Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Tesla Motors Inc. Faces a New Hurdle and Ford Motor Company Reaches an EcoBoost Milestone

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was trading 113 points higher, or 0.68%, by midafternoon despite a slow day for economic news in the U.S. and after pro-Russian separatists declared victory in Sunday's vote to declare independence from Ukraine. The Ukrainian government referred to the vote in the nation's east as "illegitimate," while the U.S. called it illegal.

"The vote seemed like a negative, but the violence that many thought would happen didn't, and at this point, no news is good news when it comes to Ukraine," said Channing Smith, co-portfolio manager of the Capital Advisors Growth Fund at Capital Advisors, according to Reuters.

With that in mind, here are two U.S. automakers making headlines in the markets today.

A section of Tesla's Model S assembly line. Source: Tesla Motors

Tesla Motors (NASDAQ: TSLA  ) made news for a couple of reasons. First, the company said it would stop supplying battery packs and motors for Toyota's electric RAV4 model. According to Tesla's filing, the electric-vehicle maker generated $15.1 million in revenue in the first quarter from the deal with Toyota. That was slightly more than the $14.4 million generated in last year's first quarter.

This is a small chunk of change compared to Tesla's total first-quarter non-generally accepted accounting principles revenue of $713 million. Tesla's likely made the move as its own electric crossover, the Model X, is coming to the market next year. While there will be a substantial gap in the price points between the electric RAV4 and the Model X, Tesla apparently wants to keep any advantages of producing those battery packs to itself.

Tesla is also faced with a new front in its battle to sell its vehicles directly to consumers. Some "anti-Tesla" language has been added to state legislation in Missouri that would explicitly require consumers to buy vehicles through franchise dealers, according to Bloomberg.

"This extraordinary final-hour maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri," according to a statement from Tesla, as reported by Bloomberg.

In other automotive news, Ford (NYSE: F  ) released some interesting facts surrounding its very popular line of EcoBoost engines. Ford recently sold its 500,000th EcoBoost-equipped F-150 and claims those engines have saved an estimated 56.8 million gallons of gas on an annual basis.

Since 2010, Ford has accounted for 91% of industry growth in V6 truck sales, and the next generation 2015 F-150 looks to continue that trend.

"We expect those numbers to hold for the rest of the year," said Doug Scott, Ford truck group marketing manager, in a press release. "It really is amazing when you consider we are doing that with just two V6 engine choices – the 3.5-liter EcoBoost and the 3.5-liter Ti-VCT engine. When we come out with the new 2015 F-150, we will offer three different V6 engines, so there is potential for further growth."

Fuel economy, even in trucks that are often considered as work tools, is becoming more of a purchasing factor. That's big news because Ford is clearly a step ahead of competition with its EcoBoost engine lineup. If the 2015 F-150 is a major jump forward in fuel economy, as it is intended to be, it could push sales in America's most profitable vehicle segment much higher for Ford -- a big win for the company and its investors.

Investors would be wise to watch the launch of the 2015 F-150 because this is the first time aluminum has been used on such a massive scale in the automotive industry. If everything doesn't go according to plan it could put a dent in Ford's profitability in the near-term. 

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 12, 2014, at 8:33 PM, dlwatib wrote:

    The RAV4 decision was Toyota's, not Tesla's, “Toyota is expected to end the current RAV4 EV model this year." It is well known that Toyota has made a major investment in fuel cell technology. Obviously they wish to capitalize on that investment by building FCVs for ZEV compliance.

    Ford is to be commended for the F-150. However, GM (Silverado and Sierra) and Chrysler (Ram) have their own offerings that are also extremely popular. Ford can't afford to rest on its laurels. Ram in particular, was able to take the forefront with increased sales while the other two languished under heavy snow loads. Meanwhile GM has been concentrating on profitability, not sales volume.

  • Report this Comment On May 13, 2014, at 10:05 AM, TMFTwoCoins wrote:


    Thanks for the heads up, I wasn't aware that it was Toyota's decision and not Tesla's.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2953963, ~/Articles/ArticleHandler.aspx, 9/3/2015 12:47:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Daniel Miller

As a Motley Fool Industrial Specialist, I use my marketing and business background in the automotive industry to evaluate major automakers and other large industrial corporations. Follow me on twitter for tweets about stocks, cars, sports, and anything I find amusing.

Today's Market

updated 3 hours ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 4:36 PM
^DJI $16351.38 Up +293.03 +1.82%
F $13.87 Up +0.15 +1.09%
Ford CAPS Rating: ****
TSLA $247.69 Up +9.06 +3.80%
Tesla Motors CAPS Rating: **