The Auto Industry Was As Horrified As Everyone Else

Illustration for article titled The Auto Industry Was As Horrified As Everyone Else
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Yesterday was bad, Elon Musk might soon be the richest man in the world on paper, and rhodium. All that and more in The Morning Shift for January 7, 2021.

I would say that yesterday was one of the dumbest days in American history, but everyone has already said that. That’s too much credit for a bunch of nobodies in any case. Keep calm and car on, as they say.

1st Gear: Auto People React

GM CEO Mary Barra tweeted:

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Ford CEO Jim Farley also tweeted:

The U.S. Attorney for the Eastern District of Michigan (who prosecuted the UAW corruption scandal) also tweeted:

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UAW President Rory Gamble made a statement:

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The National Association of Manufacturers also weighed in, because everyone was waiting for what the National Association of Manufacturers had to say:

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This will all be a distant memory soon, and you get the feeling that it was always going to end like this, with a cheap and pointless crime that temporarily delayed the adults from conducting their duties. Four people have now been reported dead.

2nd Gear: Car Sales Are Bad In Europe

The reason is the pandemic. Aside from a bunch of nobodies storming the Capitol we still have the pandemic to worry about.

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From Bloomberg:

Registrations fell by about 25% last year across Germany, the U.K., France, Italy and Spain, Europe’s five largest car-buying countries, according to industry associations and transport ministries. The resurgence of Covid-19 led several governments to re-implement lockdown measures that are likely to drag on demand into early 2021.

Germany’s new-car registrations dropped roughly 20% in 2020, based on preliminary data from the Federal Motor Transport Authority, which will post detailed numbers Friday. Figures released earlier this week showed sales plunged 32% in Spain, 29% in the U.K., 28% in Italy and 25% in France. The U.K. auto industry’s trade group said the country’s decline was the worst since 1943.

The data show the outsize impact the coronavirus had on Europe’s car industry last year relative to China and the U.S., where car-buying was more resilient. Ongoing weakness in demand poses a risk to the euro-area economy, which relied heavily on the manufacturing sector in staging a recovery in the second half of last year.

“We are in a deep crisis,” Pierre-Louis Debar, head of statistics for French car-industry group CCFA, said in an interview. “It’s more extensive than anything we’ve seen in the past.”

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3rd Gear: Rhodium? Rhodium!

Rhodium is used in catalytic converters, and a lot of countries are worried about cleaning the air these days. That has sent the price of rhodium skyrocketing.

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From The Financial Times:

Car companies in Europe and China are using ever more rhodium to meet tougher clean-air legislation, at the same time as supply from South Africa, the biggest producer, has been disrupted by the spread of Covid-19.

Assisted by the economic recovery in China, the world’s largest car market, benchmark prices for rhodium have hit a record of $17,790 an ounce, up more than 200 per cent since their March 2020 low. That means one kilogramme of rhodium is worth almost half a million pounds.

“You have a massive scramble for metal” by car companies, said Nicholas Hops, co-manager of the Coronation Resources Fund. “If you don’t have sufficient rhodium you can’t meet the emissions legislation and we know how draconian those fines are.”

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4th Gear: Elon Musk

The value of Tesla on paper is huge, or over $700 billion. The value of Ford, for context, is about $34 billion. On paper, Tesla’s value has CEO Elon Musk nearly the richest person in the world.

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From Bloomberg:

A 2.8% rally in the electric carmaker’s share price Wednesday boosted Musk to within $3 billion of Amazon.com Inc. founder Jeff Bezos, who currently occupies the top spot on the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people.

The South Africa-born engineer’s net worth was $181.1 billion on Wednesday, just shy of Bezos, who has held the top spot since October 2017. As chief executive officer of Space Exploration Technologies Corp., or SpaceX, Musk is also a rival to Bezos, owner of Blue Origin LLC, in the private space race.

The milestone caps an extraordinary 12 months for Musk. Over the past year his net worth soared by more than $150 billion in possibly the fastest bout of wealth creation in history. Fueling his rise was an unprecedented rally in Tesla’s share price, which surged 743% last year on the back of consistent profits, inclusion in the S&P 500 Index and enthusiasm from Wall Street and retail investors alike.

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Elon’s pay is largely tied up in stock that and may or may not ever materialize, depending on Tesla’s future. But it’s always nice to be the mostest of something.

5th Gear: Model Y Sales In China Are Big

There are wait times there for the car, which has basically met expectations in terms of sales. Said expectations were huge.

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From Bloomberg:

A basic version of the electric vehicle purchased now will be delivered in the second quarter, and a performance variant in the third quarter, Tesla’s website showed. When Tesla announced the price last week and started sales, it said deliveries would take place this month.

A strong start for the vehicle would be a boon for Tesla as it seeks to maintain its lead in the premium segment over rivals such as Nio Inc. Tesla CEO Elon Musk has said the Model Y has the potential to outsell all other vehicles it makes, and the company set the vehicle’s price below some other marques to keep a competitive edge.

“Based on the order intake and our production plan, we have adjusted the Model Y delivery time of latest orders to the second quarter,” a Tesla representative said Thursday via WeChat.

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Reverse: Balloon? Balloon!

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Neutral: How Are You?

I watched the news last night, which I don’t normally do, for mental health reasons. It was bad! But hang in there, we’ll be all right.

News Editor at Jalopnik. 2008 Honda Fit Sport.

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DISCUSSION

frankencamry
FrankenCamry

I was less horrified by the events yesterday and more by the vast numbers of people that apparently didn’t see it coming. (And also the lack of appropriate response. Those morons should have been gassed before breaching the Capitol.)

This whole administration has been the living embodiment of “Play stupid games; win stupid prizes.”