Vehicle Makers Step Up Their Battery Production Efforts

Toyota and Stellantis to Open US Battery Plants

From Toyota (TM) to Stellantis (STLA), vehicle makers are doubling down on their electric vehicle production efforts. As demand for EVs surges and countries strive for zero emissions, automakers are putting the pedal to the metal, pouring tens of billions of dollars into opening new EV factories and producing batteries needed for EVs.

Toyota and Stellantis, the maker of Jeep, took big steps in that direction yesterday. Each announced separately that they are building US-based battery factories. Toyota plans to spend $3.4 billion through 2030 for US battery production. Meanwhile, Stellantis said it is teaming up with LG Energy Solution to build a new battery plant in the US.

Different Strategies

Vehicle makers are taking different approaches to bulking up their battery production capabilities. Toyota is building its EV batteries in-house, a path Ford (F) said it will eventually go down. In contrast, Stellantis and GM (GM) are teaming up with outside battery makers.

Either way, the increased focus on battery production comes as the vehicle makers set lofty goals for future EV sales. Stellantis, for example, expects 40% of its US sales to come from EVs by 2030. Ford expects its entire European lineup to be EVs by 2030.

Foxconn Shares EV Prototypes

It is not only traditional vehicle makers chasing the EV market. A number of startups hoping to be the next Tesla (TSLA) are also making moves in the industry. Meanwhile, large companies specializing in other industries are also working to get a piece of the EV pie. Foxconn, the world’s biggest contract electronics manufacturer, is a great example. Yesterday it rolled out three electric-vehicle prototypes which it designed with a Taiwanese carmaker. Foxconn wants to build vehicles which can be sold under other brands.

As many kinds of companies try to get a piece of the EV market, it will be interesting to see which of their strategies pay off down the road.

Refinancing Your Auto Loan Could Free up Some Cash

We hate to say it, but when you first bought your car, you may not have gotten the best deal on your loan financing. We’d like to change that.

Refinancing is the process of getting a new loan that essentially replaces the existing loan. The process involves filing a new loan application and lenders will generally evaluate potential borrowers on factors like their credit score and history in order to determine their new loan terms and interest rate.

Generally, borrowers refinance in order to secure a better interest rate or preferable terms. For example, a lower interest can help borrowers pay less in interest over the life of the loan.

Sometimes, borrowers may extend their repayment to secure lower monthly payments. This can make the loan payments more affordable on a monthly basis but ultimately makes the loan more expensive in the long run.

SoFi’s online marketplace, Lantern, can help you quickly compare rates from a network of lenders all at once. Just fill out a simple form and get pre-qualified in minutes without leaving the couch or giving your SSN.

Workers Strike Across Industries

Labor Activists Gear Up for Strikes

Thousands of workers across industries are currently on picket lines, demanding higher pay and better benefits.

Labor activists argue that many of these workers were considered essential during the pandemic, but were not treated as they should have been by employers. Unions are pushing for more from companies across America. So far in 2021, there have been 176 strikes, with 17 launched in October so far.

Workers Strike at Kellogg and Deere

At Kellogg (K), the cereal and packaged foods company, about 1,400 workers at plants in Michigan, Nebraska, Pennsylvania, and Tennessee have been on strike since October 5. They are demanding better wages and benefits. These striking employees represent about 5% of Kellogg’s worldwide staff.

Meanwhile at Deere (DE), the farm machinery maker, more than 10,000 workers went on strike at five plants last week. The move came after the United Auto Workers union rejected the contract which Deere offered workers who wanted higher wages and better benefits. Of Deere’s hourly workers, 90% who are represented by the UAW agreed to go on strike, marking the biggest strike by a private company’s workers since a six-week UAW strike at GM in 2019.

Unions Have an Uphill Battle

Though strikes are taking place, unions are up against significant challenges. Union membership has been declining for decades. As of 2020, just 11% of workers are union members, down from 20% in 1983. However, 68% of Americans view unions favorably, the highest percentage since 1965.

Unions have traditionally faced an uphill battle when taking on companies. However, with labor shortages continuing, workers have some bargaining power. It will be interesting to see if there are more strikes in the months to come.

Zillow Presses Pause on Buying Homes Amid Constraints

Labor Shortages Hamper Zillow’s Home Flipping Business

Online real estate company Zillow (ZG) has put the brakes on buying homes in the US for the rest of this year. Zillow is working to reduce the backlog of properties it already purchased but has yet to sell. In the second quarter alone, Zillow purchased over 3,800 homes.

Zillow blamed the problems it’s facing moving its inventory on labor constraints and a competitive real estate market. The real estate company said it is not immune to constraints which have hurt its ability to construct and renovate homes, and close sales. That has created a backlog of renovations and closings.

Investors React Negatively to Zillow’s Plight

Zillow’s decision to stop buying homes in the US caused its stock price to tumble yesterday. Shares of Zillow are down 31% so far this year. This is a far cry from 2020, when Zillow’s stock more than tripled.

Zillow made a name for itself by listing homes on its website and assigning values to properties, which it called “Zestimates.” It has expanded its business since then, branching into home flipping in 2018 when it launched “Zillow Offers.” Through the service, homeowners can request an offer on their house. Then, Zillow’s proprietary algorithms determine a price. Zillow buys it, makes light renovations, and puts it back on the market. Zillow’s flipping business gained traction during the pandemic. However, it is now taking a brief hiatus from buying homes.

Opendoor Open for Business

Zillow said it will market and sell homes for the rest of 2021 only, enabling the company to focus on the deals it has under contract. While Zillow is somewhat overwhelmed at the moment, its rival, Opendoor Technologies (OPEN), appears to be doing fine handling more deals. In response to Zillow’s homebuying pause, Opendoor said it is still purchasing homes and has put the infrastructure in place to ensure it can handle increased demand. This sent Opendoor’s stock price higher yesterday.

Zillow’s homebuying aspirations aren’t over. They are just on hold for the remainder of the year. It will be interesting to see how this choice impacts Zillow’s business both in the short term and the long term.