Investors punish Ferrari

Greetings from London!

Germany's auto industry has been clear about its desire to amend, delay or simply get rid of the European Union's 2035 ban on the sale of new fossil-fuel cars. 

German Chancellor Friedrich Merz has also now made it clear that he has the auto industry's back, declaring if he has his way "there will be no such hard cut in 2035."

Like Germany's economically important auto industry, Merz says he favors allowing different technologies incorporating combustion engines such as plug-in hybrids and EV range extenders to thrive beyond 2035.

For many years Germany largely got what it wanted when it came to the EU, not least of all because it pays a lot of the bloc's bills. But it remains to be seen how much the European Commission is willing to budge on key climate commitments.

Which brings us to today's Auto File…

With its fat margins and a wealthy customer base willing to pony up sacks of cash for cars that start at over $200,000, Ferrari has long been a darling of investors.

Up until last Wednesday, for instance, its market capitalisation was equivalent to, say, Porsche and Mercedes-Benz combined.

But at a long-trumpeted capital markets day at Ferrari HQ in Maranello, the iconic automaker's 2030 revenue forecast came in beneath market expectations and its shares fell more than 16% - wiping 13.5 billion euros ($16 billion) off its market cap. Ouch.

The company's tanking share price overshadowed Ferrari's slow-walk unveiling of its first electric car – it showed off the tech for the car, but not the car itself.

Ferrari also lowered its expectations for how much of its lineup will be fully electric by 2030. Not that investors cared so much about this, as the company's sales will remain dominated by combustion-engine models for a long time to come.

Ford ditches EV tax credit plan - REUTERS/Toby Melville.

Shortly before the $7,500 U.S. federal EV tax credit expired at the end of September, General Motors and Ford hit on a clever way to keep the party going.

The two automakers rolled out programs to retailers under which their financing arms made down payments on dealers' EVs, qualifying GM and Ford for the tax credit and allowing dealers to offer leases on those cars to retail customers at the subsidized rate.

But as Reuters subsequently reported, GM has been forced to abandon the scheme after concerns were raised about it by Republican Senator Bernie Moreno of Ohio, a former car dealer who is active in auto policy.

A day later, Ford followed suit, though it was unclear why.

Ford and GM had developed their strategies after discussions with tax officials. But just because it's legal doesn't make it politically savvy.

Tesla's not-as-expensive Model Y - Tesla Motors/Handout via REUTERS. 

Tesla's least expensive car?

Somehow, after all of Elon Musk's talking up an affordable Tesla EV to broaden the brand's mass appeal, the automaker instead launched versions of its Model Y and Model 3 that… aren't really cheap.

Rather than game-changing models, the new versions are about $5,000 cheaper than existing ones, which hit Tesla's stock.

For a car company that defined the EV world with tech no one could match for years, Tesla seems a bit stuck. What a growing number of analysts and car experts say Tesla needs is to apply its great tech to more models if it wants to win in a competitive market – not endlessly rehash existing models.

That is true in both China and Europe, where Tesla needs help.

Tesla has suffered in Europe this year and the "affordable" Model Y faces a large, growing crowd of cheaper, newer EVs from both Chinese and European automakers.

After a rough period that saw the ouster of its previous CEO, Stellantis' first quarter under new boss Antonio Filosa saw global vehicle shipments up 13% versus the third quarter in 2024.

Growth was particularly pronounced in North America – the source of Stellantis' problems last year – where shipments surged 35%, partly driven by the launch of the high-margin V8-powered Ram 1500.

But Stellantis is not out of the woods yet, as the world's No. 4 automaker has delayed unveiling its new strategic plan to the second quarter of next year - instead of the first quarter as previously announced – to give Filosa more time to address major uncertainties in its key markets.

Porsche saw global deliveries decline by around 6% in the third quarter, calculations based on its nine-month and half-year data showed, while sales fell around 20% in China and 5% in North America.

China's No. 1 automaker BYD considers Spain to be its top candidate for a third car factory to serve the European market, two people briefed on the matter told Reuters, as the company seeks to grow sales on the continent.

General Motors will take a $1.6 billion charge in the third quarter as it reshapes its EV strategy following the scrapping of the U.S. EV tax credit, a move likely to dampen demand.

First Brands founder Patrick James stepped down as CEO and was replaced by Chief Restructuring Officer Charles Moore on an interim basis, as the auto parts maker advances its Chapter 11 bankruptcy process.

A fire at a New York aluminium plant that is expected to affect production of Ford's F-150 truck for months will sap up to $1 billion from the automaker's earnings, according to Evercore ISI analysts.

Some of the world's biggest carmakers manipulated diesel emissions tests because they "would rather cheat than comply with the law," lawyers for over 1.6 million claimants told London's High Court at the start of a huge trial.

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