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The Kyza Creates A Concept To Make The M2 CS Look Tame

The Kyza Creates A Concept To Make The M2 CS Look Tame

Miami Herald12-06-2025
Khyzyl Saleem, better known as 'The Kyza,' is a sometimes controversial character. He's designed wacky cars for videogames, some of which occasionally come to life, and he's part of the TWR Supercat project that gives the old Jaguar XJS a whole new attitude far beyond anything the original creators could have imagined. Some love his work, and others hate it - something he's fine with, by the way. The same goes for BMW M cars, and the oddly styled G87 M2, in particular. So what happens when a controversial virtual render artist and designer tries to improve one of the most controversial designs of the modern era? Perhaps somewhat surprisingly, something racier than even the new M2 CS, yet also something more elegant. It sounds like a contradiction, and it is to a degree, but just look at what The Kyza has dubbed the M2-KS. It's hardcore, yet stylish.
Back in 2016, BMW created the 2002 Hommage Concept for its annual Villa d'Este showcase, which, as its name implies, paid tribute to the brilliant 2002, which arrived in 1971 (though the 02 series of cars with smaller engines had been around since 1966). With his new render, Saleem has maintained most of the underlying structure of the G87, but in replacing the box flares that come standard on the M2, he's also widened the track. This widening has been applied to the front and rear fascias, too, and that's how the 2002 influence is injected; new shrouds for the headlights create a sleeker, more aggressive look. The squared intake vents and false rear vents have been swapped for more angular and aggressive pieces, and the sides of the car gain additional vents and intakes. Finally, a wider and larger set of concave 827M wheels fills he arches in the same bronze as current CS-badged Bimmers.
The NACA duct on the hood, the vents behind it, the massive rear spoiler, and the excessive vents along the side of the vehicle (and even below the taillights) are too much for BMW to ever embrace, but something must be said for how much better the M2 can look with some softer lines. Someday, the eventual replacement for the G87 will have a cleaner look, with inspiration from the Vision Neue Klasse concept. Until then, all we can do is wait. Unless, of course, The Kyza gets enough interest in this look. After all, his Live To Offend bodykit brand has brought wild interpretations of the E36 to life, as well as the E30.
Copyright 2025 The Arena Group, Inc. All Rights Reserved.
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Please refer to the header captioned 'Discussion Regarding the Use of Non-GAAP Financial Measures' in this release for a further discussion of our use of non-GAAP measures. For the third quarter of 2025, indie expects revenue between $52 million and $56 million, or $54 million at the midpoint, with Non-GAAP gross margin in the range of 49% to 50%. indie's Q2 2025 Conference Call indie Semiconductor will host a conference call with analysts to discuss its second quarter 2025 results and business outlook today at 5:00 p.m. Eastern time. To listen to the conference call via the Internet, please go to the Financials tab on the Investors page of indie's website. To listen to the conference call via telephone, please call (877) 451-6152 (domestic) or (201) 389-0879 (international), Conference ID: 13754371. A replay of the conference call will be available beginning at 9:00 p.m. Eastern time on August 7, 2025, until 11:59 p.m. Eastern time on August 21, 2025, under the Financials tab on the Investors page of indie's website, or by calling (844) 512-2921 (domestic) or (412) 317-6671 (international), Access ID: 13754371. About indie Headquartered in Aliso Viejo, CA, indie is empowering the automotive revolution with next generation semiconductors, photonics and software platforms. We focus on developing innovative, high-performance and energy-efficient technology for ADAS, in-cabin user experience and electrification applications. Our mixed-signal SoCs enable edge sensors spanning Radar, LiDAR, Ultrasound, and Computer Vision, while our embedded system control, power management and interfacing solutions transform the in-cabin experience and accelerate increasingly automated and electrified vehicles. As a global innovator, we are an approved vendor to Tier 1 partners and our solutions can be found in marquee automotive OEMs worldwide. Please visit us at to learn more. Safe Harbor Statement This communication contains 'forward-looking statements' (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended). Such statements can be identified by words such as 'will likely result,' 'expect,' 'anticipate,' 'estimate,' 'believe,' 'intend,' 'plan,' 'project,' 'outlook,' 'should,' 'could,' 'may' or words of similar meaning and include, but are not limited to, statements regarding our future business and financial performance and prospects, including statements regarding our continued progress towards profitability, momentum in ADAS, our growth, particularly in radar and vision, the timing of production for radar based on global field trials, the acquisition of emotion3D (the "Acquisition"), the expected timing to close the Acquisition, and the accretive nature of the Acquisition, and the potential sale of our partially-owned Chinese subsidiary, or alternatively an IPO exit in China, and expected use of proceeds, if any. