Down To Business

Cruise calls for a full stop, Hertz and Ford back off EVs, Tesla reverses course on price cuts.
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Down To Business

GM's Cruise License Revoked:

  • What happened? We wrote recently about how California suspended Cruise's driverless operations license after an accident where the company's autonomous car dragged an injured pedestrian.
  • Why? Cruise misrepresented the accident details.
  • Current Status? Cruise is reviewing procedures and is now using safety drivers.

Hertz Scales Back on EVs:

  • What happened? Hertz reduces its electric car plans due to high EV repair costs and Tesla's price drops impacting resale value.
  • Numbers: Hertz owns 35,000 Teslas, not the 100,000 projected for the end of 2022. Hertz shares fell 10% and Tesla's by 3%.
  • CEO Statement: Stephen Scherr cited EV repair costs and market value drops for lower Q3 margins.

Ford's EV Losses Grow:

  • What happened? Ford's shares fell 12% due to rising losses in its EV division, driven partly by Tesla's price cuts.
  • Other Concerns: Ford retracted its 2023 outlook over potential higher labor costs with the UAW union and reduced EV investments.
  • 2nd thoughts: Saying US consumers are unwilling to pay premium prices, the brand is postponing about $12B in EV manufacturing plans, including a 2nd battery plant in Kentucky.
  • Numbers: Ford's EV segment had a quarterly loss of $1.33 billion.

Tesla's Model Y Price Increase:

  • What happened? Tesla raised the Model Y Long Range price by $500 to $48,990.
  • Why? Indicates stronger demand for the SUV.
  • Note: This follows Tesla's price cuts for the Model 3 and Model Y earlier in the month. Prices are also adjusted in China.

TL;DR: Cruise cars got a time-out, Hertz isn't feeling the electric buzz as expected, Ford's EVs seem to be short-circuiting, and Tesla's Model Y is now a hot (and slightly pricier) ticket!

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