Good morning! It’s Wednesday, July 3, 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: The Winners And Losers In U.S. Car Sales
America’s automakers are out shouting about their latest sales figures this week after the second quarter of the year drew to a close last weekend. Sales of light vehicles across America dipped by a single percent during the three-month period as a computer outage hit America’s dealerships’ ability to sell cars.
Despite the stagnant sales across the country, some automakers came through the period better than others, with a report from Automotive News highlighting performances from GM, Honda, Subaru and Mazda, which all posted sales increases for the quarter. Fortunes were less rosy for the likes of Toyota, Stellantis, Hyundai, Kia and Nissan, however, which all posted a drop in deliveries over the three-month period. As Automotive News explains:
The U.S. new-car market lost some momentum in the second quarter as affordability, elevated prices and higher borrowing costs continued to weigh on consumers, even as dealers scrambled to salvage sales when key software was knocked offline by a coordinated cyberattack.
General Motors, behind higher demand for large trucks and electric vehicles, posted a slight increase in second-quarter U.S. sales. GM and other automakers said some deliveries may be delayed or recorded in the third quarter in the wake of the late June cyberattacks at CDK Global that upended results late in the month.
The biggest sales for the period were at General Motors, which shifted 691,680 cars in the quarter. This was followed by Toyota, which sold 621,549 cars and Hyundai-Kia, which delivered 438,602 models.
The largest percentage gains for the quarter came from a rather surprising place, however, with Fiat posting triple-digit growth as a result of the launch of its all-electric 500 in the U.S.
Despite a few positive storylines from this quarter’s filings, the mood was tempered by a computer outage that hit dealerships’ ability to sell cars from June 19. As Automotive News adds:
The new-vehicle market, whick rose 5.6 percent in the first quarter, was on track to rise more modestly in June, with the widespread cyberattack at CDK putting a dent in final volume. Many sales will be recorded or made up in July.
The outage, beginning June 19, hampered deliveries during what is typically the industry’s strongest period for new-vehicle sales — the end of a month. Many automakers and dealers are also pitching summer and July 4 holiday promotions to draw traffic and generate sales.
Now, however, things appear to be on the mend and the outage looks set to be a distant memory by the time Q3 sales figures come around in a few months’ time.
2nd Gear: Elon Musk Just Made Another $10 Billion
Tesla has had a rough couple of weeks with its flagship Cybertruck causing all kinds of headaches, sales of its cars slowing and the automaker facing a relentless fight to justify the $56 billion payout it wants to give big boss Elon Musk. Now, despite its struggles, the automaker just made Musk another $10 billion for not really doing anything at all.
Yesterday, Tesla shared its latest sales and delivery figures for the last quarter, which ran until the end of June 2024. In the filings, deliveries were down for the American EV maker and it is now having its lead in EV sales rapidly eaten into. Despite the bad news, sales weren’t quite as low as experts projected, and that sent Tesla stocks into overdrive, reports Forbes. As the site explains:
Tesla shares jumped to just under $229 as of around 11:30 a.m., adding to the company’s nearly 25% rally since the stock price fell below $183 on June 24.
The value of Musk’s roughly 12% stake in the company increased to $160 billion from about $150 billion when the market closed trading Monday, while the weeklong rally has added about $30 billion.
You read that correctly, despite posting a drop in sales of almost five percent compared with last year, Elon Musk made another $10 billion for his work at Tesla. The spike in Tesla’s share price and Musk’s worth came after Tesla beat analysts expectations for the quarter, in which it was projected to sell around 439,000 cars.
However, Tesla did marginally better than that, shifting 444,000 vehicles through the second quarter of 2024. The figure equates to a 14.8 percent increase over the brand’s sales in Q1, but marks a 4.8 percent drop year-over-year as it faces stiffer competition from other automakers around the world.
3rd Gear: Dealers Are So Back, Baby
One of the big stories this week has been the impact a computer outage across America has had on car sales after computer services provider CDK Global was hit by a cyberattack in June. The outage meant many dealers were unable to sell cars at the end of the month, but the company now says it’s running ahead of schedule in repairs to its network following the outage.
CDK Global now says that “substantially all” dealers are back online and able to sell cars once again following the cyberattack that took out its systems, reports CNN. This means that almost 15,000 dealerships across America have now had their systems restored after they went down on June 19. As CNN reports:
CDK Global said “substantially all” of the nearly 15,000 car dealerships that use its software across North America are back online to its core management system, almost two weeks since a cyber incident caused a software blackout.
“We are happy to report that we are ahead of the anticipated schedule,” an automated message on CDK’s customer care phone line said.
Auto dealerships use CDK’s software to manage everything from scheduling to records.
The update will be good news for America’s dealerships, which have been struggling to update inventories, process repairs and even sell cars for more than two weeks now. In fact, CNN projects that the outage at CDK could cost as much as $944 million due to business interruptions for dealers across the country.
Those losses could come back to bite CDK Global, which is now facing a barrage of lawsuits from customers and dealer employees as a result of the system outage. The company is now facing as many as eight different lawsuits over the outage, reports Automotive news. As the site explains:
Ten customers from Arkansas, Michigan, Oklahoma and Texas who bought vehicles from CDK Global dealerships joined together to sue the software provider following its June 19 cyberattacks.
Their June 27 complaint in the U.S. Northern District of Illinois joins other federal consumer lawsuits against the dealership management system company. It too seeks class-action status, in this case defining the class as anyone whose information “was actually or potentially accessed or acquired” during the recent CDK incident.
Well, you know what they say: where there’s blame there’s a claim.
4th Gear: Rivian Won’t Make Cars For VW
The world watched with mild interest last month when car making giant Volkswagen announced it was plowing millions into American electric car startup Rivian, which already has big backing from the likes of Amazon. Many thought this meant VW may start using Rivian tech in its cars, or Rivian could even assemble VW models in America to make the most of tax breaks over here.
However, after German media reported that a partnership between Rivian and VW was in the works, the American company has quashed any rumors that it will start building EVs for the German giant, reports Reuters. As the site explains:
German newspaper Handelsblatt reported on Tuesday, citing people familiar with the matter, that an extended partnership might include producing Rivian’s smaller and less expensive R2 SUVs at VW’s South Carolina plant that is currently being built.
“There are no plans for production of vehicles with Volkswagen Group,” a Rivian spokesperson said in an email to Reuters. Volkswagen declined to comment on the media report and said its clear focus was on the JV.
The move followed a $5 billion investment in Rivian from VW, which was announced by the two parties just last week. As part of the deal, it was revealed that the two companies would share electrical architecture and software with one another.
The move follows similar partnerships between EV startups and legacy automakers that have so far seen Aston Martin partner with Lucid and Stellantis take Chinese EV maker Leapmotor under its wing.