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results included in such forward-looking statements. In addition to the factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 3, 2025 and in our other public reports filed with the SEC (including those identified under 'Risk Factors' therein), the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: macroeconomic conditions, including inflation, rising interest rates and volatility in the credit and financial markets, our reliance on contract manufacturing and outsourced supply chain and the availability of semiconductors and manufacturing capacity; competitive products and pricing pressures; our ability to win competitive bid selection processes and achieve additional design wins; the impact of recent acquisitions made and any other acquisitions we may make, including our ability to successfully integrate acquired businesses and risks that the anticipated benefits of any acquisitions may not be fully realized or take longer to realize than expected; our ability to develop, market and gain acceptance for new and enhanced products and expand into new technologies and markets; current and potential trade restrictions and trade tensions, including trade and tariff actions taken or proposed by the US government affecting the countries where we operate and political or economic instability in our target markets. All forward-looking statements in this press release are expressly qualified in their entirety by the foregoing cautionary statements. Investors are cautioned not to place undue reliance on the forward-looking statements in this press release, which information set forth herein speaks only as of the date hereof. We do not undertake, and we expressly disclaim, any intention or obligation to update any forward-looking statements made in this announcement or in our other public filings, whether as a result of new information, future events or otherwise, except as required by law. #indieSemi_Earnings INDIE SEMICONDUCTOR, INC. PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share amounts) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue: Product revenue $ 49,720 $ 49,009 $ 100,140 $ 97,587 Contract revenue 1,914 3,346 5,571 7,121 Total revenue 51,634 52,355 105,711 104,708 Operating expenses: Cost of goods sold 30,693 30,241 62,221 60,330 Research and development 38,472 41,301 80,587 90,890 Selling, general, and administrative 18,355 17,447 37,722 39,769 Restructuring costs 7,107 — 7,107 — Total operating expenses 94,627 88,989 187,637 190,989 Loss from operations (42,993 ) (36,634 ) (81,926 ) (86,281 ) Other income (expense), net: Interest income 2,226 1,076 4,493 2,385 Interest expense (4,527 ) (2,134 ) (9,043 ) (4,240 ) Gain from change in fair value of contingent considerations and acquisition-related holdbacks 90 17,331 4,893 32,690 Gain from extinguishment of debt 2,623 — 2,623 — Other income (expense) 1,528 (553 ) 792 (800 ) Total other income, net 1,940 15,720 3,758 30,035 Net loss before income taxes (41,053 ) (20,914 ) (78,168 ) (56,246 ) Income tax benefit (provision) (565 ) (86 ) (621 ) 1,023 Net loss (41,618 ) (21,000 ) (78,789 ) (55,223 ) Less: Net loss attributable to noncontrolling interest (2,580 ) (1,840 ) (5,205 ) (4,884 ) Net loss attributable to indie Semiconductor, Inc. $ (39,038 ) $ (19,160 ) $ (73,584 ) $ (50,339 ) Net loss attributable to common shares — basic $ (39,038 ) $ (19,160 ) $ (73,584 ) $ (50,339 ) Net loss attributable to common shares — diluted $ (39,038 ) $ (19,160 ) $ (73,584 ) $ (50,339 ) Net loss per share attributable to common shares — basic $ (0.20 ) $ (0.11 ) $ (0.38 ) $ (0.30 ) Net loss per share attributable to common shares — diluted $ (0.20 ) $ (0.11 ) $ (0.38 ) $ (0.30 ) Weighted average common shares outstanding — basic 195,370,583 170,164,241 193,234,270 167,384,295 Weighted average common shares outstanding — diluted 195,370,583 170,164,241 193,234,270 167,384,295 Expand INDIE SEMICONDUCTOR, INC. PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) June 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 192,560 $ 274,248 Restricted cash 10,293 10,300 Accounts receivable, net of allowance for doubtful accounts 59,134 52,005 Inventory 47,028 49,887 Prepaid expenses and other current assets 22,745 22,308 Total current assets 331,760 408,748 Property and equipment, net 40,628 34,281 Intangible assets, net 198,540 208,944 Goodwill 276,240 266,368 Operating lease right-of-use assets 14,590 16,107 Other assets and deposits 5,872 6,938 Total assets $ 867,630 $ 941,386 Liabilities and stockholders' equity Accounts payable $ 19,667 $ 28,326 Accrued payroll liabilities 16,880 5,573 Contingent considerations 283 3,589 Accrued expenses and other current liabilities 20,496 29,297 Intangible asset contract liability 4,928 5,875 Current debt obligations 14,227 12,220 Total current liabilities 76,481 84,880 Long-term debt, net of current portion 338,226 369,097 Intangible asset contract liability, net of current portion 9,221 11,965 Deferred tax liabilities, non-current 12,900 11,660 Operating lease liability, non-current 13,291 14,278 Other long-term liabilities 2,415 4,111 Total liabilities 452,534 495,991 Commitments and contingencies Stockholders' equity Preferred stock — — Class A