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BenzingaEditorial

Traditional Automakers Needs Cutting-Edge EVs to Match Their Green Ambitions

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Ford (NYSE: F) and General Motors (NYSE: GM) have both started off the year strong, seeing double-digit gains. GM stock sits comfortably up 20% from where it started at the beginning of 2021, and at one point in January it was up over 35%. Ford stock saw a similar movement, surging up 35% and then settling around 23% up. Both companies are likely seeing more market attention because of their ambitious EV plans and they are not the only ones who are upping their game in an effort to catch up in the EV race and give Tesla (NASDAQ: TSLA) a run for its money.

GM

The company has enjoyed a soaring stock-market valuation on the back of its EV plans, but this doesn’t change the fact that it’s lagging its peers with product launches. In 2019, GM faced United Auto Workers strike, in 2020, the pandemic forced it to close its plants and in 2021, shortage of semiconductors. It is a good thing that GM learned something from its 2008 dramatic saga and has been fortifying its balance sheet since, helping it to survive the pandemic with surprisingly little financial trauma. A strong rebound in car demand in its key U.S. market combined with delaying some capital spending also helped. The largest U.S. auto maker by sales expects the global microchip shortage to cost it between $1.5 billion and $2.5 billion this year, similarly to its Detroit peer.

GM is accelerating investments in electric and driverless vehicles. In January, it revealed it aims to phase out tailpipe emissions from its light-duty vehicles entirely by 2035. The Hummer truck will be the first vehicle to come out from its much-hyped Ultium battery platform, followed by the Cadillac Lyriq in 2022 and they both need to measure up very convincingly against the mounting competition, or the days of GM’s green halo are numbered.

Ford

Ford’s all electric Mustang Mach-E is starting to arrive in dealerships, which will be followed by the firm’s first E-Transit commercial van later in the year and the beloved all-electric F-150 pickup scheduled for the mid-2020s. Last Wednesday, the company vowed to phase out gas cars in Europe by 2030 as it revealed it would invest $1 billion in a German factory Cologne.  This move is part of a broader plan to nearly double its prior commitment to an electrictransition as the legendary automaker plans to invest $22 billion in EVs and an additional $7 billion in autonomous vehicles until 2025 to fund the development of Ford’s key product lines, including pickup trucks, commercial vans and SUVs. The legendary automaker is then preparing to expand its dedicated EV manufacturing capacity around the world, building on its current sites in Michigan (F-150), Missouri (E-Transit), Canada (SUVs), and Mexico and China (Mach-E). In addition, Ford has partnered with Google (NASDAQ: GOOG) to benefit from the tech giant’s operating system, apps and services in its EV and autonomous vehicle designs.

The Blue Oval is determined to break constraints, expand battery capacity, get on top of costs and expand its electric vehicles portfolio as its CEO Jim Farley assured investors that “the transformation of Ford is happening.”

Porsche

The sports car manufacturer Porsche (OTC: POAHY) has announced plans to invest $18.1 billion in the electrification of its vehicles over the next half of a decade as it aims EV to make 80 percent of its sales by the end of the decade. The CEO Oliver Blume told German newspaper Bild am Sonntag that more than 20,000 units of the fully electric Porsche Taycan were shipped last year with a starting price tag of $97,029.

Volkswagen

Volkswagen (OTC: VWAGY) launched its flagship new EV, the ID.3., last year. Half of a decade and nearly $50 billion into the auto industry’s biggest bet on electric vehicles, the world’s largest car maker has outspent all rivals in a global bid to challenge Tesla. Volkswagen said it would phase out production of gasoline-powered vehicles by 2035.

BMW

Improving economic outlook, a Brexit deal and its plans to increase its share in its Chinese joint venture from 50% to75% in 2022 should all fuel BMW (OTC: BMWYY) to regain its pre-pandemic operating margin target in the range between 8% and 10%.

Although the company is very confident it can make it alone, electric vehicles are expensive to develop and that makes them less profitable. The big investments in EVs require the premium carmaker to simplify its vehicle portfolio. It plans to reduce complexity by reducing engine variants and options for different vehicles, scrapping features customers don’t use, plus overhauling software to focus on a simpler and more efficient way of building vehicles. In 2020, BMW’s global EV sales rose 31.8% compared 2019 and this year, BMW plans to double them. According to polls two thirds of Chinese consumers have said they would switch to other brands if they provide a better digital experience and that is what the premium brand is focusing on as EVs still account for a small portion of its sales.

