Last week was a big vacation week for many, but in Detroit and around the world, the auto industry continued to generate big headlines. Here are a few of the key developments you may have missed if you were on vacation.
Tesla lost more money. Does it matter?
So what does it mean? It means, as my fellow Fool Morgan Housel pointed out last week, that Tesla's still a startup for all intents and purposes -- and it's not a surprise to see a startup burning money. The company spent more in the second quarter because it's throwing more resources into developing its upcoming Model S sedan, the mass-market model that the company hopes will carry it to profitability. And while this is probably pointing out the obvious, it's spending more now because it can, thanks to the money raised by its initial public offering in late June.
Tesla says it's on track to launch the Model S in 2012, having hit some development milestones during the quarter. The company also cut a deal with Toyota
Long story short: Despite the big jump in the loss column, it appears to have been a good quarter for Tesla. I don't see anything in last week's results to worry investors who believe in the company's long-term prospects. But for those thinking about jumping in, think carefully. Tesla's odds of success are still very much an open question.
Chrysler lost more money. Does it matter?
Meanwhile, back in Old Detroit (or at least Auburn Hills, Mich.), the smallest of the once-Big Three posted its own net loss of $172 million for the second quarter. That's certainly an improvement over the $197 million net loss Chrysler posted in the first quarter, with revenues up 8.2% to $10.5 billion. But it's not exactly the hoped-for recovery. What's going on?
The story is pretty simple. Chrysler is still treading water with an increasingly stale product line, and sales remain sluggish while the company awaits new products due later this year. On the other hand, the company is undergoing a huge transformation as it gets integrated into new parent Fiat's way of doing things, and Fiat's cost-cutting and organizational changes have already produced positive results.
CEO Sergio Marchionne -- who emphasized that Chrysler has more cash on hand now than it did last quarter, or last year -- is standing by his prediction that Chrysler will break even or generate a small operating profit this year. But while Marchionne has hinted that an IPO lies in Chrysler's future, it won't happen anytime soon. While General Motors' turnaround is gaining steam and Ford
BYD dials it back
BYD, the Chinese battery maker and carmaker owned in part by Berkshire Hathaway
I've poked fun in the past at BYD's somewhat cheeky (and certainly audacious) plans for world domination, and much as I'd like to poke fun at it here, I think this story is decidedly mundane. Despite its ambitious overseas plans, BYD is still very much a Chinese-market company, and growth in China's auto market is slowing. BYD said that it now expects China's auto market to grow by about 20% this year, down significantly from nearly 50% in 2009.
Ford gets paid
In another sign of health at Ford, the automaker announced that it would be sending its executive chairman his first paycheck in five years. The lump-sum payment of $4.2 million in salary and $11.6 million in stock options represents what Bill Ford, who has declined to take a salary for five years, would have earned between 2008 and today -- minus a 30% pay cut imposed on other top executives in 2009 and 2010.
Bill Ford announced Monday that he would use $1 million of this payment to create a scholarship fund for the children of Ford employees.
Fool contributor John Rosevear owns shares of Ford. Berkshire Hathaway is a Motley Fool Inside Value pick. Apple, Berkshire Hathaway, and Ford are Motley Fool Stock Advisor recommendations. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.