common stock 20 19 Class V common stock 2 2 Additional paid-in capital 963,886 936,564 Accumulated deficit (567,628 ) (494,044 ) Accumulated other comprehensive loss (5,873 ) (24,655 ) indie's stockholders' equity 390,407 417,886 Noncontrolling interest 24,689 27,509 Total stockholders' equity 415,096 445,395 Total liabilities and stockholders' equity $ 867,630 $ 941,386 Expand INDIE SEMICONDUCTOR, INC. RECONCILIATION OF PRELIMINARY NON-GAAP MEASURES TO GAAP (Unaudited) GAAP refers to financial information presented in accordance with U.S. Generally Accepted Accounting Principles. This press release includes non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission. We believe that our presentation of non-GAAP financial measures provides useful supplementary information to investors. The presentation of non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP. The reconciliations of our preliminary GAAP to non-GAAP measures are as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Computation of non-GAAP gross margin: GAAP revenue $ 51,634 $ 52,355 $ 105,711 $ 104,708 GAAP cost of goods sold 30,693 30,241 62,221 60,330 Acquisition related expenses (110 ) (109 ) (219 ) (219 ) Amortization of intangible assets (4,172 ) (3,727 ) (8,012 ) (7,462 ) Inventory cost realignments — — — (145 ) Share-based compensation (125 ) (388 ) (418 ) (488 ) Non-GAAP gross profit $ 25,348 $ 26,338 $ 52,139 $ 52,692 Non-GAAP gross margin 49.1 % 50.3 % 49.3 % 50.3 % Expand Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Computation of non-GAAP operating loss: GAAP loss from operations $ (42,993 ) $ (36,634 ) $ (81,926 ) $ (86,281 ) Acquisition related and other non-recurring professional expenses 63 558 223 1,753 Amortization of intangible assets 6,532 5,970 12,501 11,741 Inventory cost realignments — — — 145 Share-based compensation 14,759 12,900 32,502 38,284 Restructuring 7,107 — 7,107 — Non-GAAP operating loss $ (14,532 ) $ (17,206 ) $ (29,593 ) $ (34,358 ) Expand Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Computation of non-GAAP net loss: Net loss $ (41,618 ) $ (21,000 ) $ (78,789 ) $ (55,223 ) Acquisition related and other non-recurring professional expenses 63 558 223 1,753 Amortization of intangible assets 6,532 5,970 12,501 11,741 Inventory cost realignments — — — 145 Share-based compensation 14,759 12,900 32,502 38,284 Restructuring 7,107 — 7,107 — Gain from change in fair value of contingent considerations and acquisition-related holdbacks (90 ) (17,331 ) (4,893 ) (32,690 ) Gain from extinguishment of debt (2,623 ) — (2,623 ) — Other (income) expense (1,528 ) 553 (792 ) 800 Non-cash interest expense 672 265 1,329 515 Income tax (benefit) provision 565 86 621 (1,023 ) Non-GAAP net loss $ (16,161 ) $ (17,999 ) $ (32,814 ) $ (35,698 ) Expand Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Computation of non-GAAP EBITDA: Net loss $ (41,618 ) $ (21,000 ) $ (78,789 ) $ (55,223 ) Interest income (2,226 ) (1,076 ) (4,493 ) (2,385 ) Interest expense 4,527 2,134 9,043 4,240 Gain from change in fair value of contingent considerations and acquisition-related holdbacks (90 ) (17,331 ) (4,893 ) (32,690 ) Gain from extinguishment of debt (2,623 ) — (2,623 ) — Other (income) expense (1,528 ) 553 (792 ) 800 Acquisition related and other non-recurring professional expenses 63 558 223 1,753 Depreciation and amortization 8,587 7,393 16,482 14,700 Inventory cost realignments — — — 145 Share-based compensation 14,759 12,900 32,502 38,284 Restructuring 7,107 — 7,107 — Income tax (benefit) provision 565 86 621 (1,023 ) Non-GAAP net loss $ (12,477 ) $ (15,783 ) $ (25,612 ) $ (31,399 ) Expand For the Three Months Ended June 30, 2025 Computation of non-GAAP share count: Weighted Average Class A common stock - Basic 195,370,583 Weighted Average Class V common stock - Basic 17,621,251 Escrow Shares 1,725,000 TeraXion Unexercised Options 605,734 Non-GAAP share count 215,322,568 Non-GAAP net loss $ (16,161 ) Less: Non-GAAP net income attributable to noncontrolling interest in Wuxi 1,224 Non-GAAP net loss attributable to indie Semiconductor, Inc. $ (17,385 ) Non-GAAP net loss per share attributable to indie Semiconductor, Inc. $ (0.08 ) Expand Discussion Regarding the Use of Non-GAAP Financial Measures Our earnings release contains some or all of the following financial measures that have not been calculated in accordance with United States Generally Accepted Accounting Principles ('GAAP'): (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating loss, (iii) non-GAAP net loss, (iv) non-GAAP EBITDA, (v) non-GAAP share count, (vi) non-GAAP net loss and (vii) non-GAAP net loss per share. As set forth in the tables above, we derive such non-GAAP financial measures by excluding certain expenses and other items from the respective GAAP financial measure that is most directly comparable to each non-GAAP financial measure. Management may use these non-GAAP financial measures to, amongst other things, evaluate operating performance and compare it against past periods or against peer companies, make operating decisions, forecast for future periods and to determine payments under compensation programs. