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Auto Roundup: STLA-UAW Lawsuits, NSANY's ChargeScape Investment & More
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Last week, auto biggies reported third-quarter U.S. vehicle sales numbers. U.S. light vehicle sales declined around 2% in the September quarter amid high new-vehicle prices, tight credit conditions and elevated borrowing costs.
On the news front, Japanese auto giants Toyota (TM - Free Report) , Subaru (FUJHY - Free Report) and Nissan (NSANY - Free Report) grabbed the limelight. While TM announced an additional $500M investment in Joby Aviation, NSANY is set to acquire a 25% stake in ChargeScape.Meanwhile, Subaru will collaborate with Toyota to launch a jointly developed EV in Japan, the United States and Europe in 2026. Electric vehicle (EV) pioneer Tesla (TSLA - Free Report) also made it to the top stories with the Cybertruck recall and its decision to shelve the Model 3 compact sedan in the United States amid high tariffs. Finally, Italian-American automaker Stellantis (STLA - Free Report) has filed multiple lawsuits against the United Auto Workers (UAW) over a dispute involving strike authorization and the union's proposal to restore the costly Jobs Bank system
Past Week’s Top Stories
Toyota is investing another $500 million in California-based electric vertical takeoff and landing (eVTOL) company Joby Aviation. This capital injection aims to accelerate Joby’s certification process and commercial production, signaling Toyota’s belief in the future of urban air mobility.Joby is a leading player in the eVTOL space, a nascent industry poised to revolutionize transportation by offering small electric aircraft capable of vertical takeoffs and landings.
The $500 million commitment will be delivered in two tranches, with the first installment expected by the end of this year and the second by 2025. It will bring Toyota’s total investment in Joby to $894 million, further cementing their partnership.
Toyota’s investment in Joby is part of a broader strategy to diversify its portfolio across various transportation technologies. By investing in air taxis through Joby, Toyota is positioning itself at the cutting edge of transportation innovation. TM’s expertise in mass production and supply chain management will likely be invaluable as Joby scales its operations and moves toward commercial viability.
Subaru and Toyota are set to launch their second jointly-developed electric SUV in 2026, as reported by Nikkei. This new model, following the Subaru Solterra and Toyota bZ4X, will be available in the United States, Europe and Japan. Production will take place at Subaru's Yajima plant in Japan's Gunma prefecture, with a planned monthly output of 15,000 to 20,000 units.
To keep production costs down, the new electric SUV may reuse some components from Solterra and bZ4X, according to the report. Before this new electric SUV hits the market, Subaru plans to bring back the Crosstrek Hybrid, a plug-in hybrid model that shares a powertrain with Toyota. Discontinued after the 2023 model year, the Crosstrek Hybrid will return alongside the 2026 Subaru Forester Hybrid, with both models featuring the same hybrid system.
Subaru, which has set an ambitious goal to have 50% of its sales be electric by 2030, has confirmed four additional battery-electric models by 2028, with at least one to be manufactured in the United States. These models will likely continue to benefit from Toyota’s input. Subaru has also announced that it will adopt Tesla’s North American Charging Standard (NACS) port for its future EVs.
Nissan has announced its investment in ChargeScape, a joint venture focused on integrating EVs with the power grid. ChargeScape was launched by BMW, Ford and Honda last month, and once the deal is finalized, Nissan will acquire a 25% stake in the company. The venture's services will be offered to EV users in the United States and Canada.
ChargeScape's software connects wirelessly to EVs, managing the flow of electricity based on grid conditions. It helps reduce energy demand during peak hours through smart charging (V1G) and allows energy to be sent back to the grid when necessary (V2G). By offering a unified platform for utilities, automakers and customers, ChargeScape simplifies EV-grid integration. EV drivers can benefit financially by pausing charging during high-demand times or selling stored energy back to the grid, earning incentives in the process.
Nissan's participation is particularly significant given its sales of more 650,000 LEAF models in the United States, which are capable of exporting power back to the grid. The automaker is also investing in bidirectional charging (V2X) technology for its global EV fleet. Meanwhile, ChargeScape is developing virtual power plants in regions such as California and Texas, further advancing the integration of EVs with the power grid.
Tesla issued a recall for more than 27,000 Cybertruck vehicles in the United States due to visibility issues with the rearview camera. This marked the fifth and largest recall for the electric truck, which was launched at the end of 2023.
