Get Ready For The Big Rebound

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New car sales could come back big in the next few years, Hyundai wants 2021 to be a year of “great transformation,” and Nissan. All that and more in The Morning Shift for January 26, 2021.

1st Gear: New Car Sales Will Likely Rebound In The Next Few Years

That’s according to at least one analyst, but it tracks with my broader sense of what’s going on with the car market. When enough people are vaccinated and the economy gets moving again in earnest, there will be a lot of people lined up to buy new cars. There has been an inventory crunch that is expected to last well into 2021 but you would also think that inventory will catch up eventually.

From a Bloomberg wire report that doesn’t appear to be online:

(Bloomberg) — U.S. light-vehicle sales are on track to rebound in the next four years, averaging about 17.2 million units annually through 2025, according to estimates from securities firm Benchmark.

The bullish growth forecast will be powered by “the replacement of the oldest fleet on record and growth from a wave of new drivers coming from the millennial and follow-on generations,” Michael Ward, a Benchmark analyst, wrote in a research note published Monday. Average new-car sales volumes will be higher than the previous records of 17 million units a year between 2016-2020 and the 2001-2005 annual average of 16.9 million, Ward said.


These are broad trends, mind you. For the rest of us, Bring A Trailer will always operate as its own sub-economy.

2nd Gear: Electric Car Charging Is Already A Big Business

A startup called Freewire, which is in the business of EV charging, has raised $50 million in a new funding round, in addition to all the millions that it has raised before. We’re going to see a lot more of this moving forward.

From Bloomberg:

The round was led by energy-focused private equity firm Riverstone Holdings, said FreeWire CEO Arcady Sosinov in an interview Monday. Existing shareholders including the venture arm of BP Plc, Energy Innovation Capital, Trirec and Alumni Ventures Group also participated in the round, Sosinov said.

FreeWire has raised $100 million in total funding to date, including the new round, according to Sosinov. The company’s valuation in the new round couldn’t immediately be learned.

“One of the reasons we placed our bet here is that FreeWire’s technology is more advanced,” said Riverstone partner Robert Tichio, who will join the company’s board. “Its commercial relationships have even further and deeper penetration than almost all of its public comps.”

Six-year-old FreeWire’s products are used to charge EVs and power events and construction sites, its website shows. It plans to have more than 2,500 ultrafast charging stations by 2025.


3rd Gear: Hyundai Is Also Going Big On Electric

Hyundai was rumored to be working with Apple on an electric car recently. With or without Apple, though, it has other plans to push on on electric, after a very big 2020.

From the Financial Times:

Hyundai has earmarked 2021 as “the year of its great transformation” into a future mobility service provider, focusing on developing new technologies for electrification, urban air mobility, robotics and fuel cell systems.

Its goal of selling 160,000 EVs in 2021 follows sales of 100,000 EVs last year driven by strong demand for its Kona electric sport utility vehicle despite the coronavirus pandemic that has ravaged auto demand.

“We aim to cement our position as an EV leader by expanding our line-up and product quality,” Koo Za-yong, Hyundai’s head of investor relations, told analysts on Tuesday. The carmaker had a 5 per cent share of the global EV market last year.

Hyundai, which together with affiliate Kia Motors ranks as the world’s fifth-largest carmaker, is pinning its hopes on its new Ioniq 5 EV — the first model made on its dedicated EV platform that will cut production costs and time. The Ioniq 5 will be rolled out in Europe in late March, followed by South Korea and the US.


Hyundai’s 160,000 EV aspiration is not that big compared to Tesla’s 500,000 from last year, so this is in large part marketing, but I’m excited to be here for when companies even aspire to such things.

4th Gear: Nissan Is Also Going Big On Electric

Nissan has a marque called Venucia in China that I’d never heard of until this morning. It’s using that brand and its own to try and make a dent on electric there as it pursues a broader turnaround plan.


From Reuters:

Nissan Motor is accelerating the rollout of electric vehicles in China under its main brand and its local, no-frills Venucia marque as it overhauls its strategy in the world’s biggest auto market, four sources told Reuters.

Besides the focus on green vehicles, the plan involves using more locally made parts and technologies to reduce costs and help the struggling Japanese carmaker compete better with lower-cost Chinese firms and major global rivals, the sources said.

The China strategy is a key pillar of Nissan’s turnaround, which involves focusing on producing profitable cars for China, Japan and the United States, rather than chasing all-out global growth as it did under disgraced former boss Carlos Ghosn.

“Before we were saying global, global, global, and China was just part of that strategy,” one of the four people familiar with the plans told Reuters.

“With regionalisation now replacing globalisation, we have to improve the cost competitiveness of all the components and technologies that go into a car by going totally local,” he said.


“Regionalization now replacing globalization” is some real smart Wall Street guy* shit.

5th Gear: The Stock Market Continues To Make No Sense

This item is not about GameStop, I promise, though the GameStop thing is extremely funny. No, this item is about Apple, whose stock I really should’ve bought into when I was in college in the early aughts. Apple has been rumored to be interested in making a car for forever. Now the smart Wall Street guys* are saying that its stock could be higher as a result.


From Bloomberg:

Apple Inc. could disrupt the automotive industry with an Apple Car much as it did the cell-phone industry with the iPhone, according to Evercore ISI analyst Amit Daryanani.

“IPhone was a computer in your pocket, Car will be a computer on wheels,” he said in a research note published Jan. 24.

Daryanani sees “increased probability” that Apple could introduce an autonomous electric vehicle in the next five years and make money from providing passengers with an array of services. He estimated a car could add $36 billion to Apple’s sales.

Apple reported revenue totaling $274.5 billion in fiscal year 2020. The company will release its first-quarter results on January 27.

Daryanani raised his target price for Apple stock to $160 a share; it traded up 3% to $143.18 at 1:12 p.m. in New York.


I highly doubt Apple will do a car, though the company as a whole has been so unimaginative under Tim Cook that it just might.

*I’m hearing that there are no smart Wall Street guys.

Reverse: RIP The Dodge Chargers Used In The Making Of This Show

My brother and I would watch The Dukes Of Hazzard on Saturday mornings in the ‘90s in between Matlock, Knight Rider, and MacGyver. MacGyver, clearly, was the best.


Neutral: How Are You?

I am in Los Angeles for a bit, as I have mentioned too many times. The place I was staying until recently had an unbelievable mouse problem, to which my colleague Jason Torchinsky, a former LA resident, said, “There are a lot of mice in LA and a lot of fat cats.” Needless to say, this whole experience has turned me into a cat person.