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods and competitors more difficult, obscure trends in ongoing operations or improve management's ability to forecast future periods. We provide investors with non-GAAP gross profit and gross margin, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share because we believe it is important for investors to be able to closely monitor and understand changes in our ability to generate income from ongoing business operations. We believe these non-GAAP financial measures give investors an additional method to evaluate historical operating performance and identify trends, an additional means of evaluating period-over-period operating performance and a method to facilitate certain comparisons of our operating results to those of our peer companies. We further believe these non-GAAP financial measures allow investors to assess the overall financial performance of our ongoing operations by eliminating the impact of (i) acquisition-related and other non-recurring professional expenses (including acquisition-related or other non-recurring professional fees and legal expenses, deemed compensation expense and expenses recognized in relation to changes in contingent consideration obligations), (ii) amortization of acquisition-related intangibles and certain license rights, (iii) inventory cost realignments, (iv) restructuring costs, (v) gains or losses recognized in relation to changes in the fair value of warrants, contingent considerations issued by indie, acquisition-related holdbacks and unrealized gains or losses from currency hedging contracts, (vi) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (vii) share-based compensation, and (viii) income tax benefit (provision). We believe that disclosing these non-GAAP financial measures contributes to enhanced financial reporting transparency and provides investors with added clarity about complex financial performance measures. We do not report a GAAP measure of gross profit or gross margin because certain costs related to contract revenues are expensed as incurred and included in research and development expenses, and not in cost of sales, as it is not practicable for us to bifurcate these expenses. We derive and reconcile non-GAAP gross profit from the most relevant GAAP financial measures by subtracting GAAP cost of sales, adjusted for acquisition-related and other non-recurring professional expenses and share-based compensation, from GAAP revenue. We calculate non-GAAP operating loss by excluding from GAAP operating loss, any (i) acquisition-related and other non-recurring professional expenses (including acquisition-related or other non-recurring professional fees and legal expenses, deemed compensation expense and expenses recognized in relation to changes in contingent consideration obligations), (ii) amortization of acquisition-related intangibles and certain license rights, (iii) inventory cost realignments, (iv) restructuring costs and (v) share-based compensation. We calculate non-GAAP net loss by excluding from GAAP net income (loss), any (i) acquisition-related and other non-recurring professional expenses (including acquisition-related or non-recurring professional fees and legal expenses, deemed compensation expense and expenses recognized in relation to changes in contingent consideration obligations), (ii) amortization of acquisition-related intangibles and certain license rights, (iii) inventory cost realignments, (iv) restructuring costs, (v) gains or losses recognized in relation to changes in the fair value of warrants, contingent considerations issued by indie, acquisition-related holdbacks and unrealized gains or losses from currency hedging contracts, (vi) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (vii) share-based compensation, and (viii) income tax benefit (provision). We calculate non-GAAP EBITDA by excluding from GAAP net income (loss), any (i) acquisition-related and other non-recurring professional expenses (including acquisition-related or non-recurring professional fees and legal expenses, deemed compensation expense and expenses recognized in relation to changes in contingent consideration obligations), (ii) amortization of acquisition-related intangibles and certain license rights, (iii) depreciation of fixed assets, (iv) inventory cost realignments, (v) restructuring costs, (vi) gains or losses recognized in relation to changes in the fair value of warrants, contingent considerations issued by indie, acquisition-related holdbacks and unrealized gains or losses from currency hedging contracts, (vii) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (viii) share-based compensation, and (ix) income tax benefit (provision). We calculate non-GAAP share count by adding (i) weighted average Class A common stock, (ii) weighted average Class V common stock held by minority shareholders, which are exchangeable into Class A common stock, (iii) Escrow Shares and (iv) vested but unexercised options issued as part of the TeraXion acquisition. