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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Never mind the sharks! In the World of Cars, this is Earnings Week. And it will make your head spin. Just yesterday, GM delivered better-than-expected profits for the last quarter, raised its profit forecast for the year and extended the life of its best-selling EV.

Great news, right?  WRONG! According to Wall Street.  GM shares fell. Morgan Stanley analyst Adam Jonas called the sell-off a “head scratcher.”

On top of that, a group of seven automakers announced today they plan to build an EV charging network to rival Tesla – after years of waiting for someone else to do the job. Automakers investing in refueling? Who’d have thought?

Get ready for more cognitive dissonance as quarterly results roll in.

Today –

• • Legacy automakers go big on a new charging network

  • Stellantis CEO Carlos Tavares issues a warning

  • GM does a U-turn to save the Chevy Bolt

Superchargers in action.

A consortium of big automakers representing half of U.S. vehicle sales said Wednesday they will collaborate to build their own fast-charging network with 30,000 chargers.

The so-far unnamed charging business – how about BigCharge, or VoltsAI? – will be jointly developed by General Motors, Stellantis, Hyundai-Kia, Honda, BMW and Mercedes. It will compete for charging revenues and customer data with Tesla’s Supercharger network, Volkswagen’s Electrify America and independent charging networks.

The companies did not say how much they plan to invest, but it will be billions. Subsidies from Washington will help. If the network helps would-be buyers of legacy automaker EVs get over the range anxiety that’s holding back sales, it could be worth every penny.

UAW President Shawn Fain: He sees those profits, too.

Big automakers are reporting big profits for the April-June quarter, and several lifted their full-year outlooks. So everything is fine? Not quite.

Looking ahead, CEOs and CFOs are warning that it will take redoubled cost-cutting to defend profit margins. It’s a tricky message for Wall Street, and for the unions bargaining now with the Detroit Three automakers in the U.S. and Canada.

GM said it will cut capital spending by $1 billion compared to the top-end of its previous plan and lifted its 2023-2024 cost-cutting target by $1 billion. (See the presentation here.) GM’s profit margins narrowed from Q1 to Q2, despite strong pricing in North America. GM raised its full-year profit forecast, to no avail. Investors took the report as a cue to sell.

Hyundai raised its profit forecast for the year and said it’s EV sales in the United States nearly doubled. But Hyundai said it is handing out $4,000 to $5,000 in discounts to push its EVs in the United States because they no longer qualify for federal tax breaks.

Nissan doubled its quarterly profit and lifted its outlook for the fiscal year.

Stellantis turned in the most robust Q2 results of all on Wednesday showing profit margins for its EV-light portfolio are outperforming General Motors, Ford…and Tesla. (STLA shares rose in Milan.)

Stellantis rolled up a 17.5% operating margin in North America – down from 18.1% last year but still well ahead of rivals. (The Stellantis Q2 presentation is here.) That will make it challenging for the company to plead poverty in negotiations with the United Auto Workers.

But Stellantis CEO Carlos Tavares warned that more cost-cutting lies ahead if the company is going to continue earning industry-leading margins while building more electric vehicles.  

The contraction of Tesla’s pre-tax margins this year shows the stress the EV sector is under as manufacturers try to boost sales to less affluent customers accustomed to being late adopters of novel technology, he said.

“They are entering my world, the world of tight pricing, cost competitiveness, and the operational issues that a big company like ours may face,” Tavares said.

In other words, Welcome to the Jungle.

What do we say to the God of Death? Not today!

The Chevy Bolt, the least expensive, long-range EV sold in the United States, will not die at the end of this year after all, but live on with new batteries and new software.

During Tuesday’s Q2 call with analysts, GM Chief Executive Mary Barra executed a 180 on the earlier decision to phase out Bolt production to make room at a GM assembly plant north of Detroit for production of electric trucks.

Before Tuesday, the Bolt was a symbol of the EV strategy GM had rejected: Retrofitting batteries into a combustion vehicle as Ford did with the F-150 Lightning.

As of today, the Bolt is an avatar for Barra’s new mantra: “Winning with simplicity.”

GM did not say when a new Bolt sporting Ultium batteries and more sophisticated software will hit showrooms. But news of the decision delivers an immediate remedy for the public relations black eye GM suffered from killing its best-selling, most affordable electric car.

Volkswagen will develop new EVs for China with help from Chinese automakers Xpeng and SAIC under two new deals unveiled Wednesday.

The deals come as VW is scrambling to recover from setbacks in developing the vehicles and software required to stay competitive in China’s EV market.

The German automaker, which has been losing ground in China, said it will invest $700 million in Xpeng, and use the startup EV company’s software for two new models aimed at the Chinese market.

Meanwhile VW said its Audi brand will collaborate with long-time Chinese JV partner SAIC to develop new models.

A ship carrying 3,000 cars caught fire off the Dutch coast, killing a crew member and raising a new red flag about the safety of packing thousands of EVs into boats.

The cause of the fire is unknown, but a Dutch Coast Guard spokesperson said the fire started near an EV.

Maritime safety regulators and insurers are concerned about the “increasing number of incidents” of EVs catching fire in transit, and are studying whether new fire safety systems and procedures are needed on car-carrying cargo ships. But those efforts aren’t scheduled to produce results until 2024.

The amazing American auto market keeps chugging ahead. S&P Global Mobility raised its forecast for 2023 U.S. car and light truck sales to 15.4 million vehicles, and projected July sales will rise 18% from a year ago.  

The Conference Board meanwhile said U.S. consumer confidence is at a two-year high, despite worries about inflation and the possibility that the Federal Reserve will eventually summon a recession with more interest rate hikes.

How bullish are affluent American vehicle buyers? Notwithstanding griping about the Fed and the White House: GM said 70% of the GMC Heavy Duty pickup trucks it sold last quarter went out with luxury Denali or AT4 trim packages, starting at $70,000 and up.

General Motors is scrambling to increase Ultium battery pack production because automated production equipment isn’t working. CEO Mary Barra said GM is adding “manual assembly lines” to its battery production process. And the company is adding battery module assembly capacity at North American EV plants to ease the bottlenecks. The United Auto Workers has raised alarms about working conditions at the Ultium LLC battery factory in Lordstown, Ohio.

Dial 911! Porsche said its 911 sports car will be the only internal combustion Porsche left as it electrifies its lineup through 2030. Your uncle will have one at his country place.

The RV industry is having the recession the rest of the United States economy has dodged…so far. The pandemic years boom has given way to the slowest sales pace in eight years for an industry used to Biblical feast and famine cycles.

Nissan and Renault finally closed the deal on their new alliance structure, which includes a $663 million investment by Nissan in Renault Ampere EV unit. Now, the two partners can focus on their shared competitive problems, starting with the threat of being run out of China.

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