Good morning! It’s Thursday, February 6, 2025, 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: Nissan Says Thank You, Next To Honda Merger
Nissan isn’t giving up on love just yet. Despite the fact its merger deal with Honda to create the world’s third-largest automaker seems to be in the shitter, the Japanese automaker is still looking for a potential partner. One of those possible partners has turned out to be Taiwan’s Foxconn.
Nissan’s CEO, Makoto Uchida, met with Honda’s CEO, Toshihiro Mibe, earlier this morning to say he wanted to end discussions with Honda after it proposed making Nissan a subsidiary. Apparently, Nissan isn’t into Dom-Sub play. From Reuters:
Nissan is now open to working with new partners, including technology companies, as it looks to navigate the technological upheaval brought by electric vehicles, software-driven cars and new, fast-moving Chinese manufacturers, the two people familiar with its thinking said.
It was also open to working with Taiwan’s Foxconn, the world’s largest contract electronics maker, one of them said.
Foxconn, which manufactures Apple’s, opens new tab iPhones and has been seeking to expand its nascent EV contract manufacturing business, approached Nissan about a bid but was rejected by the carmaker, Reuters reported in December.
Foxconn’s EV business is led by a former Nissan senior executive, Jun Seki, who was once seen as a contender to become the automaker’s CEO, before the job went to current boss Uchida.
Back in December of 2024, Honda and Nissan signed a memorandum of understanding to discuss a merger of the two automakers under a holding company. Things, however, have since fallen apart because of growing differences between the two. The main issue is apparently that Honda (a strong automaker) said it wanted to make Nissan (a comparatively weak automaker) into a subsidiary. Nissan decided that talks couldn’t continue under that proposal.
Nissan will formalise the decision to withdraw from the MOU at a board meeting to be held before the company’s third-quarter earnings announcement next week, the person added.
Honda’s current stance is that it would not accept an integration unless Nissan agrees to become a subsidiary, Japanese public broadcaster NHK reported.
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A scrapping of the discussions raises questions about how Nissan, which is in the middle of a turnaround plan, can ride out its latest crisis without external help. Nissan has already announced plans to cut 9,000 workers and 20% of global capacity.
It’s going to be very interesting to see where things go from here. I mean, it doesn’t really seem like Honda needs Nissan, but in a lot of ways, this deal seems like a bit of a lifeline for Nissan. Some folks just don’t like being told they’re not as good as someone else.
2nd Gear: Ford Earnings Topped $10.2 Billion in 2024
Ford’s 2024 adjusted earnings before interest and taxes may not have topped where they were in 2023, but the automaker still cleared $10.2 billion for the year (it was $10.4 billion in ’23.)` The Blue Oval has strong F-Series pickup sales and gains in its commercial vehicle business to thank for this solid number. It was able to get over $10 billion despite the fact its Model e electric unit reported a full-year EBIT loss of $5.1 billion.
In 2025, Ford said it plans to make significant progress on quality and costs as warranty work continued eating into its profits in 2024. There is some promise that Ford’s on the right track with warranty work. In the fourth quarter, it spent $500 million less on warranty costs than it did in the third quarter. From the Detroit Free Press:
“Ford is becoming a fundamentally stronger company. We finished 2024 with a solid fourth quarter, capping the highest revenue year in Ford’s history,” CEO Jim Farley said in a statement. “Our product portfolio offers the broadest powertrain choice. And Ford Pro, with its mid-teen margins, leading market position, and growing service and repair revenue, provides unique advantages for continued growth.”
For the full year, the Dearborn-based automaker reported revenue rose 5% to $185 billion, a record figure, House said, compared with $176.2 billion in 2023. It should be noted that the 2024 full-year result is compared with 2023 when the nationwide UAW Stand-Up strike halted production at key Ford plants that built high-profit vehicles including Ford Broncos and Super Duty pickups. That cost the company $1.7 billion in lost profits in 2023.
For the fourth quarter, Ford beat Wall Street revenue expectations. It reported revenue of $48.2 billion compared with $46 billion a year ago. Zack’s consensus predicted Ford quarterly revenue would be $43.6 billion.
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Ford is building a solid software and physical services business, led by commercial customers at Ford Pro which achieved a full-year EBIT of $9 billion, up from $7.2 billion in 2023.
The Ford Model e EV team delivered $1.4 billion in cost reductions last year. Still, for the year, Model e lost $375 million more than it did in 2023, putting its EBIT at a loss of $5.1 billion.
Ford Blue reported flat revenue despite a 2% decline in wholesale sales driven by the discontinuation of larger products. For 2024, Ford Blue — which develops gasoline and hybrid vehicles — reported EBIT dropped to $5.3 billion compared with $7.5 billion a year earlier.
During a call earlier this week, Farley told Wall Street analysts that cutting costs in 2025 was paramount for Ford’s continued growth and survival. He added that there was pressure from regulators and the market for automakers to lower prices on vehicles. Because of that, Ford is apparently going to invest more money into affordable vehicles.
