The storm is coming for German automakers, the Fiat and Peugeot merger remains on track, and Toyota’s decision to side with the Trump administration could hurt. All that and more in for Thursday, Jan. 23, 2020.

Tesla reached , the first American automaker to ever do so and a valuation that meant it is now worth more than Volkswagen, formerly the world’s second-biggest automaker. And while you can argue about whether Tesla’s stock price is justified, it’s hard to argue that they aren’t the industry leaders when it comes to electric vehicles, as everyone else tries to catch up.

, this has hurt German automakers in particular, as they spend billions of dollars to develop their own electric vehicles. Profits and sales are also down. Marques like BMW, Audi, and Mercedes compete more or less directly with Tesla, whose sales have soared. The Germans also haven’t helped themselves with things like . Per the WSJ:

Daimler, Volkswagen and Bayerische Motoren Werke AG continue to rack up record new car sales, but the auto brands are becoming less profitable and losing market share in the U.S. and elsewhere. Germany’s premium car makers have been hit by reputational damage from legal scandals; a global slowdown in vehicle sales; and higher expenses caused by the cost of investing in electric vehicles.

[...]

“The benchmark today is Tesla,” says Ferdinand Dudenhöffer, director of the Center for Automotive Research at Duisburg-Essen University. “Ten years from now, Tesla is going to be as big as BMW.”

Tesla is riding high right now, but a lot of automakers have taken their swings at BMW over the years and BMW has gone absolutely nowhere. And yet it does feel like the Germans need to act pretty swiftly, especially with coming into effect in Europe.

Another counterpoint: Tesla’s valuation doesn’t make sense as a car company.

“We are valued as an automotive company, but Tesla is valued like a tech company,” Volkswagen CEO Herbert Diess said this month at a gathering of the company’s top executives in Berlin, according to a transcript of his speech.

Still, the sales numbers tell a lot of the story.

Tesla sales in the U.S. have grown 10-fold since 2014, while Mercedes and BMW have lost market share. Audi sales did soar over the past five years, but the German brand is in the throes of restructuring and has barely gained any market share because rivals such as Tesla, Infiniti and Volvo Cars racked up bigger gains.

Ford lost $2.2 billion in the fourth-quarter 2019 because of a “remeasurement” associated with its pension and retirement plans, the automaker disclosed yesterday . Don’t cry for Ford, though. The company should still report a hefty profit when it announces its 2019 full-year earnings on February 4.

CFO Tim Stone in October said Ford expected total 2019 earnings before interest and taxes of $6.5 billion to $7 billion, down from its earlier projection of $7 billion to $7.5 billion. That would represent a decline from the $7 billion earned in 2018.

That’s according to FCA CEO Mike Manley, . The merger, which would create what could be the fourth-biggest automaker in the world—was .

Manley’s timeline for completing the deal by early 2021 is in line with a forecast made by the companies in December.

FCA and Peugeot are now getting into the details of how the merger will work, including choosing which vehicle platforms — the technological underpinnings of a vehicle — will fit which products in a combined company.

Because customers in different locations still prefer vastly different cars, there is room for multiple platforms in a combined group, Manley said.

“That global platform is an elusive beast,” he added. “This concept of a massive global platform in my mind is almost a myth but that doesn’t mean to say we’re not going to recruit significant volume.”

GM, Fiat, Toyota, Subaru, and a few others last year over federal fuel economy standards. And while that wasn’t terribly surprising—wake me up when corporations stop acting in their own self-interest—it still might have reputational effects for companies like Toyota and Subaru, whose buyers tend toward a demographic that aren’t very big fans of Trump.

Via :

The Union of Concerned Scientists, which is on the opposite side of Toyota in this legal battle, is pointing to results from a poll it commissioned that highlights a dramatic drop in favorability for the Japanese automaker over the issue.

The group is banking that Toyota consumers, more so than others, will react negatively when they learn that the company supports the Trump administration’s effort to revoke California’s authority to set its own emissions standards, an issue near and dear to people concerned about air quality and climate change.

[...]

“Initially, 78% of all Toyota owners said that they would definitely purchase another Toyota. After learning more about the lawsuit, that number drops to less than half of all Toyota owners (47%),” according to the results, which were provided to the Free Press. The margin of error was plus or minus 3.1 percentage points.

Pollster Matt George said the results should concern Toyota, in particular, because of the negative reaction from younger Toyota owners, those 18 to 34. Four in 10 of those consumers who initially said they would purchase another Toyota said they would consider switching brands over Toyota’s stance, a situation that could be more concerning for the automaker because few of those polled (15%) were fully aware of the issue.

I think big picture it won’t have much impact, since a lot of people simply don’t pay attention to things like this. But we’ll see, so take this for what it’s worth.

The company agreed to invest $3.5 billion into the state as part of a new deal that will also reduce its tax breaks by $325 million, . That sounded like a lot of money until I learned that the total tax break is still worth $2.28 billion, spread out over a 20-year agreement that started in 2009.

From The Detroit News:

The investment at Detroit-Hamtramck will make it “the future home of of a recently announced battery-electric truck and other electric vehicles,” according to the Michigan Economic Development Corp. Although GM hasn’t said what it plans to build there, one possibility is an electric Hummer pickup truck to be marketed under the GMC brand.

“Overall, this will solidify the company’s continued to commitment to growing in our state as well as Michigan’s uncontested leadership in automotive design and manufacturing,” Michigan Economic Development Corp. CEO Jeff Mason said Wednesday.

In return, the automaker can be more flexible with staffing.The original terms of the 2009 agreement allowed the automaker to claim only 6,750 Jobs at the GM Technical Center in Warren and did not allow it to claim credit at its Renaissance Center headquarters.

“We agreed to the amendment because it would create more flexibility for GM to manage its business and manpower and sets the stage for the company to continue investing in our Michigan facilities in the coming years,” GM spokesman Dan Flores said in a statement.

He but was later sent to prison for drug smuggling and, well, seems like an unpleasant fellow.

Don Whittington charged up to a desk inside a gargantuan Fort Lauderdale warehouse built from blue…

I’m curious to hear from Mercedes and BMW owners, since it seems like once one goes Merc or Bimmer you never go back. But this is possibly just perception.