Auto Stock Roundup: Honda EV Activities, Volkswagen Crossover Versions in Focus

It was a usual week for the auto sector. Honda Motor Co., Ltd. HMC, which till sometime back was not that active on the electric vehicle (EV) front, has finally changed its stance. The company now plans to develop all solid-state batteries for EVs. This is in sync with the global automakers’ heightened EV activities. In fact, a large number of automakers across the globe are coming up with next-generation car batteries in order to lower vehicle emissions.

Also, keeping in mind the changing preference of consumers toward crossovers, Volkswagen AG VLKAY is reportedly planning to add new versions to its two crossover models, Atlas and Tiguan. The latest editions will enable the German auto giant to offer compact crossovers at a lower price.

On the other hand, recall issues are still plaguing automakers across the globe. Fiat Chrysler Automobiles N.V. FCAU announced that it is recalling around 1.8 million Ram trucks, primarily in North America, to fix a gearbox defect. The defect may cause trucks to accidentally shift from parking mode and start moving.

(Read the previous roundup here: Auto Stock Roundup for Dec 21, 2017)

Recap of the Week’s Most Important Stories

1.    Westport Fuel Systems Inc. WPRT reported that it has signed a secured loan agreement worth $20 million with Export Development Canada (EDC). The loan will assist the commercial unveiling of the Westport High Pressure Direct Injection 2.0 (Westport HPDI 2.0) program.

With its maturity date on Dec 31, 2021 and an initial interest rate of 9% plus fees, the secured loan will be repaid in quarterly installments that will increase annually. However, on reaching certain milestones, the interest rate will drop to 6%.

Westport HPDI 2.0 is an OEM integrated system, enabling heavy-duty trucks to run on natural gas and deliver performance equivalent to diesel-run engines, generating less CO2 emissions (read more: Westport Fuel & EDC Ink $20-Million Loan Deal).

Currently Westport Fuel Systems has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

2.    Fiat Chrysler has announced that it is recalling around 1.8 million Ram trucks, primarily in North America, to fix a gearbox defect, per a Wall Street Journal report. The defect may cause trucks to accidentally shift from parking mode and start moving.

According to company sources, the brake-transmission shift interlock system may stop working because of prolonged exposure to high temperature conditions, as a result of which the vehicles might start moving even without a foot on the brake pedal or a key in the ignition.

The trucks recalled include certain 2009-2017 model year Ram light-duty pickups, heavy-duty pickups and chassis cabs. The auto giant assured that it would repair the faulty vehicles and suggested that drivers should use parking brake as a safety measure (read more: Fiat Chrysler Recalls Around 1.8 Million Pickup Trucks).

Currently Fiat Chrysler has a Zacks Rank #2 (Buy).

3.    Japanese auto giant Honda is mulling over developing all solid-state batteries for EVs, per a Reuters report. This latest move by Honda is in sync with the global automakers’ heightened activities in the EV front. In fact, a large number of automakers across the globe are coming up with next-generation car batteries in order to lower vehicle emissions.

Notably, Honda has relatively been a late starter to the sale of hybrid and electric vehicles. That said, the company has changed its stance and has set big plans of transition to electric vehicles by 2030.

Strict emissions standards imposed by a number of Asian and European countries are compelling automakers to consider transition to EVs, including all-solid-state batteries which offer higher capacity and improved safety than traditional lithium-ion batteries (read more: Honda Set to Develop All Solid-State EV Batteries).

Currently Honda has a Zacks Rank #2.

4.    Volkswagen is reportedly planning to add new versions to its two crossover models, Atlas and Tiguan. The new editions will include two-row, five-seat version in the Atlas model, while the Tiguan will feature two-row, long-wheelbase version.

The latest editions will enable Volkswagen to offer compact crossovers at lower costs.

Earlier this year, the company rolled out crossovers with a focus on three-row vehicles, including the seven-seating Atlas.

Timing for the above changes in Atlas and Tiguan has not been announced yet. However, the company is scheduled to launch another model of Atlas in 2020 (read more: Volkswagen Mulls Over New Atlas & Tiguan Versions).

Currently Volkswagen has a Zacks Rank #3.

Performance

Company	Last Week	Last 6 Months
GM	-2.8%	19.4%
F	-1.7%	12.7%
TSLA	-5.3%	-16.1%
TM	0.5%	21.8%
HMC	0.6%	24.9%
HOG	1.1%	-6.3%
AAP	1.2%	-14.5%
AZO	0.9%	24.3%

Last week, the steepest increase was registered by Advance Auto Parts, Inc. AAP and sharpest decline was witnessed by Tesla, Inc. TSLA.

In the last six months, the steepest increase and the sharpest decline were witnessed by Honda and Tesla, respectively.

What’s Next in the Auto Space?

Watch out for the usual news releases of other auto companies over the next week.

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Tesla Inc. (TSLA) : Free Stock Analysis Report
 
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Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
 
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