He also said Ford will exercise “pricing discipline” on its vehicles even as it cuts cost. It can only do that by reducing its inventory to match supply to demand, Farley said. Ford ended 2024 “in good shape,” he said, in terms of its new-vehicle stock at dealerships and the automaker plans a big reduction in inventory through the second quarter. By the end of that quarter, “we’ll be exactly where we want — in that 50 day supply range.”
This is just the tip of the iceberg when it comes to what’s going on inside of Ford, so if you want a closer look at everything, including current profits and how President Trump’s tariffs could muck things up, head on over to the Detroit Free Press.
3rd Gear: Rivian Betting On AI To Improve Driver Aids
Rivian’s hands-free driving system is one of the best in the business, but the nascent electric automaker is looking to develop the system further by integrating new software and more artificial intelligence. It’s all being done in a — slightly ill-advised — attempt to catch up to Tesla.
Of course, the one area where Riv definitely has Tesla beat is in its willingness to spend money on high-tech sensors like radar and lidar. Thank God for that. As we all know, Tesla relies solely on cameras for its hands-free driving hardware. From Automotive News:
“As competition in this space evolves, I think you are going to see [automakers] with more sensors,” [Rivian CEO RJ] Scaringe said at Rivian’s showroom here in late January. “One of the areas where we are different than Tesla — we’ve put more sensors in the vehicle, recognizing that is a way to catch up to what they’ve built using a camera-only system.”
Rivian is benefiting from massive changes in Silicon Valley over the last few years, Scaringe said. The emergence of AI allows software to progress more quickly. And Rivian’s new in-vehicle computers come from industry leader Nvidia, with a big boost in processing power starting with the 2025 model year.
“Gen one is going to get slightly better over time,” Scaringe said regarding driver assistance. “Gen two is going to be wildly better a year from now versus what it is today because of how the system is built.”
To be sure, Rivian is behind Tesla and several legacy automakers in driver-assist features, including General Motors with its Super Cruise system, which allows for highway driving with hands off the wheel and eyes on the road. But Scaringe sees a pathway to catch up.
This year, Rivian will offer hands-free highway driving that, like Super Cruise, is considered a Level 2 system by SAE International. Level 2 requires the driver to be in control at all times. Next year, Rivian plans to release a Level 3 system that allows a driver to disengage from driving duties under certain circumstances.
Right now, Rivian’s second-generation models have 11 cameras and five radar sensors. They all work together to form the “Rivian Autonomy Platform,” AutoNews reports. In order to reach full autonomy, Scaringe says Rivian will likely have to add a lidar to its array of sensors.
“I think Level 4 will require more sensors than cameras and radar,” he said. The price of lidar units has fallen in recent years to just a few hundred dollars, making it feasible now to add to mass-produced vehicles.
This is all being done in an effort to catch up to Tesla’s “Full Self-Driving” program, which is still just a Level 2 system (and not a very good one at that). Even at Level 3 and Level 4, CEO Elon Musk says lidar and radar are unnecessary, and they add cost and complexity. I don’t know about that one, amigo.
4th Gear: Volvo Says 2025 Will Probably Be Rough
Volvo is gearing up for a disappointing 2025, and we’re barely a month into the year. The Swedish automaker warned that it would be both tumultuous and competitive, and it might struggle to match the sales performance and profitability it saw in 2024. From Reuters:
“We’re going to see more turbulence,” Volvo CEO Jim Rowan told Reuters after the Swedish-based automaker posted a lower fourth-quarter profit. “We’re going to see more hyper competition, China will remain very, very competitive and we’ll start to see more competition in Europe.”
Majority-owned by China’ Geely, Volvo faces similar challenges to other major automakers, with a weakening market in Europe, new rivals in China where an electric vehicle price war has been raging for more than two years, and lower-than-expected demand for EVs in Europe and the United States.
European and U.S. tariffs on Chinese-made EVs are also a large worry for Volvo, which is moving more production out of China but faces tariffs in the meantime.
With U.S. President Donald Trump threatening tariffs against Europe, Rowan told analysts on a conference call that “we have the flexibility to increase production” at the automaker’s plant in Charleston, South Carolina.
Volvo didn’t expect car demand to grow at the same rate as in previous years, and competition would mean price cuts across the board, making it “challenging to reach the volumes and profitability” achieved in 2024, Rowan said in a statement.
Last year, Volvo’s retail sales grew eight percent, which was just about where they were expected to be after Volvo revised its forecast in the middle of the year. Originally, it was expected to grow by 12 to 15 percent. The automaker also nerfed some of its electrification ambitions, saying it would sell hybrids longer than originally expected.
I’ve always sort of dug into what Volvo does in the luxury car space — going against the grain of other European luxury OEMs like BMW and Mercedes-Benz. Hopefully, it can figure its shit out before it loses all relevancy in that space.