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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

Or should I say, Greetings from Mudville! Yes, midnight arrived on Sunday for our Cinderella team, the Detroit Lions. No historic Super Bowl appearance. No rendez-vous with Taylor Swift. Just Eminem giving a heartfelt Detroit salute to the San Francisco fans. Imported from Detroit, indeed!

Now that the football fantasy is over, Detroit and the other citizens of the World of Cars must deal with the realities of earnings season. You’d be surprised who’s looking at the sunny side – read on!

We’ve got lots of ground to cover. Let’s dive in –

Today –

• • GM’s cash machine wows Wall Street

  • BYD and The EV Hunger Games

  • Toyota’s victory party, spoiled by scandal

GM’s cash hauler – Reuters/Rebecca Cook

General Motors shares jumped Tuesday after CEO Mary Barra delivered a more upbeat outlook for 2024 than Elon Musk – and encouraged investors to expect that more of the billions in cash being generated by sales of combustion trucks and SUVs will wind up in their pockets.

GM forecast that pre-tax profits for this year could land in a range between $12 billion and $14 billion – roughly in line with 2023 if you back adjust for one-time events such as the UAW strike.

More important, GM forecast $8 billion to $10 billion in cash flow after capital spending. That’s money that could fund more share buybacks on top of the $10 billion repurchase launched late last year.

Barra told investors GM wants to get shares outstanding below 1 billion from 1.2 billion currently.

Investors got the message, and looked past less positive developments, such as the costly regulatory mess at the Cruise robo-taxi operation, slumping sales and profits in China and a fumbled launch of new software that forced suspension of sales of GM’s new Chevy Blazer EV in North America.

Barra delayed an investor day promised for March, indicating management needs more time to lock in plans for fixing Cruise and the internal software factory.

A BYD EV on the move. Reuters/Tingshu Wang

Global electric vehicle sales leader BYD told investors it expects net profits to jump by as much as 86.5% for 2023 compared to a year earlier – another win for the most formidable rival to Tesla.

The battery and EV maker’s profits are growing and worldwide EV sales expanding even as it fights a price war with Tesla and other EV manufacturers.

BYD expects 2023 profits in a range between $4.04 and 4.32 billion. Tesla earned $8.9 billion from operations last year, not including a $5.9 billion tax-related gain. BYD credited cost-cutting and a “continuously expanding scale advantage” for the result.

Investors will ask: Can BYD keep defying gravity? Tesla could not. Its profit margins are shrinking and Elon Musk’s flat growth forecast for 2024 led investors to slash nearly $80 billion from Tesla’s market cap last week.

Renault CEO Luca de Meo; He will keep Ampere after all. Reuters/Gonzalo Fuentes

BYD’s strong numbers stand out even more when considered against the rest of the EV industry.

In the long run, electric vehicles could be a great business. In the short term, the EV industry looks more and more like the Hunger Games meets Death Valley Days. Some will make it across – but as Stellantis CEO Carlos Tavares likes to say, the next few years will be “Darwinian.”

Global EV demand is growing, but there are more signs that growth is not coming fast enough for automakers, battery manufacturers and miners that invested far ahead of consumer demand. Tesla’s warning last week is not the only sign of stress:

Renault cancelled plans to float shares in its electric vehicle business, Ampere, amid slowing EV demand, brutal competition from China and withering investor interest in EV startups.

Renault will now fund Ampere product development on its own. Renault shares initially climbed on the news, but then wobbled.

German EV sales are forecast to fall by 13% in 2024, the German auto industry association reported. Government EV purchase subsidies have run dry, and consumers are waiting for better technology.

Polestar, the Volvo-Geely EV brand, is laying off 450 staffers.

Lithium miner Albermarle is cutting staff as global prices for battery minerals fall. Australian nickel miners are struggling with a collapse in prices for the battery mineral as revved up Indonesian production collides with slowing demand.

Toyota should have spent Tuesday celebrating another year as the world’s top-selling automaker with 11.2 million vehicles delivered in 2023.

Instead, Toyota Chair Akio Toyoda had to apologize for another scandal over regulatory cheating at an affiliate.

Toyota temporarily halted shipments of Hilux trucks and Land Cruiser SUVs outfitted with diesel engines after investigators discovered that the affiliate producing the engines may have rigged testing for the motors to produce smoother power and torque curves.

The affiliate, Toyota Industries Corporation, or TICO, admitted in March 2023 that employees had rigged testing of diesel engines used in certain industrial equipment to meet Japanese emissions standards. Toyota commissioned an investigation, and that review revealed the irregularities in testing for the diesel passenger vehicles.

In a TICO report here, and a Toyota statement here, the companies said performance testing of the diesel engines used in ten vehicles sold in Japan, Europe, the Middle East and Southeast Asia was done using engine control units programmed with different software than that used in models delivered to customers. The companies said the software used for testing produced smoother, more consistent results.

Toyota said the temporary stop-shipping order for vehicles with TICO diesels hit six assembly lines. The company is already dealing with the fallout from revelations about cheating on safety tests at its Daihatsu mini-car affiliate. Daihatsu halted production last year through this month. In 2022, Toyota affiliate Hino was found to be falsifying data for engine emissions and performance tests.

The test-fudging at Toyota’s affiliates is not at the level of Volkswagen’s Dieselgate emissions cheating scandal. But echoes of Dieselgate and its profound impact on the auto industry – the scandal was a spur to the global EV race – sound in Toyota’s statement about the TICO revelations.

“We recognize the gravity of the fact that the repeated certification irregularities at TICO, following those at Daihatsu, have shaken the very foundations of the company as an automobile manufacturer,” Toyota said.

Electric vehicles are getting a starring role in the U.S. election brawl, and that could be a problem for Ford.

Four senior Republican House lawmakers have demanded that the Biden administration investigate Chinese companies that would be providing technology and know-how to Ford’s proposed EV battery plant in Michigan.

Their letter charges that the companies have ties to China’s Communist Party, or human rights abuses in China’s Xinjiang province, or the North Korean government.

If the U.S. government declared Ford’s battery technology partner CATL or other Chinese suppliers to be foreign entities of concern, Ford’s Michigan-made batteries could be ineligible for U.S. subsidies.

The letter is the latest salvo in a Republican effort to paint Biden’s pro-EV policies as a giveaway to China, and win votes in auto states such as Michigan that are key to the presidential race.

Volkswagen is folding its “New Mobility” electrification and autonomous driving unit into its technical development department, and sending the New Mobility unit’s head, Thomas Ulbrich, to lead technical development in China. The Volkswagen brand won’t replace Ulbrich on the brand’s management board.

Vroom will exit the retail online used car selling business – good news for rivals Carvana, CarMax and other auto retail chains such as Lithia, AutoNation and Sonic.

Toyota warned owners of about 50,000 Corolla and RAV4 models from the 2003 to 2005 model years not to drive the vehicles because their two-decade old Takata airbags could rupture. The warning underscores why the Takata airbag recall is so problematic: Many of the vehicles equipped with Takata airbags are otherwise durable as granite.

Stellantis will use ChatGPT in future Peugeot models.

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