You ready. Yeah. Let's do it.About 120 miles an hour. Quicker than a Ferrari. Smoother and quieter than the Cushiest sedans.When it comes to performance, today's EVs embarrass gas burning cars. They have instant torque, a low center of gravity and unbelievable traction. I am worried about what my face is going to look like when I see the footage on this.High performance was crucial to selling EVs to the public. It helped legitimize the idea of an EV as, like I said, something more than just a glorified golf ...

Core Viewpoint - The EV market is experiencing a shift towards American supply chains, with Tesla encouraging suppliers to avoid China-based parts due to national security concerns, which is expected to influence other automakers as well [2][3] Industry Trends - American automakers are focusing on reducing EV costs through improved manufacturing processes, exemplified by the Nissan Leaf priced under $30,000 compared to the average combustion vehicle price of about $50,000 [4] - Leasing options for EVs are becoming more attractive, with monthly payments for models like the Ford Mustang Mach-E and Honda Prologue EV ranging from $200 to $250 [5] Consumer Behavior - There is a growing consumer interest in the total cost of ownership of EVs, beyond just the initial purchase price, as indicated by a Bloomberg report forecasting higher EV sales in 2025 compared to 2024 [6] - Automakers are partnering with utility companies to provide incentives for home charging, such as free charging for 18 hours a day in Texas and cash back offers in New York [7][9] Technological Innovations - The introduction of vehicle-to-grid technology allows EV owners to sell electricity back to the grid, with Nissan offering $4,500 for connecting EV batteries in California [8][9] - Some automakers are enabling their EVs to serve as backup power sources for homes, providing additional value beyond the vehicle's MSRP [17][18] Market Outlook - A rebound in EV adoption is anticipated following the repeal of federal tax credits, with expectations of recovery in sales by 2026 [14][15] - American automakers are positioned advantageously due to their vehicles being designed for the American power grid, optimizing for off-peak electricity rates and offering features that enhance consumer trust and brand loyalty [16][19]

Core Insights - Ford Motor Company's President and CEO Jim Farley expressed that disassembling Tesla and Chinese competitors' vehicles was a humbling and shocking experience, prompting significant changes within Ford to enhance competitiveness in the electric vehicle (EV) market [1][3]. Group 1: Competitive Analysis - Ford discovered that Tesla's Model 3 has approximately 1.6 km less wiring compared to Ford's Mustang Mach-E, indicating a more efficient design [2]. - Similar findings were noted when comparing Ford's vehicles to those of Chinese EV manufacturers, highlighting a competitive disadvantage [2]. Group 2: Strategic Changes - The insights gained from the disassembly led to a restructuring at Ford, which has faced challenges in the competitive auto market [3]. - In 2022, Ford established its Model E division to focus on EV innovation, which has incurred costs of $5 billion by 2024, viewed by Farley as a challenge to be addressed [4]. Group 3: Commitment to EVs - Farley emphasized that Ford cannot abandon the EV segment, stating the necessity to remain competitive globally and not cede the market to Chinese manufacturers [5]. - In August 2025, Ford announced a $5 billion investment in EV production, which includes modifications to its manufacturing processes and upgrades to its Kentucky plant [5]. Group 4: Future Production Plans - The Kentucky plant, currently producing F-Series Super Duty trucks, is set to manufacture Ford's $30,000 electric pickup truck, scheduled for release in 2027 [6].

