Latest news with #PaulJacobson
Yahoo
a day ago
- Automotive
- Yahoo
TechCrunch Mobility: Tesla vs GM: A tale of two earnings
Welcome back to TechCrunch Mobility, your central hub for news and insights on the future of transportation. Sign up here for free — just click TechCrunch Mobility! The poll results are in (from last week's edition) and it's clear what you want: Analysis with a capital A. You also want scoops, a bit of a news roundup, and deals, but far and away you're looking for analysis. I've always sprinkled my thoughts and insights throughout the newsletter, but over the next few weeks and months you'll see me push further into analysis. On that note, earnings season is upon us and two stood out to me: GM and Tesla. Both companies are facing pressure from tariffs. And while GM also sells gas-powered vehicles, both are trying to sell EVs in a market that has seen growth slow while facing a future without EV incentives. How GM and Tesla plan to navigate this (or at least what they're signaling) is quite different. GM, which saw tariffs take a $1 billion bite out of its Q2 line, still sees EVs as its 'north star.' And while GM certainly trails Tesla in EV sales today, it has a bigger mix of EV models to attract customers — more than a dozen in all. And Chevrolet is now the No. 2 EV brand in the U.S. And while GM did tout $4 billion of deferred revenue from its advanced driver-assistance system Super Cruise, along with OnStar and other software services that will be recognized over time, the big theme of the call was 'flexibility.' Chair and CEO Mary Barra and CFO Paul Jacobson said the word 'flexibility' nine times during the Q2 earnings call. What they mean by flexibility is setting up factories where they can easily assemble EVs and ICE vehicles — and change up the mix based on demand. Meanwhile, Tesla is betting heavily on the 'future,' and for CEO Elon Musk that means autonomy and AI, or as he sometimes calls it, 'real-world AI.' The vast majority (about 74%) of Tesla's revenue still comes from selling cars, although Q2 results show a 16% year-over-year decline in automotive revenue. But if you listened to the Q2 call, it's clear that Elon Musk isn't interested in Tesla being a car company. (He even admitted that the highly anticipated breakthrough cheaper model Tesla is working on is really just a stripped down version of the Model Y.) Musk wants to make and sell Optimus robots and deploy autonomous vehicles. The problem is that today these products — or future products — are not generating profits, let alone revenue. Yes, Tesla does bring in revenue from its advanced driver-assistance system known as supervised Full Self-Driving. (This is not an autonomous vehicle and requires human driver engagement.) And yes, the company is charging for robotaxi rides in South Austin, but it is not at scale, nor is it profitable. Musk acknowledged there would be some rough quarters ahead, but he still believes that ultimately this will be where the bulk of Tesla profits come from. I think that this transition is going to take far longer than Musk has publicly shared. (Just today, The Information reported the company is far behind on its Optimus robot production goal.) And it seems the company is feeling the pressure to act. For instance, Tesla is reportedly bringing a limited version of its robotaxi service to San Francisco this weekend even though it technically doesn't have the required permits. (What do you think Tesla's workaround will be?) Meanwhile, Tesla is under regulatory and legal pressures that could further undermine its effort to reboot sales and even threaten his future plans around FSD. A little bird Got a tip for us? Email Kirsten Korosec at or my Signal at kkorosec.07, Sean O'Kane at or Rebecca Bellan at Deals! Just a smattering of deals this week! Bosch Ventures led a $21 million Series B investment in 4screen, a Munich-based company that connects automakers, brands, and drivers through native vehicle displays. Blockskye, a corporate travel infrastructure company, raised $15.8 million in a round led by Blockchange. United Airlines Ventures, Lightspeed Faction, Lasagna, Litquidity Ventures, Longbrook Ventures, KSV Global, and TFJ Capital also participated. Startup Glīd Technologies raised $3.1 million in a pre-seed funding round led by Outlander VC, with participation from Draper U Ventures, Antler, The Veteran Fund, M1C, and angel investors. Los Angeles-based Nevoya came out of stealth last year with the ambitious goal of breaking the EV truck adoption logjam. Nevoya made enough progress on its goal to attract investors — and a $9.3 million seed round led by