Outlook

Global EV sales grew by 43 percent through 2020, despite the impacts of the coronavirus pandemic which shattered traditional car sales. The advantages that these legacy automakers have are their developed supply chains, production knowledge, and economies of scale. But, electric vehicles are more about software than hardware so the rules of the game are entirely different as producing exquisitely engineered ICE cars doesn’t translate into being tech savvy to create an efficient and affordable EV. The only thing certain is that change is coming and traditional automakers must move faster. The global transformation of the industry will take roughly a decade, and it will happen with or without these iconic automakers.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

BMW, XPENG and Worksport Switching Gears Forward

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The EV revolution is happening with governments and automakers going full speed ahead to combat carbon emissions with all-electric vehicles. Many players joining forces in the attempt to win the race with the power of synergy. Even the almighty Toyota Motor (NYSE: TM) knew better than going at it alone as it partnered with Panasonic Corporation (OTC: PCRFY) to form Prime Planet Energy & Solutions to develop batteries that can be used over and over again anytime, anywhere. In June, Renault SA (OTC: RNLSY) revealed it formed two major partnerships to specialize in the design and production of EV batteries. In March, Volkswagen (OTC: VWAGY) announced it aims to build several “gigafactories” in Europe by 2030. This week, we got a few more expansion updates.

BMW receives battery ‘fuel’

Bayerische Motoren Werke Aktiengesellschaft (OTC: BMWYY) is also working on new concepts and ideas related to batteries.  Its project BMW-UK-BEV that is centered around the development of a long-distance EV battery has been awarded $36.07 million in joint funding from the industry and the U.K. government. The U.K. is determined to stop selling new diesel and gasoline cars and vans by 2030, the Oxford-based project is one of four to receive funding as new technologies that address range anxiety are crucial to wider EV adoption.

XPeng is is quadrupling capacity

The Chinese EV maker announced it will quadruple capacity as it signed an agreement with a Zhaoqing Smart EV Manufacturing Base expansion project that will boost capacity to 200,000 units annually from 100,000 units. The expansion will enable Xpeng Inc (NYSE: XPEV) to capture the anticipated increase in consumer demand for its smart EVs. In addition to Zhaoqing, XPeng is building manufacturing capacity in Guangzhou and Wuhan, which should enable it to make 400,000 EVs a year, four times what it produces today.

XPeng has delivered about 58,000 vehicles over the past 12 months, behind 76,000 vehicles from NIO Inc (NYSE: NIO) and 59,000 by Li Auto Inc (NASDAQ: LI).

All these three U.S.-listed Chinese EVs are expanding production to meet rising demand. Nio recently announced it will more than double its current production of 100,000 vehicles to 240,000 units a year. Li Auto raised more money in August selling stock in Hong Kong, part of which will commit to doubling capacity to 200,000 units a year.

Worksport announcing Pre-Order Date Solar Covers

Worksport moved into its new headquarters and 55,000 sqaure feet manufacturing facility. As its tonneau cover business continues to grow, Worksport Ltd (NASDAQ: WKSP) is getting ready for pre-production of its TerraVis solar-powered tonneau cover and its extension, the standalone COR battery system. The company also revealed it is expanding its EV ecosystem with a new product termed NPEV that aims to contribute to making transportation greener. Today Worksport announced its anticipated Pre-Order platform will go live on 21ste of September.

With a physical foundation and the right partners, as it joined forces with two EV players on two upcoming electric pickups, Worksport seems ready for the next chapter of its growth story that is bound to bring new technologies to the EV table.

These updates make it clear that capacity is expanding to meet rising EV demand. In July alone, EV sales grew about 200% YoY, and approximately 5% from June.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Even Covid-19 Cannot End Disney’s Enduring Magic

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Disney’s (NYSE: DIS) blowout third quarter that beat expectations across the board was fueled by growth in Disney+ subscribers and parks returning to profit. But now that Walt Disney World’s 50th anniversary is around the corner, things are looking even better.

50th anniversary celebration

Walt Disney World is gearing up for its celebration which starts on October 1. Dining is returning to Orlando, Florida park as preparations are ongoing. The fact that normal operations are resuming at parks is a good sign that the company is on track when it comes to guest and travel confidence, which translates to an improved bottom line. The party tickets are sold separately from park entry tickets which implies an exponential growth as this segment was literally crushed by the pandemic one and a half year ago. The celebration will open a busy holiday travel season so it can be assumed that Disney stands to benefit from an increase in guest spending, from large purchases like annual passes to shopping for seasonal merchandise. As for the outlook, 2022 is looking brighter for the Parks, Experiences and Products segment.