According to the National Highway Traffic Safety Administration (NHTSA) filing, the recall stems from a software problem that causes the rearview display to remain blank for up to eight seconds after shifting into reverse. However, the legal limit required by U.S. regulations is two seconds after shifting into reverse. This delay could reduce visibility and increase the risk of accidents.
In a separate development, TSLA discontinued its most affordable Model 3 compact sedan. The Model 3 Standard Range Rear-Wheel Drive, priced at $38,990, featured lithium iron phosphate (LFP) battery cells sourced from China. The United States recently imposed higher tariffs on imports from China, which include a 100% tariff on EVs and a 25% tariff on EV batteries and key minerals. Also, cars with China-made components like LFP battery cells are no longer eligible for the $7,500 federal tax credit. Now, Tesla’s most affordable option in the United States is the Model 3 Long Range Rear-Wheel Drive, which is priced at $42,490.
Stellantis has filed a series of lawsuits against the UAW and its local unions following a dispute over job security provisions. The automaker initially filed a lawsuit after members of Local 230 at its Los Angeles Parts Distribution Center requested strike authorization, claiming that the UAW has no right to authorize a mid-contract strike. Stellantis followed this with eight additional lawsuits targeting the UAW and 23 local unions.
At the heart of the dispute is the union's proposal to restore the Jobs Bank system, which allowed automakers to keep laid-off workers on payroll without assigning them production tasks. Stellantis argues that this system, which led to substantial costs in the 2000s, contributed to its 2009 bankruptcy. The automaker rejected the proposal, stating that it would threaten its financial stability, particularly for workers at the Belvidere Assembly Plant.
The conflict traces back to August when the UAW accused Stellantis of not fulfilling its commitments to reopen the Belvidere plant. Stellantis claims that any strike would be illegal under contract terms and warns that a strike could lead to significant financial losses. The company plans to pursue litigation if necessary.
Price Performance
The following table shows the price movements of some of the major auto players over the past week and six months.
Image Source: Zacks Investment Research
What's Next in the Auto Space?
Tesla’s much-hyped Robotaxi event is scheduled for tomorrow. It remains to be seen if it lives up to the hype. Meanwhile, the third-quarter 2024 earnings season for the auto sector kicks off next week. Industry watchers will also track China vehicle sales data for September 2024, which will be released by the China Association of Automobile Manufacturers soon.
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Auto Roundup: STLA-UAW Lawsuits, NSANY's ChargeScape Investment & More
Last week, auto biggies reported third-quarter U.S. vehicle sales numbers. U.S. light vehicle sales declined around 2% in the September quarter amid high new-vehicle prices, tight credit conditions and elevated borrowing costs.
On the news front, Japanese auto giants Toyota (TM - Free Report) , Subaru (FUJHY - Free Report) and Nissan (NSANY - Free Report) grabbed the limelight. While TM announced an additional $500M investment in Joby Aviation, NSANY is set to acquire a 25% stake in ChargeScape.Meanwhile, Subaru will collaborate with Toyota to launch a jointly developed EV in Japan, the United States and Europe in 2026. Electric vehicle (EV) pioneer Tesla (TSLA - Free Report) also made it to the top stories with the Cybertruck recall and its decision to shelve the Model 3 compact sedan in the United States amid high tariffs. Finally, Italian-American automaker Stellantis (STLA - Free Report) has filed multiple lawsuits against the United Auto Workers (UAW) over a dispute involving strike authorization and the union's proposal to restore the costly Jobs Bank system
Past Week’s Top Stories
Toyota is investing another $500 million in California-based electric vertical takeoff and landing (eVTOL) company Joby Aviation. This capital injection aims to accelerate Joby’s certification process and commercial production, signaling Toyota’s belief in the future of urban air mobility.Joby is a leading player in the eVTOL space, a nascent industry poised to revolutionize transportation by offering small electric aircraft capable of vertical takeoffs and landings.
The $500 million commitment will be delivered in two tranches, with the first installment expected by the end of this year and the second by 2025. It will bring Toyota’s total investment in Joby to $894 million, further cementing their partnership.
Toyota’s investment in Joby is part of a broader strategy to diversify its portfolio across various transportation technologies. By investing in air taxis through Joby, Toyota is positioning itself at the cutting edge of transportation innovation. TM’s expertise in mass production and supply chain management will likely be invaluable as Joby scales its operations and moves toward commercial viability.
Subaru and Toyota are set to launch their second jointly-developed electric SUV in 2026, as reported by Nikkei. This new model, following the Subaru Solterra and Toyota bZ4X, will be available in the United States, Europe and Japan. Production will take place at Subaru's Yajima plant in Japan's Gunma prefecture, with a planned monthly output of 15,000 to 20,000 units.