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by non-GAAP share count. We exclude the items identified above from the respective non-GAAP financial measure referenced above for the reasons set forth with respect to each such excluded item below: Acquisition-related and other non-recurring professional expenses - including such items as, when applicable, fair value charges incurred upon the sale of acquired inventory, accounting impact to the cost of goods sold due to one-time inventory costing realignment with a specific supplier, acquisition-related professional fees and legal expenses and other professional fees that are non-recurring in nature because they are not considered by management in making operating decisions and we believe that such expenses do not have a direct correlation to our future business operations and thereby including such charges do not necessarily reflect the performance of our ongoing operations for the period in which such charges or reversals are incurred. Amortization expenses - related to the amortization expense for acquired intangible assets and certain license rights. Depreciation expenses - related to the depreciation expenses for all property and equipment on hand. Inventory cost realignments - related to the supplier allocation premiums introduced during COVID that is currently incorporated in our inventory cost but have since been eliminated going forward. The impact of this premium is deemed non-recurring and therefore not considered by management in its evaluation of the ongoing performance of the business. Share-based compensation - related to the non-cash compensation expense associated with equity awards granted to our employees (including those granted in lieu of cash compensation) and employer tax related to employee stock transactions. These expenses are not considered by management in making operating decisions and such expenses do not have a direct correlation to our future business operations. Restructuring costs - related to the one-time expenses the Company incurs to reorganize its operations, which is primarily related to workforce reduction, long-lived intangible asset impairment, facilities and other purchase commitment charges. Gain (loss) from change in fair values - because these adjustments (1) are not considered by management in making operating decisions, (2) are not directly controlled by management, (3) do not necessarily reflect the performance of our ongoing operations for the period in which such charges are recognized and (4) cannot make comparisons between peer company performance less reliable. Non-cash interest expense - related to the amortization of debt discounts and issuance costs because (1) these expenses are not considered by management in making decision with respect to financing decisions, and (2) these generally reflect non-cash costs. Income tax benefit (provision) - related to the estimated income tax benefit (provision) that does not result in a current period tax refunds (payments). The non-GAAP financial measures presented should not be considered in isolation and are not an alternative for the respective GAAP financial measure that is most directly comparable to each such non-GAAP financial measure. Investors are cautioned against placing undue reliance on these non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures to arrive at these non-GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures are likely to have limited value for purposes of drawing comparisons between companies as a result of different companies potentially calculating similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP EBITDA is calculated by removing non-recurring, irregular and one-time items that may distort EBITDA, to the current non-GAAP financial measures. We calculate non-GAAP EBITDA by excluding from GAAP net income (loss), any (i) acquisition-related and other non-recurring expenses (including acquisition-related or other non-recurring professional fees and legal expenses, deemed compensation expense and expenses recognized in relation to changes in contingent consideration obligations), (ii) amortization of acquisition-related intangibles and certain license rights, (iii) depreciation of property, plant and equipment, (iv) inventory cost realignments, (v) restructuring costs, (vi) gains or losses recognized in relation to changes in the fair value of warrants, contingent considerations issued by indie, acquisition-related holdbacks and unrealized gains or losses from currency hedging contracts, (vii) non-cash interest expenses related to the amortization of debt discounts and issuance costs, (viii) share-based compensation, and (viii) income tax benefit (provision). To the extent our disclosures contain forward-looking estimates of non-GAAP financial measures, such as our forward-looking outlook for non-GAAP EBITDA, these measures are provided to investors on a prospective basis for the same reasons (set forth above) we provide them to investors on a historical basis. We are generally unable to provide a reconciliation of our forward-looking non-GAAP measures because certain information needed to make a reasonable forward-looking estimate of such non-GAAP measures are difficult to predict and estimate and is often dependent on future events that may be uncertain or outside of our control and, therefore, is not available without unreasonable efforts. Such events may include unanticipated changes in our GAAP effective tax rate, unanticipated one-time charges related to asset impairments (fixed assets, inventory, intangibles, or goodwill), unanticipated acquisition-related and other non-recurring professional expenses, unanticipated settlements, gains, losses and impairments and other unanticipated items not reflective of ongoing operations. Our forward-looking estimates of both GAAP and non-GAAP measures of our financial performance may differ materially from our actual results and should not be relied upon as statements of fact.