Lowercarbon. Floating Point and LMNT Ventures also joined, along with existing investors Third Sphere, Stepchange, and Never Lift. Qasar Younis, the founder and CEO of buzzy self-driving AI company Applied Intuition, also invested. Rune Technologies, a startup that wants to tackle AI-enabled software for military logistics, raised a $24 million Series A round led by Human Capital with participation from Pax VC, Washington Harbour Partners, a16z, Point72 Ventures, XYZ Venture Capital, and Forward Deployed VC. Swift Navigation, which has developed centimeter-accurate positioning for vehicle autonomy, robotics, and logistics, raised $50 million in a Series E financing round led by Crosslink Capital. Existing investors NEA, Eclipse Ventures, EPIQ Capital Group, First Round Capital, TELUS Global Ventures, and Potentum Partners, along with new investors Niterra Ventures, AlTi Tiedemann Global, GRIDS Capital, Essentia Ventures, Shea Ventures, and EnerTech Capital also participated. Notable reads and other tidbits Autonomous vehicles Lyft will add autonomous shuttles made by Austrian manufacturer Benteler Group to its network in late 2026. The shuttles will be deployed in partnership with U.S. cities and airports. Electric vehicles Lucid Air owners will be able to charge their luxury EVs at thousands of Tesla Supercharger stations in North America starting July 31, nearly two years since the automakers reached an agreement. But there is a notable caveat: Lucid Air vehicles won't be able to charge as fast as Tesla vehicles. Gig economy Uber is bringing its women preferences feature, which lets female drivers and riders match with each other, to the United States. The feature will first roll out in Detroit, Los Angeles, and San Francisco. Last but not least One more note on Tesla. By the time this newsletter reaches your inbox, we won't have an answer, but an important Department General Services hearing has been held all week in California. At stake: Tesla's ability to sell cars in California. The TL;DR: The California Department of Motor Vehicles is arguing that Tesla should lose its license to sell vehicles in the state over false advertising claims on its branded Autopilot and Full Self-Driving advanced driver-assistance systems. Sign in to access your portfolio
TechCrunch
a day ago
- Automotive
- TechCrunch
TechCrunch Mobility: Tesla vs GM: A tale of two earnings
Welcome back to TechCrunch Mobility, your central hub for news and insights on the future of transportation. Sign up here for free — just click TechCrunch Mobility! The poll results are in (from last week's edition) and it's clear what you want: Analysis with a capital A. You also want scoops, a bit of a news roundup, and deals, but far and away you're looking for analysis. I've always sprinkled my thoughts and insights throughout the newsletter, but over the next few weeks and months you'll see me push further into analysis. On that note, earnings season is upon us and two stood out to me: GM and Tesla. Both companies are facing pressure from tariffs. And while GM also sells gas-powered vehicles, both are trying to sell EVs in a market that has seen growth slow while facing a future without EV incentives. How GM and Tesla plan to navigate this (or at least what they're signaling) is quite different. GM, which saw tariffs take a $1 billion bite out of its Q2 line, still sees EVs as its 'north star.' And while GM certainly trails Tesla in EV sales today, it has a bigger mix of EV models to attract customers — more than a dozen in all. And Chevrolet is now the No. 2 EV brand in the U.S. And while GM did tout $4 billion of deferred revenue from its advanced driver-assistance system Super Cruise, along with OnStar and other software services that will be recognized over time, the big theme of the call was 'flexibility.' Chair and CEO Mary Barra and CFO Paul Jacobson said the word 'flexibility' nine times during the Q2 earnings call. What they mean by flexibility is setting up factories where they can easily assemble EVs and ICE vehicles — and change up the mix based on demand. Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | REGISTER NOW Meanwhile, Tesla is betting heavily on the 'future,' and for CEO Elon Musk that means autonomy and AI, or as he sometimes calls it, 'real-world AI.' The vast majority (about 74%) of Tesla's revenue still comes from selling cars, although Q2 results show a 16% year-over-year decline in automotive revenue. But if you listened to the Q2 call, it's clear that Elon Musk isn't interested in Tesla being a car company. (He even admitted that the highly anticipated breakthrough cheaper model Tesla is working on is really just a stripped down version of the Model Y.) Musk wants to make and sell Optimus robots and deploy autonomous vehicles. The problem is that today these products — or future products — are not generating profits, let alone revenue. Yes, Tesla does bring in revenue from its advanced driver-assistance system known as supervised Full Self-Driving. (This is not an autonomous vehicle and requires human driver engagement.) And yes, the company is charging for robotaxi rides in South Austin, but it is not at scale, nor is it profitable. Musk acknowledged there would be some rough quarters ahead, but he still believes that ultimately this will be where the bulk of Tesla profits come from. I think that this transition is going to take far longer than Musk has publicly shared. (Just today, The Information reported the company is far behind on its Optimus robot production goal.) And it seems the company is feeling the pressure to act. For instance, Tesla is reportedly bringing a limited version of its robotaxi service to San Francisco this weekend even though it technically doesn't have the required permits. (What do you think Tesla's workaround will be?) Meanwhile, Tesla is under regulatory and legal pressures that could further undermine its effort to reboot sales and even threaten his future plans around FSD. A little bird Image Credits:Bryce Durbin Got a tip for us? Email Kirsten Korosec at or my Signal at kkorosec.07, Sean O'Kane at or Rebecca Bellan at Deals! Image Credits:Bryce Durbin Just a smattering of deals this week! Bosch Ventures led a $21 million Series B investment in 4screen, a Munich-based company that connects automakers, brands, and drivers through native vehicle displays. Blockskye, a corporate travel infrastructure company, raised $15.8 million in a round led by Blockchange. United Airlines Ventures, Lightspeed Faction, Lasagna, Litquidity Ventures, Longbrook Ventures, KSV Global, and TFJ Capital also participated. Startup Glīd Technologies raised $3.1 million in a pre-seed funding round led by Outlander VC, with participation from Draper U Ventures, Antler, The Veteran Fund, M1C, and angel investors. Los Angeles-based Nevoya came out of stealth last year with the ambitious goal of breaking the EV truck adoption logjam. Nevoya made enough progress on its goal to attract investors — and a $9.3 million seed round led by Lowercarbon. Floating Point and LMNT Ventures also joined, along with existing investors Third Sphere, Stepchange, and Never Lift. Qasar Younis, the founder and CEO of buzzy self-driving AI company Applied Intuition, also invested. Rune Technologies, a startup that wants to tackle AI-enabled software for military logistics, raised a $24 million Series A round led by Human Capital with participation from Pax VC, Washington Harbour Partners, a16z, Point72 Ventures, XYZ Venture Capital, and Forward Deployed VC. Swift Navigation, which has developed centimeter-accurate positioning for vehicle autonomy, robotics, and logistics, raised $50 million in a Series E financing round led by Crosslink Capital. Existing investors NEA, Eclipse Ventures, EPIQ Capital Group, First Round Capital, TELUS Global Ventures, and Potentum Partners, along with new investors Niterra Ventures, AlTi Tiedemann Global, GRIDS Capital, Essentia Ventures, Shea Ventures, and EnerTech Capital also participated. Notable reads and other tidbits Image Credits:Bryce Durbin Autonomous vehicles Lyft will add autonomous shuttles made by Austrian manufacturer Benteler Group to its network in late 2026. The shuttles will be deployed in partnership with U.S. cities and airports. Electric vehicles Lucid Air owners will be able to charge their luxury EVs at thousands of Tesla Supercharger stations in North America starting July 31, nearly two years since the automakers reached an agreement. But there is a notable caveat: Lucid Air vehicles won't be able to charge as fast as Tesla vehicles. Gig economy Uber is bringing its women preferences feature, which lets female drivers and riders match with each other, to the United States. The feature will first roll out in Detroit, Los Angeles, and San Francisco. Last but not least One more note on Tesla. By the time this newsletter reaches your inbox, we won't have an answer, but an important Department General Services hearing has been held all week in California. At stake: Tesla's ability to sell cars in California. The TL;DR: The California Department of Motor Vehicles is arguing that Tesla should lose its license to sell vehicles in the state over false advertising claims on its branded Autopilot and Full Self-Driving advanced driver-assistance systems.
