Businesses Making Moves
Used car market takes a dip, Louisville Ford workers vote "nay," Hyundai expands EV production, Exxon Mobile get into lithium, and Tesla's new rules.
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Used Car Market Downturn
- Cox Automotive's Manheim Used Vehicle Value Index: Lowest since April 2021.
- Wholesale Prices: Dropped 2.3% from September; 4% YOY decline.
- Impacts: Decreased demand, higher borrowing rates.
- Borrowing rates nearly doubled since February 2022.
- Key Factor: End of UAW strike, return to market normalcy.
In October, the used car market experienced a significant downturn which fell to its lowest point since April 2021. This trend is expected to impact retail prices soon. Factors contributing to this include decreased demand and increased borrowing rates, which have nearly doubled since February 2022, exacerbating consumer affordability issues.
Notably, this marks the largest drawdown in the index's history, potentially leading to a crisis for consumers who purchased cars during the Covid peak.
Louisville Ford Workers Reject Contract
- Contract Terms: Immediate 11% raises, growing to 25% over four years.
- Local Vote: 55% production workers against, 69% skilled trades in favor.
- Discontent: Long-time workers feel under-compensated for past concessions.
Louisville Ford workers, part of UAW Local 862, voted against a proposed contract, diverging from the national trend where about 70% of Ford workers have approved it. The impact of this vote on the national outcome remains unclear.
Hyundai's EV Production Expansion
- New Factory: $1.5B EV plant in South Korea.
- Capacity: 200,000 cars annually.
- Sustainability Focus: Renewable energy, low carbon construction.
- Global Expansion: Additional EV plants in the US and Saudi Arabia.
- Market Strategy: Commitment to long-term EV market growth.
Hyundai is expanding its EV production capabilities, breaking ground on a new $1.5B EV factory in South Korea marking Hyundai's first new plant in Korea in almost 30 years. With a focus on sustainability, the factory will operate on renewable energy and employ low-carbon construction methods.
Exxon Mobil Enters Lithium Production
- New Venture: Drilling operation in Arkansas for EV lithium production.
- Land Acquisition: 120,000 acres in the Smackover Formation.
- Production Goals: Start by 2027 and support one million EVs annually by 2030.
- Strategic Shift: Focus on minerals for energy transition, addressing climate change.
Exxon Mobil is venturing into lithium production for EVs by setting up a drilling operation in Arkansas. It aims to support the manufacture of one million EVs annually by 2030.
Tesla's Cybertruck Resale Restrictions
- New Clause: Prohibits resale within the first year without Tesla's consent.
- Penalties: Possible lawsuit, fine of $50,000 or more.
- Aim: Prevent profiteering from limited initial release.
- Exceptions: Under strict conditions, including possible buyback.
Tesla is cracking down on potentially reselling its upcoming Cybertruck by implementing a new clause in its purchase agreement. Buyers are prohibited from selling their Cybertruck within the first year without Tesla's written consent, facing a possible lawsuit and a fine of $50,000 or more if they breach the terms.