U.S. Tariff Snags Add To Europe Carmakers' Weak Sales, China Woes
U.S. Tariff Snags Add To Europe Carmakers' Weak Sales, China Woes

Forbes

time2 days ago

  • Forbes

U.S. Tariff Snags Add To Europe Carmakers' Weak Sales, China Woes

Europe's carmakers, facing weaker sales and increased Chinese competition, will now have an added burden from U.S. tariff challenges. Sales of sedans and SUVs in Western Europe will likely slip about 2% in 2025, according to Auto Forecast Solutions, while GlobalData expects a 1.4% decline to 11.4 million. That compares with stagnation in 2024 and a big jump in 2023 of nearly 14% after the Covid pandemic. Current sales are still about 3 million shy of pre-Covid. 'Difficulty in foreseeing growth in exports after the U.S. trade deal means the local market will grow slowly over the next few years,' Auto Forecast Solutions said in its latest monthly report. Western Europe includes the big 5 markets of Germany, France, Britain, Italy and Spain. European manufacturers' second quarter financial reports included weaker profits, huge losses, and profit warnings. BMW was hurt the least as its profits declined, although the 5.4% margin was within its guidance. Mercedes cut its profit guidance. Volkswagen took a €1.3 billion ($1.5 billion) hit from tariff issue problems and cut its profit forecast. Multi-brand Stellantis lost €2.3 billion ($2.7 billion) in the first half. Volvo announced a $1 billion operating loss in the second quarter. Renault reported a net loss of €11.2 billion ($13.0 billion) in the first half. Second-quarter poor but could worsen HSBC Global Investment Research called second-quarter results disappointing but things could get worse. 'A tough quarter but it might not be the watershed we hoped for,' HSBC said in a report. HSBC said the reasons were varied, including pricing in the EU and soft volumes. The EU tariff deal with the U.S. was welcomed because it lowered tariffs from the proposed 27.5% to 15%. This compared with the previous 2.5%. 'But most of the carmakers were hoping for something more generous that reflected U.S. exports from BMW and Mercedes, or inward investment in the U.S. for VW.,' according to the report. Perhaps the Europeans should take some comfort after a report from the Wall Street Journal on Thursday which said automakers will take a collective set of losses totalling almost $12 billion from what it called the 'tariff wars'. Many foreign manufacturers will need to move production to the U.S., it said. The list was headed by Toyota with losses of just over $3 billion. Volkswagen was way back in second place on the list with losses about half that, with GM and Ford red ink close to $1 billion. 'Beyond the continuing cost of tariffs, automakers in the U.S., Japan, South Korea and Europe face years of retooling and supply-chain tweaks to adjust to the new realities,' according to the WSJ's Stephen Wilmot. Mergers, or the demise of weaker brands In Europe, manufacturers are being pressured by European Union rules designed to force all new car buyers into electric vehicles by 2035 and 80% by 2030. The rules were set up despite China's clear advantage in EV technology. This will put huge pressure on European profits as they struggle to meet ever-tighter CO2 emissions rules while being forced to shed big profit-making internal combustion engine-powered vehicles. This is likely to force weaker participants into mergers or may see the demise of marginal brands. Meanwhile, the Trump Administration has dumped its mandates to force buyers into EVs. This means that instead of previously mandated 50% share of EV new car sales by 2030, the market will allow consumers to decide, and market share is likely to be closer to 20%. Some politicians in the European Parliament are seeking to dilute EU rules. This may become more urgent if important European manufacturers look to be in danger of collapse at the expense of Chinese success.

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