To keep production costs down, the new electric SUV may reuse some components from Solterra and bZ4X, according to the report. Before this new electric SUV hits the market, Subaru plans to bring back the Crosstrek Hybrid, a plug-in hybrid model that shares a powertrain with Toyota. Discontinued after the 2023 model year, the Crosstrek Hybrid will return alongside the 2026 Subaru Forester Hybrid, with both models featuring the same hybrid system.
Subaru, which has set an ambitious goal to have 50% of its sales be electric by 2030, has confirmed four additional battery-electric models by 2028, with at least one to be manufactured in the United States. These models will likely continue to benefit from Toyota’s input. Subaru has also announced that it will adopt Tesla’s North American Charging Standard (NACS) port for its future EVs.
Nissan has announced its investment in ChargeScape, a joint venture focused on integrating EVs with the power grid. ChargeScape was launched by BMW, Ford and Honda last month, and once the deal is finalized, Nissan will acquire a 25% stake in the company. The venture's services will be offered to EV users in the United States and Canada.
ChargeScape's software connects wirelessly to EVs, managing the flow of electricity based on grid conditions. It helps reduce energy demand during peak hours through smart charging (V1G) and allows energy to be sent back to the grid when necessary (V2G). By offering a unified platform for utilities, automakers and customers, ChargeScape simplifies EV-grid integration. EV drivers can benefit financially by pausing charging during high-demand times or selling stored energy back to the grid, earning incentives in the process.
Nissan's participation is particularly significant given its sales of more 650,000 LEAF models in the United States, which are capable of exporting power back to the grid. The automaker is also investing in bidirectional charging (V2X) technology for its global EV fleet. Meanwhile, ChargeScape is developing virtual power plants in regions such as California and Texas, further advancing the integration of EVs with the power grid.
Tesla issued a recall for more than 27,000 Cybertruck vehicles in the United States due to visibility issues with the rearview camera. This marked the fifth and largest recall for the electric truck, which was launched at the end of 2023.
According to the National Highway Traffic Safety Administration (NHTSA) filing, the recall stems from a software problem that causes the rearview display to remain blank for up to eight seconds after shifting into reverse. However, the legal limit required by U.S. regulations is two seconds after shifting into reverse. This delay could reduce visibility and increase the risk of accidents.
In a separate development, TSLA discontinued its most affordable Model 3 compact sedan. The Model 3 Standard Range Rear-Wheel Drive, priced at $38,990, featured lithium iron phosphate (LFP) battery cells sourced from China. The United States recently imposed higher tariffs on imports from China, which include a 100% tariff on EVs and a 25% tariff on EV batteries and key minerals. Also, cars with China-made components like LFP battery cells are no longer eligible for the $7,500 federal tax credit. Now, Tesla’s most affordable option in the United States is the Model 3 Long Range Rear-Wheel Drive, which is priced at $42,490.
Tesla carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stellantis has filed a series of lawsuits against the UAW and its local unions following a dispute over job security provisions. The automaker initially filed a lawsuit after members of Local 230 at its Los Angeles Parts Distribution Center requested strike authorization, claiming that the UAW has no right to authorize a mid-contract strike. Stellantis followed this with eight additional lawsuits targeting the UAW and 23 local unions.
At the heart of the dispute is the union's proposal to restore the Jobs Bank system, which allowed automakers to keep laid-off workers on payroll without assigning them production tasks. Stellantis argues that this system, which led to substantial costs in the 2000s, contributed to its 2009 bankruptcy. The automaker rejected the proposal, stating that it would threaten its financial stability, particularly for workers at the Belvidere Assembly Plant.
The conflict traces back to August when the UAW accused Stellantis of not fulfilling its commitments to reopen the Belvidere plant. Stellantis claims that any strike would be illegal under contract terms and warns that a strike could lead to significant financial losses. The company plans to pursue litigation if necessary.
Price Performance
The following table shows the price movements of some of the major auto players over the past week and six months.
Image Source: Zacks Investment Research
What's Next in the Auto Space?
Tesla’s much-hyped Robotaxi event is scheduled for tomorrow. It remains to be seen if it lives up to the hype. Meanwhile, the third-quarter 2024 earnings season for the auto sector kicks off next week. Industry watchers will also track China vehicle sales data for September 2024, which will be released by the China Association of Automobile Manufacturers soon.