Yahoo
6 days ago
- Automotive
- Yahoo
General Motors CFO: Agility is a key strength as tariffs deliver $1.1 billion hit in Q2
Good morning. At the start of Q2 earnings season, investors looked for tariff-related impacts on profits. Major U.S. financial firms reported only limited effects—especially compared to the auto industry. General Motors (No. 18 on the Fortune 500) reported its Q2 earnings results on Tuesday. The company's net income fell 35% from the same period last year, as higher costs and uncertainty surrounding the Trump administration's automotive tariffs resulted in a $1.1 billion hit to its bottom line. 'We're still tracking to offset at least 30% of the $4 billion to $5 billion full-year 2025 tariff impact through strategic actions such as manufacturing adjustments, targeted cost initiatives, and consistent pricing,' GM CFO Paul Jacobson said during the earnings call. Adjusted automotive free cash flow was $2.8 billion, down $2.5 billion year over year, primarily due to tariff payments as well as headwinds from working capital and lower dealer inventory, Jacobson said. CEO Mary Barra added that GM's tariff burden would be lower if tariffs with Mexico, Canada, and Korea were reduced. President Donald Trump imposed a 25% tariff on all imported cars and auto parts, effective in early April. Vehicles assembled in the U.S. are eligible for partial tariff offsets, allowing automakers to receive reimbursement on a portion of tariffs paid for foreign-made parts used in U.S.-built vehicles. Despite year-over-year declines in revenue and ongoing tariff pressures, GM outperformed market expectations across major metrics: Total revenue reached $47.12 billion, down about 2% year over year, but exceeding Wall Street's estimate of $46.25 billion. Adjusted EBIT was $3.04 billion (down $1.4 billion year-over-year), topping analyst expectations of $2.84 billion. Earnings per share were $2.53, also ahead of the consensus estimate of $2.34. Notably, U.S. sales rose 7%, and the company continued to command strong pricing on pickup trucks and SUVs. A focus on agility GM remains confident that total tariff expenses will decline as new bilateral trade deals emerge and as sourcing and production adjustments are made, Jacobson noted. 'Our agility and responsiveness to evolving consumer preferences and regulatory demands remain key strengths that set us apart,' he said. Agility is a particularly relevant concept, as it is now widely regarded as essential for CFOs amid economic volatility, regulatory pressures, shifting supply chains, and rapidly changing market conditions. 'As we navigate an era of unreliability, fast actions may differentiate winners from losers,' according to Paul Melville, national managing principal of CFO advisory for Grant Thornton Advisors. The firm's latest CFO survey finds that agile CFOs can adapt strategies quickly, enabling companies to pivot in response to disruptions. The most popular tactics to reduce tariff impacts are adjusting supply chains, conducting frequent scenario planning, implementing cost-saving technologies, and raising prices. However, Jacobson told CNBC that he's not expecting any specific price increases related to tariffs. Wedbush analysts see an upside for GM. 'While the tariff headlines continue to put further pressure on the bottom line for the foreseeable future, we believe Barra & Co. continues to impressively navigate the complex backdrop,' the analysts wrote in a note to investors Tuesday, adding that this is occurring amid continued high demand for GM's entire fleet of EVs and internal combustion engine vehicles. The analysts also noted that, in order to mitigate the long-term impact of tariffs, GM is investing $4 billion to build new U.S. assembly plants—with production set to begin in 2027. Wedbush maintains its Outperform investors look to the future, all eyes will be on GM's ability to stay one step ahead in a rapidly changing market environment. Sheryl This story was originally featured on
Times
7 days ago
- Automotive
- Times
General Motors' profits fall by a third after $1.1bn hit from tariffs
America's largest carmaker has reported a $1.1 billion hit to its quarterly profits from President Trump's trade war. General Motors' second-quarter core profit fell 32 per cent to $3 billion as it continued to deal with the fallout from Trump's tariff policies. Earnings in its US business, the company's main profit centre, suffered from import duties on cars made in Canada, Mexico and South Korea. The Detroit-based carmaker expects the tariff impact on profits to worsen in the third quarter and repeated a previous estimate that trade headwinds will cost it up to $5 billion. However, it is aiming to mitigate at least 30 per cent of that impact through manufacturing adjustments, targeted cost initiatives and pricing. Mary Barra, chief executive of General Motors, said they were attempting to 'greatly reduce our tariff exposure', citing $4 billion of new investment in the automaker's US assembly plants. The carmaker expects to build more than 2 million vehicles in the US each year after it scales production. Paul Jacobson, chief financial officer, said: 'Over time, we remain confident that our total tariff expense will come down as bilateral trade deals emerge and our sourcing and production adjustments are implemented.' Shares of General Motors fell $3.69, or 6.9 per cent, to $49.52 in morning trading in New York. The automaker's revenue in the three months to the end of June fell nearly 2 per cent to about $47 billion from a year ago. General Motors said it dealt with higher warranty costs during the quarter, which was partly due to an increase in warranty claims from software issues on some of its early electric vehicle launches. • Nvidia's Jensen Huang unveils superchip and General Motors tie-up EV sales totalled 46,300 in the second quarter, up from 31,900 in the first quarter. However, overall in the United States, EV sales growth has begun to slow. The $7,500 EV tax credit under the Inflation Reduction Act is set to expire in September for many models. 'Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our north star,' Barra wrote in a letter to shareholders. 'As we adjust to changing demand, we will prioritise our customers, brands, and a flexible manufacturing footprint, and leverage our domestic battery investments and other profit-improvement plans.'
