Ford Motor(F) CNBC·2024-11-25 11:00Core Insights - The automotive industry is undergoing a significant shift as companies attempt to reduce costs and improve capital efficiency after years of excessive spending on electric and autonomous vehicles [2][4][18] - Major automakers are implementing drastic measures, including layoffs and production cuts, in response to weakening consumer demand and rising commodity costs [3][18][21] - The industry's capital expenditures have surged, with research and development costs for the top 25 automotive companies increasing by 33% from approximately 266 billion in 2023 [6][7] Group 1: Industry Spending and Cost-Cutting - Automakers have invested tens of billions into self-driving and electric vehicle technologies, often with little to no short- to mid-term returns [6][8] - General Motors and Ford have cut billions in fixed costs, including significant layoffs, while other companies like Nissan and Volkswagen are taking more severe actions [3][18] - The average return on invested capital (ROIC) for traditional automakers is around seven or less, compared to tech companies like Alphabet, which have a ROIC of approximately 22 [15][14] Group 2: Company-Specific Actions - Lucid Motors and Rivian have reported substantial cash burn, with Lucid losing 16 billion since 2022, as they work to ramp up production and reduce losses [8][25] - GM has maintained profitability with about 11 billion going forward [23][24] - Stellantis, formed from the merger of Fiat Chrysler and PSA Groupe, has achieved around 5.8 billion, while Lucid's largest shareholder, Saudi Arabia's Public Investment Fund, has invested billions into the company [25][20] - Historical partnerships in the industry have often failed to yield long-term success, as seen with Rivian and Ford's canceled plans to co-develop EVs [30][29]