Displaying items by tag: auto

(Detroit)

The auto industry has been the center of an ongoing technological battle. Not only are auto companies and tech businesses battling over self-driving vehicles, but there is another competition going on over how to power them electrically. With that in mind, here are four stocks to play the electric vehicle revolution; hint, you won’t know any of them. The four names are Aumann, Constellium, Sherritt International, and Visteon. All of the companies make some key component for electric vehicles, from batteries to copper wire installations.

FINSUM: Electric vehicles are one of those revolutions where it seems best to own the component makers rather than the actual carmakers. The big question for us is the horizon for appreciation, as the exact timeline for electric vehicles becoming mainstream still seems unclear.

(Detroit)

Just when it seemed like trade war ambitions were over for the White House, they are rearing their head again. President Trump has ordered the US Commerce Department to investigate whether the extensive use of foreign parts in the US auto industry is a threat to national security. The mandate he is using for doing so—Section 232 of the Trade Expansion Act, is the same as he used for his tariffs on aluminum and steel last year.

FINSUM: While we do understand the national security considerations, this could hurt both the car industry (because of increased costs) and spark retaliations from trading partners.

(Detroit)

The Wall Street Journal has published that we consider an important and engaging piece about the US auto industry and its disconnection with the direction of the rest of the world. While other major markets, like Europe and Asia, are moving to an ever-cleaner, ever-smaller, ever more electric paradigm, the US is moving further into the “bigger is better” mantra and cutting fuel standards. The disconnection has at its heart two components—the first is Trump’s very different view of climate change and environmental regulation, and the other is cheap gasoline.

FINSUM: We don’t think this disconnect is any cause for alarm in the near-term, but investors should consider that if political winds change (such as in the mid-term elections), then regulations could change quickly, leaving US automakers with a bad product mix.