Core Insights - Tesla's Cybertruck chief, Siddhant Awasthi, is leaving the company after over eight years, marking a trend of high-profile departures within the automaker [1][3] - Awasthi played a significant role in leading the Cybertruck division from engineering to mass production and also managed the Model 3 program [1][6] - Tesla reported record deliveries in Q3, driven by a rush of American customers taking advantage of $7,500 tax credits for EV purchases, but analysts predict a significant sales decline in Q4 following the expiration of this incentive [2] Company Developments - The company has been offering substantial discounts on vehicles to boost sales amid a competitive landscape and executive turnover [3] - Recent executive departures include Troy Jones, the top sales executive in North America, and Jenna Ferrua, a human resources executive, alongside Milan Kovac, the top AI executive [3][7] - Increased competition from Chinese firms, particularly BYD, has posed challenges for Tesla, which has seen BYD surpass it as the world's largest EV manufacturer, achieving over $100 billion in revenue for the first time last year [7][8] Market Context - Tesla's Full Self-Driving technology and humanoid robots are seen as potential revenue drivers despite recent protests and vandalism against the company [10] - Elon Musk's recent $1 trillion pay package, the largest on record, is contingent on achieving ambitious performance metrics over the next decade [11]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: China Autos & Shared Mobility, specifically the Electric Vehicle (EV) sector in China [1][5] - **Market Sentiment**: The industry view is currently rated as "In-Line" by Morgan Stanley, indicating expectations of performance in line with the broader market [5][7] Core Insights - **Earnings Expectations**: - EV start-ups are anticipated to report 3Q results that align with market expectations, focusing on vehicle margins and operational expense control [7][10] - Investors are particularly interested in the operational turnaround of Original Equipment Manufacturers (OEMs) in 4Q and their strategies for model pipeline and pricing to counter cyclical challenges in 2026 [1][7] - **Performance Metrics**: - **XPeng Inc. (XPEV)**: Expected 3Q vehicle margin and 4Q volume outlook to be in line with previous guidance [10] - **Li Auto Inc. (LI)**: 3Q deliveries grew 12% QoQ to 116k units, with revenue projected at Rmb20.4 billion, indicating steady average selling price (ASP) [10] - **NIO Inc. (NIO)**: 3Q deliveries of 87k units (+21% QoQ) were at the low end of guidance, with revenue expected at Rmb21.9 billion [10] - **Future Projections**: - For 4Q, Li Auto is expected to deliver between 130-135k units, while NIO anticipates a significant increase to 150k units, driven by new model contributions [10][10] Financial Metrics - **Gross Profit Margins**: - Li Auto's vehicle gross profit margin is expected to grow to 14.5% in 3Q, while NIO's is projected to be flat at 12.5% [10] - **Operating Losses**: - Li Auto's net loss is expected to be around Rmb500 million in 3Q, similar to the previous quarter [10] - NIO's net loss is projected to narrow to approximately Rmb4.3 billion in 3Q [10] Valuation Methodology - **Li Auto Inc.**: Utilizes a probability-weighted Discounted Cash Flow (DCF) methodology with a WACC of 15.9% and a long-term growth rate of 3% [11] - **NIO Inc.**: Also employs a probability-weighted valuation methodology, expecting to break even by 2028 with a WACC of 17.8% [12] - **XPeng Inc.**: Similar DCF methodology with a terminal growth rate of 3% and a WACC of 12.8% [13] Risks and Opportunities - **Upside Risks**: - Rapid sales volume ramp-up and better-than-expected margins could enhance profitability [14][15] - **Downside Risks**: - Increased competition and moderating auto sales growth could pressure overall industry valuations [15][17] Additional Insights - **Investor Focus**: There is a growing emphasis on non-vehicle initiatives, including AI and software services, which may significantly impact stock valuations [7] - **Market Dynamics**: The cyclical nature of the automotive industry and the potential for macroeconomic shifts are critical factors influencing future performance [1][11] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the EV sector in China.

Core Insights - Rivian reported better-than-expected financial results, with a smaller loss of $0.65 per share compared to the anticipated loss of $0.72 per share, and revenue of $1.56 billion, slightly above expectations [1][2] Financial Performance - The company achieved a gross profit of $24 million in Q3, marking three out of the last four quarters with positive gross profit, and a gross margin of 2%, a significant improvement from a negative 45% in Q3 of the previous year [2] - Software and services revenue reached $154 million, contrasting with a loss of $13 million in Q3 of the previous year [2] Production and Guidance - Rivian reaffirmed its delivery guidance for the year, expecting between 415,000 and 435,000 deliveries, and projected a loss of $2.25 billion to $2.5 billion [3] - The company is on track to begin production of the R2 model in the middle of next year, supported by over $7 billion in cash or cash equivalents [5][9] Operational Efficiency - The company reported low costs of goods sold (COGS) per unit produced, indicating improved operational efficiency in plant operations and material costs [4] - Rivian has invested in over 2 million square feet of new infrastructure at its Illinois facility to support the ramp-up of R2 production [5] Market Challenges - The company acknowledged concerns regarding rare earth materials and the ongoing discussions between the U.S. and China, but stated that these issues have not yet impacted production [6][8] - Rivian is actively seeking alternative sources for rare earth metals and developing solutions that require fewer rare earth materials [8][9] Market Outlook - The company observed a pull-forward in demand in September due to the end of the Inflation Reduction Act (IRA), followed by a lull in October, but remains optimistic about long-term growth in the electric vehicle (EV) market [10]

Market Overview - The S&P 500 is approaching 7,000 and currently trades at a price-to-earnings ratio of 29, making it the second-most expensive in history according to the Shiller P/E ratio [1][2] General Motors (GM) - General Motors has recently seen a stock price increase following its third-quarter earnings report, benefiting from trends in the auto industry [3][4] - The shift in consumer demand away from electric vehicles (EVs) and the elimination of the $7,500 EV tax credit have positively impacted GM [4][5] - The U.S. government's introduction of a 3.75% offset on trucks manufactured in the U.S. provides GM with a competitive advantage over foreign automakers [5] - GM's third-quarter revenue fell slightly by 0.3% to $48.6 billion, exceeding estimates of $45.33 billion, while adjusted earnings per share (EPS) fell from $2.96 to $2.80, surpassing the consensus of $2.32 [7] - The estimated gross tariff impact for GM has been lowered to between $3.5 billion and $4.5 billion, and the full-year adjusted EPS guidance has been raised to a range of $9.75 to $10.50 [8] - GM's stock trades at a price-to-earnings ratio of less than 7, with a history of stock buybacks reducing shares outstanding by 15% over the last year [8][9] Deckers Outdoor (DECK) - Deckers Outdoor, known for brands like Hoka and Ugg, has faced challenges, with its stock down over 50% from its peak earlier this year due to tariff pressures and consumer spending headwinds [10][11] - The stock currently trades at a price-to-earnings ratio of 14, based on an EPS forecast of $6.30 to $6.39 [11] - Domestic sales declined by 1.7% in the quarter, and the company faces an estimated $150 million headwind from tariffs [12] - Despite short-term challenges, international sales increased by 29.3% to $591.3 million, accounting for over 40% of revenue [15] - The wholesale revenue improved by 13.4%, and core brands experienced double-digit growth, although Ugg sales are expected to slow [15][16] - Deckers has a strong track record in managing footwear brands and is expected to return to steady bottom-line growth in the long term, making its current price a discount [16]

