CAR WARS - AUTOLINE THIS WEEK 2018

EV Channels Review

This episode of Autoline This Week features John Murphy of Bank of America Merrill Lynch presenting a contrarian view on the U.S. auto market, predicting continued growth into the 2020s, with a seasonally adjusted annual rate of 20 million units by 2018. Murphy attributes this optimistic outlook to a long replacement cycle driven by an aging vehicle fleet (11.5 years average age) and increasing miles driven. He argues that despite strong fundamentals, domestic automakers like Ford and GM are undervalued by Wall Street due to persistent skepticism about future downturns. The discussion also touches on the challenges traditional automakers face in investing in new technologies like ride-sharing and autonomous driving, contrasting it with the capital-raising ability and different financial standards applied to tech-focused newcomers like Tesla. While acknowledging Tesla's innovation, Murphy maintains a bearish stance due to its high capital intensity and cash burn. The segment also explores the potential of mobility services as a significant growth area beyond traditional vehicle sales and addresses concerns about rising loan delinquencies and Fiat Chrysler's debt situation.