated concerns over slowing consumer demand affecting rivals like Ford and Nissan.

Hyundai plans to expand its hybrid lineup to address potential changes in U.S. EV policies following the upcoming election.

Despite a 10% slump in domestic sales due to inflation and economic weakness, Hyundai's focus on high-margin models and favorable exchange rates contributed to its robust performance.