Core Insights - Ford has lowered its outlook despite beating Q3 expectations, with shares reaching a 52-week high, indicating strong market performance [1][2]. Financial Performance - Ford exceeded Q3 expectations on both revenue and earnings, attributed partly to better-than-expected management of tariff impacts [2][3]. - The anticipated tariff impact for Ford has been revised down from $2.5 billion to approximately $1 billion [3]. Tariff Impact - General Motors has also reduced its expected tariff impact for the year from $4 to $5 billion to a range of $3.5 to $4.5 billion [4][5]. - Both Ford and GM are experiencing increased demand for trucks and SUVs, which is contributing to their positive financial outlook [7]. Production Plans - Ford confirmed that its plans to build Superduty pickup trucks in Oakville, Ontario, remain unchanged despite ongoing production in Canada and Mexico [6]. - The companies are not halting production in Canada and Mexico, indicating a balanced approach to manufacturing [5][6]. Electric Vehicle Market - The share of electric vehicles (EVs) in the U.S. market is expected to stabilize around 5% to 6%, with a need for more offerings in the $35,000 to $45,000 price range to drive demand [7][8].

Core Insights - Ford reported strong earnings, beating expectations on both revenue and profit, but lowered guidance due to operational disruptions caused by a fire at their primary aluminum supplier's manufacturing plant [1][3][13] - The automotive industry is currently focused on gauging demand for both internal combustion and electric vehicles (EVs), adjusting pricing strategies, and aligning cost structures amid increasing global competition [2][4] Financial Performance - Ford and GM both had strong quarterly results, with significant sales in trucks and SUVs contributing to positive market reactions [3][7] - Ford's stock saw a notable increase of 9.5% following the earnings report, indicating investor confidence despite the challenges faced [14] Industry Challenges - The automotive supply chain, particularly among smaller tier 2 to tier 4 suppliers, is under significant strain due to recent challenges such as COVID-19 and semiconductor shortages, leading to some high-profile bankruptcies [8][9] - The industry is experiencing a gradual growth in the EV market, although at a slower pace than previously anticipated, resulting in impairment charges for major automakers [6][12] Market Dynamics - The government has extended tariff relief on imported parts, providing an advantage to domestic manufacturers like Ford and GM, especially for medium and heavy-duty trucks [3][4] - There is a concern regarding the potential impact of rising subprime delinquencies, although they currently represent a small percentage of the overall automotive financing market [11][12] Supply Chain Issues - The fire at the aluminum supplier's plant is expected to have a less severe impact than initially feared, with operations anticipated to resume by the end of the year [13] - A new semiconductor issue is emerging, which could pose significant challenges for the industry, potentially more impactful than previous shortages [13]

Core Insights - The company is facing challenges due to a fire at an aluminum plant, which is expected to impact production by around 100,000 units this year, but recovery is anticipated next year with potential gains of $1.5 billion to $2.5 billion [2][3][4] - Tariff headwinds have been significantly reduced, from an expected $2 billion to a more manageable level, benefiting the company as it produces a majority of its vehicles domestically [3][4][8] - The company is focusing on high-margin vehicles and off-road segments, which are currently in high demand, indicating a strong market position [14][17] Production and Financial Impact - The fire incident is described as a serious situation, but the company is optimistic about regaining lost production in the following year [2][3] - The reduction in tariffs is seen as a major advantage, particularly for the company's domestic production capabilities compared to competitors [4][7][8] - The company is expected to maintain a strong financial outlook with anticipated recovery in production and sales [2][14] Market Position and Strategy - The company produces 80% of its sales in the U.S., with a significant portion of exports, positioning it favorably against competitors [7][8] - There is a strong focus on high-end and off-road vehicles, which are profitable and popular among consumers, indicating a strategic shift towards these segments [14][17] - The company is also investing in the electric vehicle market, with plans for affordable EVs, reflecting a commitment to adapt to changing market dynamics [21][23] Supply Chain and Raw Materials - The company is actively working to diversify its supply chain for critical materials, including rare earth elements and semiconductors, which are essential for production [23][24][25] - There is recognition of the challenges posed by reliance on foreign sources for raw materials, particularly from China, and efforts are being made to address these issues [23][25][26]