CBS News
7 days ago
- Automotive
- CBS News
GM quarterly profit slumps 35%, but it sticks by full year outlook lowered in May
General Motors' profit declined 35% in its second-quarter, including a $1.1 billion hit from tariffs, but the automaker easily topped expectations and stuck by its full-year financial outlook that it lowered in May. GM CEO Mary Barra also said in a letter to shareholders on Tuesday that the automaker is attempting to "greatly reduce our tariff exposure," citing $4 billion of new investment in its U.S. assembly plants. "In addition to our strong underlying operating performance, we are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape," she said. Barra said during GM's conference call that the automaker expects to build more than 2 million vehicles in the U.S. each year as it scales production. GM said that it's making solid progress in mitigating at least 30% of the $4 billion to $5 billion gross tariff impact it anticipates for the year through manufacturing adjustments, targeted cost initiatives and with pricing. The company expects the impact from the Trump administration's tariffs to take a bigger toll in the third quarter because of indirect costs related to the duties. Chief Financial Officer Paul Jacobson remained optimistic, however. "Over time, we remain confident that our total tariff expense will come down as bilateral trade deals emerge and our sourcing and production adjustments are implemented," he said. For the three months ended June 30, GM earned $1.89 billion, or $1.91 per share. A year earlier the company earned $2.93 billion, or $2.55 per share. Stripping out certain items, earnings were $2.53 per share. That handily beat the $2.34 per share analysts polled by FactSet were calling for. Revenue declined to $47.12 billion from $47.97 billion, but still topped Wall Street's estimate of $45.84 billion. Jacobson said that GM dealt with higher warranty expenses during the quarter, which was partly due to increase warranty claims from software issues on some of its early EV launches. Jacobson said GM provided extended warranties as needed and is working to improve supplier quality. Shares fell nearly 2% before the opening bell on Tuesday. EV sales totaled 46,300 in the second quarter, up from 31,900 in the first quarter. Yet overall in the U.S. EV sales growth has begun to slow. The $7,500 EV tax credit under the Inflation Reduction Act is set to expire in September for many models. "Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our north star," she wrote. "As we adjust to changing demand, we will prioritize our customers, brands, and a flexible manufacturing footprint, and leverage our domestic battery investments and other profit-improvement plans." Wedbush analyst Dan Ives believes Barra is doing a good job dealing with the issues the auto industry is facing. "While the tariff headlines continue to put further pressure on the bottom line for the foreseeable future, we believe Barra & Co. continues to impressively navigate the complex backdrop successfully while seeing continued high demand for its entire fleet of EVs and (internal combustion engine) vehicles," he wrote in a client note. GM maintained its full-year financial forecast. In May General Motors lowered its profit expectations for the year as the carmaker braced for a potential impact from auto tariffs as high as $5 billion in 2025. The Detroit automaker said at the time that it anticipated full-year adjusted earnings before interest and taxes in a range of $10 billion to $12.5 billion. The guidance includes a current tariff exposure of $4 billion to $5 billion. A month later GM announced plans to invest $4 billion to shift some production from Mexico to U.S. manufacturing plants. The company said at the time that the investment would be made over the next two years and was for its gas and electric vehicles. President Donald Trump signed executive orders in April to relax some of his 25% tariffs on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers. Automakers and independent analyses have indicated that the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide. Trump portrayed the changes as a bridge toward automakers moving more production into the United States. The tariffs ordered by Trump are hitting the entire auto sector, which sends vehicles and parts across the northern and southern borders of the U.S. repeatedly as they are assembled. The Center for Automative Research says that a uniform 25% tariff on all trading partners would have an increased cost of $107.7 billion to all U.S. automakers and an increased cost of $41.9 billion for the Big Three automakers in Detroit, Stellantis, GM and Ford. GM reported its financial results a day after Jeep maker Stellantis said that its preliminary estimates show a 2.3 billion euros ($2.68 billion) net loss in the first half of the year due to U.S. tariffs and some hefty charges. Stellantis will release its financial results for the first half of the year on July 29.
