In the United States, electric-vehicle (EV) sales are reaching record levels. Cox Automotive recently updated its U.S. forecasts, predicting that total new-car sales for this year will reach approximately 15.4 million units, surpassing last year's figure of 14.2 million but still falling behind pre-pandemic sales, which were close to 17 million. When it comes to EVs, unit sales for this quarter are expected to reach around 300,000—a 48% increase compared to the previous year—and account for a record-breaking 8% of new-car sales.
However, the positive news about EV sales is accompanied by concerning information regarding dealer inventories. Currently, EV dealer inventories are standing at 97 days of demand, while traditional vehicles have an inventory of only 57 days. This suggests that the industry has produced an excess of EVs. Ford Motor's U.S. EV sales have seen a 6% year-over-year increase through August, and Tesla has experienced a 30% growth in the first half of the year compared to the same period last year. Some of Ford's growth can be attributed to production delays, but there is also an issue with consumer demand for EVs.
According to Cox's projections, in California, EV sales are predicted to account for 23% of all new-car sales in the third quarter. In contrast, in Michigan and Ohio—states where Ford and General Motors have assembly plants and a large number of employees—EVs only make up 3% of new-car sales. One contributing factor to the low demand in these regions is cold weather, which can decrease the range of EVs by approximately 20%-25%. A possible solution to this issue could be heating the cabin while the car is plugged in.
To encourage more customers to purchase EVs, Ford and GM need to address these concerns. They could provide customers with more information about the impact of cold weather on EV range and also offer additional incentives or home-charging hookups to boost sales. The EV industry has moved beyond the early-adoption phase, where any new and trendy model would sell easily. Now, it's crucial for manufacturers to focus on smart marketing strategies and incentives.
Recently, Hollywood writers and the studios reached a tentative agreement, putting an end to a nearly five-month strike. However, Ford Motor made the decision to suspend the construction of a $3.5 billion EV battery plant that would have utilized Chinese battery technology. In addition, auto workers expanded their strike against both Ford and General Motors. The Federal Trade Commission and 17 state attorneys general filed a lawsuit against Amazon.com, accusing the company of using anticompetitive and unfair strategies to maintain its monopoly power. Furthermore, a New York State judge ruled that former President Trump fraudulently inflated the value of his assets. Lastly, China Evergrande Group suspended trading in Hong Kong after its founder came under police surveillance.
In recent news, Amazon has invested $1.25 billion in AI firm Anthropic, and this investment could potentially increase to $4 billion. Additionally, Wells Fargo has agreed to partner with asset manager Centerbridge in a $5 billion private credit fund aimed at providing loans to midsize companies. Notably, Abu Dhabi's sovereign-wealth fund and Canadian pension fund British Columbia Investment Management have already committed to providing equity for this fund. Furthermore, start-up food delivery service Wonder Group has announced its acquisition of Blue Apron for $103 million.
- The Institute for Supply Management is set to release its Manufacturing Purchasing Managers' Index for September. Analysts predict a reading of 48, slightly higher than the August figure. The ISM will also release its Services PMI on Wednesday, with expectations of a reading of 53.5, one point lower than in August.
The Bureau of Labor Statistics will release the Job Openings and Labor Turnover Survey for August. Economists anticipate approximately 8.8 million job openings, remaining relatively stable compared to July data. It is worth noting that although job openings have declined by 27% since their peak in March 2022, they still remain above historical averages. Federal Reserve Chairman Jerome Powell emphasized that while the gap between jobs and available workers has narrowed, there is still a greater demand for labor than there is a supply of workers.
This day marks the release of various economic updates.
The BLS Releases September Jobs Report
The highly anticipated September jobs report has been released by the Bureau of Labor Statistics (BLS). Market consensus suggests that nonfarm payrolls will experience a modest increase of 155,000. Additionally, economists expect the unemployment rate to slightly decrease from 3.8% to 3.7%.
Over the past couple of years, job growth has been robust, but recent data indicates a significant slowdown. The average monthly increase in jobs for the past three months, ending in August, was approximately 150,000. This contrasts with the impressive average gain of 438,000 jobs per month over the preceding two-year period, ending in May 2023.