Sector Spotlight: Automakers get rare earth export license clearance from China
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AUTO SECTOR NEWS: Tesla (TSLA) upgraded its Model S and Model X cars in the U.S. and raised the prices of all configurations of the two models by $5,000, Reuters reported.
The NHTSA announced the next step in its new Automated Vehicle Framework. 'To facilitate automated driving systems technology reaching its full potential to transform roadway safety, NHTSA is streamlining its exemption process for commercial deployment of vehicles and adopting a dynamic and flexible approach to evaluating these exemptions. These improvements will allow NHTSA to process ADS and other exemptions more quickly while also allowing NHTSA to prioritize safety through a tailored and progressive operational oversight approach,' the agency said.
Tesla has filed a lawsuit against former Optimus engineer Zhongjie Li, who worked at Tesla from 2022 to 2024, accusing him of stealing humanoid robot information and setting up a rival startup, Bloomberg's Dana Hull wrote. 'Less than a week after he left Tesla, Proception was incorporated,' according to the complaint. 'And within just five months, Proception publicly claimed to have 'successfully built' advanced humanoid robotic hands — hands that bear a striking resemblance to the designs Li worked on at Tesla.'
President Trump received a phone call from Tesla CEO Elon Musk late on Monday night, which led to a public expression of regret from Musk overnight for his social media posts, Jonathan Swan and Theodore Schleifer of New York Times reported, citing three people briefed on the call. Musk's call came after he spoke privately on Friday with Vice President JD Vance and the White House chief of staff, Susie Wiles, about a path to a truce between the two men.
In a post on X, Tesla CEO Musk responded to question about when the first public robotaxi rides will start, stating: 'Tentatively, June 22. We are being super paranoid about safety, so the date could shift. First Tesla that drives itself from factory end of line all the way to a customer house is June 28.'
Nissan (NSANY) supplier Marelli Holdings announced that it has commenced voluntary chapter 11 cases in the United States Bankruptcy Court for the District of Delaware in order to comprehensively restructure its long-term debt obligations. Approximately 80% of the company's lenders have signed an agreement to support the restructuring, which will deleverage Marelli's balance sheet and strengthen its liquidity position. Throughout this process and moving forward, Marelli does not expect any operational impact from the chapter 11 process, and the company 'will continue to work closely with its customers, suppliers, and partners to innovate and invest in its portfolio of advanced technologies that will differentiate the vehicles of the future and transform mobility,' it said.
General Motors (GM) announced plans to invest about $4B over the next two years in its domestic manufacturing plants to increase U.S. production of both gas and electric vehicles. The new investment will give GM the ability to assemble more than two million vehicles per year in the U.S. This announcement comes on the heels of the company's recently announced plan to invest $888M in the Tonawanda Propulsion plant near Buffalo, New York to support GM's next-generation V-8 engine.
Intrado Life & Safety and Toyota Connected North America announced a collaboration to provide Advanced Automatic Collision Notification, telematics data to public safety answering points in an i3-compliant format. The data, delivered via AT&T's nationwide ESInet solution, helps 9-1-1 telecommunicators quickly deploy appropriate emergency response resources based on accident severity.
Daimler Truck AG (DTRUY), Mitsubishi Fuso Truck and Bus Corporation, Hino Motors, and Toyota (TM) concluded definitive agreements for the integration of Mitsubishi Fuso and Hino. Mitsubishi Fuso and Hino will integrate on an equal footing and cooperate in the areas of commercial vehicle development, procurement, and production. They are aiming to start operations in April 2026. Daimler Truck and Toyota will each aim to own 25% of the listed holding company of the integrated Mitsubishi Fuso and Hino. The holding company plans to own 100% of Mitsubishi Fuso and Hino. The intention is to list the holding company on the Prime Market of the Tokyo Stock Exchange. Further details on the scope and nature of the collaboration, including the name of the new holding company, are intended to be announced over the coming months, the companies stated.
One of Tesla's top AI-executives, VP of engineering Milan Kovac, has left the company, a setback for the Optimus robotics project, Becky Peterson of The Wall Street Journal wrote. Kovac oversaw Tesla's development of Optimus, a humanoid robot central to Musk's vision of transforming Tesla into a robotics and AI company.
China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers as supply chain disruptions begin to surface from the country's export curbs on those materials, Reuters' Laurie Chen and David Shepardson reported. At least some of the licenses are valid for six months, the two sources say. It is unclear what quantity or items are covered by the approval Suppliers of General Motors (GM), Ford (F), and Stellantis (STLA) received clearance for some rare earth export licenses on Monday, one source said.
ANALYST COMMENTARY: Guggenheim said that while Tesla shares continue to be driven by robotaxi and political narratives in the near-term, the company's fundamentals 'continue to deteriorate at an alarming rate.' The 'soft' Q2 delivery trends confirm demand for the refreshed Model Y has not helped Tesla's sales momentum, says Guggenheim, which expects 'sizable' negative revisions in the coming weeks to Q2 delivery estimates. The firm's 360,000 estimate is well below the consensus of 415,000. Flowing through lower delivery forecasts for Q2 pushes the company's auto gross margin forecast to 11.5%, below the 14.0% consensus, and free cash flow forecast into negative territory, the analyst told. Guggenheim believes Tesla's Q2 should have benefited from pent-up demand for the Model Y refresh, suggesting future delivery volumes and/or pricing could deteriorate further. It believes 2025 and 2026 expectations for Tesla 'remain incredibly optimistic and bullish catalysts for the automotive business continue to be disproven.'
Piper Sandler kept an Overweight rating with a $400 price target on Tesla, but contends that the stock will likely sustain its upward momentum over the coming weeks. Driverless Teslas have been spotted on the streets of Austin, Texas and CEO Musk has acknowledged the deployment while predicting licensing agreements, with the 'key component' of the firm's bullish thesis has started to play out, the analyst tells investors in a research note. Piper warns however that any high-profile robotaxi accidents would likely be met with 'violent downside'.
Argus downgraded Tesla to Hold from Buy with no price target. The stock 'appears to be currently trading on non-fundamental events,' says the analyst, who is concerned that the 'war of words' between President Trump and Tesla CEO Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas. While the firm believes AI-related projects such as Cybercab and Optimus are positive for the company and its valuation, it believes a near-term Hold rating is 'prudent at this time,' the analyst said.
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