Delta variant is looming

However, Covid continues plaguing the entertainment industry and the world for more than 18 months now, and there are fears that new variants will reverse the progress at Disney’s biggest money makers as theme parks and cruise lines are its lifeblood. Box office revenue also wasn’t exempt from the devastating blowdespite management trying to reinvent the release structure to drain as much benefit as possible. Streaming also resulted in a compensation-related and public lawsuit from Scarlett Johansson who found like many of her colleagues she was severely harmed by this model.

The White House steps in

On Wednesday, U.S. President Joe Biden met with several top U.S. leaders, including the CEO of Disney, Bob Chapek, as part of his ongoing effort to push companies to require workers to be be vaccinated against COVID-19 as the delta variant rages on. Participants in the meeting also included Microsoft Corp (NASDAQ: MSFT) and Walgreens Boots Alliance Inc (NASDAQ: WBA). However, corporations such U.S. automakers General Motors Co (NYSE: GM) and Ford Motor Co (NYSE: F) are encouraging employees to get the vaccine, but they remain quiet about the executive order. The White House hopes that this meeting will serve “as a rallying cry for more businesses across the country to step up and install measures to boost vaccination rates.

Luckily for Disney that it released Disney+ when it did

Direct to consumer division that includes several streaming services besides Disney+, including ESPN+, Hulu has benefited from people being much more at home. Launched in November 2019, just a few months before the pandemic struck, Disney+  has literally kept Disney afloat while the other divisions struggled to keep their heads above water. Without this division, Disney would not have a rare bright spot over the past year and a half.

The magic lives on

Almost a century old company has endured many things, but the COVID-19 pandemic was by far the worst crisis that the entertainment giant faced as its business model was perfectly exposed to this invisible enemy. Although COVID held its cash-cows hostage, the power of Disney goes beyond the physical experience. Back in August, Target (NYSE: TGT) revealed it will nearly triple the number of Disney shops inside its stores to more than 160 by the end of year, in an attempt to increase foot traffic ahead of the anticipated holiday season. Target hopes that Disney can help it stand out and raise its toy department’s price point. Over almost a century, Disney’s brand evolved while staying loyal to its core values of its founder. In doing so, it became a synonym for storytelling that brings magic to life. Its “once upon a time” earned it an iconic status that made this global brand stronger than any virus- related fear.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Oracle Is Aiming for the Cloud

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The enterprise software maker reported its fiscal first quarter revenue on Monday, with its top segment, as well as hardware, missing expectations. Revenue came below expectations as Oracle Corporation (NYSE: ORCL) announced a program during the quarter to encourage customers to adopt its public cloud services in the quarter by reducing or even eliminating its licensing support costs.

Encouraging migrations to the cloud

The support rewards program offers customers who make new commitments to buy Oracle Cloud Infrastructure services to earn rewards that can reduce or even eliminate their Oracle on-premises technology licensing support bills.

Fiscal Q1 figures

For the quarter that ended on August 31st, revenue increased 4% YoY as it amounted to $9.73 billion. Refinitiv reported analysts expected $9.77 billion, whereas the prior quarter’s growth rate was double at 8% respectively.

The two new cloud businesses

The cloud license and on-premises license segment brought in $813 million to the revenue table, down 8% and lower than the $859.7 million consensus. Cloud is fundamentally a more profitable business compared to on-premise. Management expects operating margins to be the same or better than pre-pandemic levels. The company does not disclose revenue nor operating income from its two services that now make 25% of its total revenue with an annual run rate of $10 billion.

The largest business segment, cloud services and license support, generated $7.37 billion in revenue, which is up 6%, although below the StreetAccount consensus estimate of $7.41 billion.

The hardware unit generated $763 million in revenue, down 6% and below the $778.5 million estimate.

Increased capital expenditures

Oracle’s capital expenditures exceeded $1 billion, more than doubling compared to the $436 million in the year-ago quarter as executives invested to build the necessary infrastructure to meet expected cloud demand.

To expand and strengthen its footing in the cloud computing space, Oracle, which counts Zoom Video Communications (NASDAQ:ZM) as one of its customers, has been heavily investing in opening more data centers to rent to clients as they shift their operations to the cloud.

 Fiscal Q2 guidance

For the undergoing quarter, CEO Safra Catz expects earnings per share to come in the range between $1.09 to $1.13 on 3% to 5% revenue growth. Analysts polled by Refinitiv are expecting a 5% revenue growth to result in adjusted earnings of $1.08 per share.

A crowded space

Austin, Texas-based company whose shares have risen about 40% year to date is in a crowded space of rivals no other than tech titans Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), Salesforce.com (NYSE:CRM) and IBM (NYSE:IBM) Corp that makie it much more challenging to benefit from cloud computing trends.

In a nutshell, Oracle fell short of Wall Street expectations because of incentives it offered to its customers in an attempt to position itself among the clouds.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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