Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: Model 3 Production Will Go Up, Tesla Promises, Like Always
Tesla had a record loss of more than $675 million in the last quarter of 2017, which the company announced a day after shooting a Tesla Roadster into space. That’s far more than the company lost during the same period the year before, which The Guardian reports to have been $121 million.
But the numbers aren’t all bad—the projected ones, at least. According to the Wall Street Journal, Tesla said in its quarterly financial report that it’s on track to make 5,000 Model 3 sedans a week by the end of the second quarter. That goal’s been delayed twice already, as Tesla’s known to do.
But CEO Elon Musk assured shareholders on Wednesday that it’ll all work out, and that operating income will take a turn for the better. From the Journal:
This year “will be a transformative year for Tesla, with a high level of operational scaling,” Chief Executive Elon Musk wrote Wednesday in a letter to shareholders. “As we ramp production of both Model 3 and our energy products while keeping tight control of operating expenses, our quarterly operating income should turn sustainably positive at some point in 2018.”
Amid the buoyant predictions, Tesla cautioned shareholders that the company has encountered “difficulty of accurately forecasting specific production rates at specific points in time.” The company often misses its targets, as it did with the Model 3 in the fourth quarter, when it sold only about 1,550 of the sedans, and fell short of hitting the 5,000-a-week goal by the end of the year.
Tesla, if you remember correctly, has about half a million reservations for the Model 3. Its website currently says that people who order a Model 3 right now will have to wait 12 to 18 months, according to the Wall Street Journal.
2nd Gear: Nissan’s Profit Fell Again
With the inspection scandals and U.S. car discounts, Automotive News reports that Nissan’s operating profit fell again. The company’s operating profit for the last quarter of 2017 was half of what it was a year earlier: down to $752 million from $1.5 billion that same time in 2016.
Sales weren’t down by much at all, but a lot of other factors tanked Nissan’s operating profits—not including its weird, bad ad campaigns that seem more like an identity crisis than a promotional tactic. From Automotive News:
The automaker took a 39.6 billion yen hit in the quarter due to costs related to improper procedures for final inspections on vehicles produced at its Japan plants, while U.S. marketing and sales expenses, which include incentives, cost the automaker 41.8 billion yen.
Nissan admitted the inspection issue late last year, which resulted in the recall of around 1.2 million vehicles.
Operating profit in North America fell 37.3 percent to 16.9 billion yen, dropping due to high incentives to sell older models. A change in U.S. income tax policy resulted in a positive impact of 207.69 billion yen on net profit, Nissan said.
Nissan also readjusted its forecasts for lower sales and lower operating profits than originally expected this year, according to Automotive News.
3rd Gear: Volvo Doesn’t Plan On Slowing Down Yet
Volvo had a record 2017 as far as earnings and car sales go, and the company doesn’t expect that to slow down anytime soon. The company reported its fourth-consecutive year of record sales, and Reuters reports that 2017 numbers were helped by a strong demand for new models in China.
The Gothenburg-based company, one of Sweden’s biggest by sales, said operating earnings rose to 14.1 billion Swedish crowns ($1.76 billion) in 2017 from 11.0 billion a year earlier, as revenues climbed 17 percent to 210.9 billion crowns.
After the launch of new SUV models, the mainstay of Volvo’s business, and with its first U.S. plant set to begin production later this year, Chief Executive Hakan Samuelsson said the automaker was poised for further growth in 2018.
“We believe we will see another strong year of growth with higher profitability,” he told Reuters. “We now have all we need to keep growing and improve our profitability in order to reach the level where we want to be.”
Volvo sold 571,577 cars last year, according to Reuters, and expects to hit a sales target of 800,000 vehicles annually within the next few years.
4th Gear: There Could Soon Be An App For Wealthy People To Share Race Cars
Car sharing? Nah. That’s lame. Bloomberg reports that a former banker, Marco Abele, is in “advanced talks” with European insurance and asset-management company Allianz in partnering with his new app to let wealthy people share assets like race cars, paintings or vineyards.
It’s not like some typical vehicle-sharing app, of course. Abele’s app would be a big asset pool backed by Blockchain technology, a software platform for digital assets like cryptocurrency. From Bloomberg:
TEND aims to enable wealthy investors to share luxury goods such as race cars, paintings or vineyards, following the example of Uber Technologies Inc. and Airbnb Inc. Investors are to benefit from any value increases as a group and are also able to actually use their assets, such as a luxury car on a race track, Abele said. ...
“We want all the assets traded to be insured and we want to work with Allianz on this,” Abele said. Blockchain enables an efficient and transparent processing of insurance premium payments, according to the firm. “Our goal would be a ’pay-as-you-use’ solution - the insurer sees how often the luxury car leaves the garage, for example, and can use that information to set the premiums.”
According to Bloomberg, the “sharing” of assets will work kind of like this: An owner of something, like a race car, will list it and determine how many co-owners they want. Then the company handles the assessment, administration and maintenance of it.
That is, of course, if a person really wants to share their race car—or paintings, or whatever—with a bunch of folks they don’t know. Good luck with that one.
5th Gear: Automakers Team Up With Chinese Car-Sharing App Didi
Car companies get on big kicks of partnering with startups for the “future of the industry,” like car sharing and autonomous cars. Since companies think private car ownership is on its way out, 12 automakers have partnered with big-deal Chinese tech startup Didi Chuxing, according to the Nikkei Asian Review. The agreement and car sharing will focus on “new energy” vehicles, including electric cars.
The Nikkei reports that 10 local companies are in on the agreement, as well as Renault-Nissan-Mitsubishi and Kia Motors. From the Nikkei:
Under the agreement, DiDi will open its platform to automakers’ own sharing services. The new platform will also introduce auto-related finance and insurance services. Didi will cooperate with other car-sharing services, rental companies, infrastructure operators and after-sales service providers.
This will “reduce cost and enhance efficiency for the entire industry chain by integrating resources from cars, capital, parking spaces, charging points and refueling stations, to auto maintenance and repair services in a new, open ecosystem of collaboration.”
According to the report, the value of China’s car-sharing market reached $176 million last year and is expected to increase to more than $1.3 billion this year.
Reverse: Boeing 247 Takes Flight For The First Time
On Feb. 8, 1933, the Boeing Model 247 took flight for the first time. Boeing calls it “the world’s first modern airliner,” and now Boeing makes giant airliners with tiny bathrooms so that all of us can suffer and airlines can pack more of us into the cabin. Cool!
Neutral: Would You Actually Share Your Race Car With Investors?
Race cars feel like a pretty territorial thing, especially when it comes to people you don’t know. Would you actually buy into having co-owners for yours?