This week in EVs: The Tesla-Ford price war

This post was originally published on this site

Get news like this in real time by signing up for InvestingPro. Start your 7-day trial today.

Chatter spread Monday morning that the U.S. government might be putting the brakes on handing out tradable credits to electric vehicle (EV) manufacturers under a renewable fuel scheme, per reports that cited unnamed sources. According to the sources, supporters of the plan are pushing pause as they are worried about potential legal challenges.

The plan would give EV automakers such as Tesla (NASDAQ:TSLA) credits for charging vehicles using power generated from renewable natural gas, or methane.

The EPA recommended adding EVs to the U.S. Renewable Fuel Standard (RFS) last year and said it was considering public comments on the proposed change, but would not comment further on whether it would split out EVs from the mandate.

Tesla made headlines this week by unexpectedly increasing the prices of its Model 3 and Model Y vehicles in the United States, China, Japan, and Canada. This price hike comes as a surprise, as it is the first time Tesla has raised the price of the Model 3 since January, after several price cuts earlier in the year.

But they didn’t stop there. Tesla also raised the prices of its Model S and Model X vehicles in China, according to its website on Friday. The company appears to be maintaining a higher price point for these models in China, positioning them in the premium segment of the country’s electric car market.

Despite the changes this week, Tesla vehicles are still priced lower than they were at the beginning of the year.

As always, InvestingPro subscribers got this news in rapid fire. Never be left in the dust again.

TSLA shares added 5.4% this week.

Rival automaker Ford (NYSE:F) followed Tesla’s unexpected price hikes by slashing the prices of its Mustang Mach-E on Tuesday. Ford said it would be reducing most Mach-E prices by $3,000 to $4,000, depending on the specific version.

But Ford CEO Jim Farley expressed concern about the ongoing EV price war the very next day, calling it a “worrying trend.” He drew comparisons to Henry Ford’s series of price cuts for the Model T in 1913, which eventually put the company’s future in jeopardy.

Despite these concerns, Farley said Ford would face Tesla head on and cut prices on models such as the Mustang Mach-E, which directly competes with Tesla’s Model Y. It remains to be seen how this price war will play out and impact both companies in the long run.

Farley added: “There’s a limit to how far we’ll go.”

General Motors (NYSE:GM) started the week off with a cost-cutting move, reportedly letting go of several hundred full-time contract workers over the weekend. This move is part of the company’s larger goal to reduce its budget by $2 billion by the end of next year.

These job cuts come on the heels of a voluntary separation package offered to 5,000 salaried employees about a month ago. GM claimed the voluntary program would help it achieve close to 50% of its cost-cutting goal, and that no further involuntary cuts would be necessary.

Unfortunately, things did not improve for General Motors over the course of the week. Reports emerged that the company had pleaded guilty in a worker safety case related to the death of an employee at its St. Catharines facility in Canada.

The company was fined $325,000. The court also imposed a 25% victim fine surcharge, as required by the Provincial Offences Act, which will be credited to a special provincial government fund to assist victims of crime.

This was the second injury at the Canadian plant this year.

Shares of GM ended trading at $33.26, a 5% rebound off their weekly low achieved on Thursday.

Fisker (NYSE:FSR) ended its week on a high note as the American automaker announced Friday that it had delivered the first brand-new Fisker Ocean all-electric SUV to a customer in Denmark. CEO Henrik Fisker personally handed over the keys to the lucky customer, who received a limited launch edition of the electric SUV.

This delivery comes 24 weeks after Fisker officially began production in November of last year, making it a significant milestone for the company.

Amid a torrent of market-shaking EV news and other critical headlines, jump on the most important news to maximize your profits: Always be the first to know with InvestingPro.

Start your free 7-day trial now.