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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Tesla, China Unicom setting up 400-station charging network in China

Tesla and China United Network Communications Corp. are working on something big. Like 400 public chargers in 120 cities big. These are not going to be Supercharger fast chargers that the California automaker is installing across the US and Europe, but don't worry, the two companies are going to install 20 Superchargers there. As with the Supercharger network, Tesla EV drivers will be able to juice up their cars for free at the 400 stations and the new Superchargers. The deal will work like this, according to Bloomberg: Tesla supplies the charging station parts and China Unicom provides the land. Laying the groundwork for easier electric vehicle charging is important, since Model S EVs are already selling well in China and CEO Elon Musk has said that the company expects sales there to reach the same level as in the US perhaps by 2015. Tesla and all plug-in vehicle sellers will benefit if China's plan to invest $16 billion on more charging stations comes to fruition. China Unicom is the second-biggest mobile phone company in China, which may help explain why TSLA stock jumped to a record high after the announcement and is climbing again today. As of this writing, the stock is just over $283, up $13.55 (5.02 percent) from last week.

US Senate authorizes DOE green car loan program [UPDATE]

Tesla Motors' crush of Model 3 reservations is fresh in everyone's minds, while Fisker Automotive (or at least its bankruptcy) is a distant memory. That's one explanation for a US Senate with a Republican leadership at one time bashed the Department of Energy's loan program for green-vehicle makers but now, under bipartisan support, the Senate has OK'd about $1.6 billion more to push forward green-vehicle technology, according to Hybrid Cars. The Senate voted to authorize a $1.6-billion federal program. The US Senate voted by about a seven-to-one margin to authorize a $1.6-billion federal program for the DOE's Vehicle Technologies Office program housed under the Office of Energy Efficiency and Renewable Energy (EERE). This is a different program from the Advanced Technology Vehicle Manufacturing (ATVM) program, which was last funded in 2007. The feds have been green-lit to spend $339 million per year through 2020 to speed up the development of advanced-technology vehicles. The mission: to get the US new light-duty fleet to meet the Corporate Average Fuel Economy (CAFE) mandate of a 54.5 miles per gallon average (which is a real-world average of around 40 mpg) by 2025. Four automakers received funding from the ATVM program in the first go-round. The list was: Tesla, Fisker, Ford and Nissan. Specifically, Tesla was loaned $465 million in 2010, and paid that loan back in 2013 – about nine years ahead of time, with interest. On the flip side, the Department of Energy was slated to loan extended-range plug-in vehicle maker Fisker $528 million, but Fisker only received $192 million before the spigot got shut off because of missed deadlines. Fisker collected enough cash to pay down some of the debt, but the government still was stuck with $168 million unpaid. And that got washed out in Fisker's 2013 bankruptcy. Nissan was awarded $1.4 billion and Ford got $5.9 billion. Senator Gary Peters (D-Michigan), one of the authors of the new bill, issued a press release about the new funding, which you can read here. The new ATVM program will also target automotive suppliers. UPDATE: This post has been updated. We inaccurately said that the ATVM had been re-authorized. In fact, the ATVM loan program "has $16 billion in remaining loan authority for automotive or component manufacturers for reequipping, expanding, or establishing manufacturing facilities in the U.S.