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3rd Quarter sales numbers have been released by the US auto manufacturers. It looks like some manufacturers are starting to dig out of the hole created by covid-19 and the lockdowns in 2020. Most notably is Toyota North America which is showing a huge increase of almost 28% over 9 months of sales compared to 2020. They took the top US sales spot in Q2 of this year beating GM by just a couple hundred units and continued to keep the pedal down in Q3 beating GM by over 120,000 units. I am still doing my best to figure out why GM is down over 30% from last year in Q3 sales but Toyota, Volvo, Tesla and especially Hyundai have been able to figure out how to navigate the parts shortage and continued increased health protocols. This is even more surprising when you look up the salaries of the 2 companies’ CEOs. Mary Barra, CEO of GM, had a salary of $23.6 million dollars in 2020 which is about $2 million more than she made in 2019 despite the company making less money in 2020 and employing about 10,000 less employees. When you compare this to the CEO of Toyota Motors, Akio Toyoda, who makes 185 million Yen which is a little over $1.6 million in salary. It really makes me wonder how GM can justify paying executive salaries like this just to get beat by your competitor that pays their CEO about 7% of what GM pays theirs. Not to mention all of the other executives at GM that make ridiculous money like their CFO at $6.3 Million and President at 9.6 million and North American President at $8.1 million. Maybe I am missing something but I do not understand how these sales numbers justify these wages and continued raises at companies that are WAY underperforming. Well I guess if they are on the verge of crashing their companies their friends in the US government will be there to bail them out. Why can’t the rest of us get the welfare that some of the largest companies with the wealthiest executives in the world get?
China is one of the countries leading the way for electric vehicle sales. Over 1.5 million EVs have been purchased in China in the first 9 months of 2021. With that being said it is reasonable to say that they will be some of the first to encounter the problems with electric vehicles. China’s National Day holiday is Oct 1st-7th, and many people travel to visit family during this time. This has led to charging stations having huge queves to use the chargers and with charging times being around an hour on average this has made travelling miserable for EV owners. One example given by a Chinese journalist is that the trip they always take is about 8 hours in a conventional car but the trip took 16+ hours because of the 2 stops needed to recharge the vehicle. This not only causes an issue for travellers but also for people maintaining the power grid as holiday travel overwhelms the current electrical infrastructure. I hope that the US auto industry is paying close attention to this as I could very easily see this as a major problem as the country transitions to EVs.
With auto manufacturers as a whole delivering far fewer new vehicles over the last almost 2 years than the market is used to, this has driven up used car prices. A few months ago I did a segment talking about the record used car prices and that trend is still continuing. September’s average used car prices are up 27% over September of last year and have increased 5.3% over last month. Until auto manufacturers figure out their supply chain problems I expect that this will continue.
Tesla’s CEO Elon Musk announced yesterday that Tesla will officially be moving its headquarters from Palo Alto California to Austin Texas. Musk recently moved to Texas himself stating he wanted to focus on SpaceX and their new starship being developed in Boca Chica Texas on the gulf shore and Tesla’s new Gigafactory in Austin. I suspect that leaving the state with the highest personal income tax and moving to a state with no income tax might also have played a bit of a role in making the decision for one of the most wealthy people on the planet.
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