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Auto Stock Roundup: TSLA's One Millionth Car, CNHI's Potenza Buyout & More

Zacks Equity Research

The deadly coronavirus has wreaked havoc on the auto industry, with shutdown of factories, dealerships with less customer traffic, supply-chain disruption and delay of annual motor shows. Last week, the New York International Auto Show was postponed amid the pandemic. The show, which was set to commence early next month, has now been rescheduled to late August. The show will now be held from Aug 28 to Sep 6. This is notably the third big ticket auto show to be cancelled amid the health hazard,after the Beijing Auto Show and Geneva Motor Show. Meanwhile, Fiat Chrysler temporarily halted four of its plants in Italy, while U.S. top carmaker General Motors cancelled the launch of Cadillac’s all-electric crossover, the Lyriq, over COVID-19 crisis.

(Read the Last Auto Stock Roundup here)

Recap of the Week’s Most Important Stories

1. Tesla TSLA reached an important milestone with the manufacture of its one millionth car — a Model Y. This is in sync with the company’s goal of manufacturing one million electric vehicles (EV) and launching the Model Y by 2020. Model Y is a smaller, compact and more reasonable version of Model X. Margin expectations for Model Y are higher than its popular Model 3. While production costs are expected to be the same for both, Model Y is priced higher than Model 3 due to extra room, larger size and a hatchback. (Read more: Tesla Reaches One Millionth Car With Model Y's Launch)

2. General Motors GM announced that the launch of Cadillac’s all-electric crossover, the Lyriq, has been cancelled over coronavirus concerns. The company is re-evaluating plans for rolling out the crossover, which was earlier scheduled to debut at a special event on Apr 2, 2020 in Los Angeles. While Lyriq won't be the first new EV to reach the market, several others — including a second-generation Chevrolet Bolt EV, a Bolt EUV (Electric Utility Vehicle) and the GMC Hummer electric truck — will precede it. (Read more:Coronavirus Puts Brakes on General Motors' Lyriq EV Launch)

3. Gentex Corporation GNTX announced a 4% increase in quarterly dividend, marking the 10th consecutive year of payout hike. The move is indicative of the company’s commitment to create value for its shareholders and underlines its confidence in business growth. The revised quarterly dividend of 12 cents per share will be paid out on Apr 22, 2020, to stockholders of record as of Apr 10. (Read more: Gentex Announces Dividend Hike: Can It Maintain Its Payout?)

4. CNH Industrial N.V.’s CNHI global powertrain brand — FPT Industrial — announced the acquisition of Potenza Technology. The buyout will enhance FPT Industrial’s accelerating development of sustainable electric powertrains across a range of operating segments. This acquisition marks another step by FPT Industrial toward electrification, one of the pillars of its multi-power strategy.CNH Industrial is committed to deliver solutions that not only reduce emissions and enhance productivity, but also provide future proof technology for the long term. (Read more: CNH Industrial to Enhance Productivity With Potenza's Buyout)

5. Fiat Chrysler Automobiles N.V. FCAU announced that it will temporarily halt operations at four plants in Italy — two of which produce vehicles for the United States — to prevent the spread of coronavirus. The plants — Pomigliano, Melfi, Atessa and Cassino —are expected to reopen today.The move is in sync with the Italy government’s decision to impose sweeping restrictions on travel and public gatherings across the country, as it tries to contain the outbreak of the virus. (Read more: Fiat to Temporarily Shut Italy Plants Due to Coronavirus)

Price Performance


Last Week

Last 6 Months

























The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past week, all stocks apart from General Motors and Harley-Davidsonhave declined. In the past six months, Tesla has been the maximum gainer, while Ford has declined the most.

What’s Next in the Auto Space?

In addition to usual news releases, all eyes will remain glued to how automakers tackle the coronavirus scare and mitigate its overall impact on the industry. Investors are awaiting fourth-quarter and full-year results of China-based electric car maker NIO Inc. NIO, which is set to report on Mar 18. NIO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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