New Car Sales Were Abysmal in Q2 But Summer Looks Even Murkier

The deals and incentives are drying up.

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New Car Sales Were Abysmal in Q2 But Summer Looks Even Murkier © New Car Sales Were Abysmal in Q2 But Summer Looks Even Murkier

Good morning and welcome back to Speed Lines, The Drive's daily roundup of what matters in the world of cars and transportation. On tap for today: more bad news for car sales in June and Q2, what electrification means for jobs and Uber's "no mask, no ride" policy. 

A programming note: Speed Lines will not appear tomorrow as we are off for the July 4 long weekend. And I myself have better things to do than write it. You'll just have to get along without me, somehow. 

Sales Way Down, Future Uncertain

With rampant unemployment and Americans staying inside, we all knew that new car sales—one of the most solid indicators of economic health—would be way down in the second quarter of 2020, regardless of how many dealers learned to finally sell online. So how bad was it in Q2? Pretty bad. Maybe not quite as bad as some analysts predicted, but bad.

A chart from Automotive News with all currently available data shows double-digit sales declines pretty much across the board: year over year, Nissan was down 50 percent, Fiat Chrysler and BMW were down 39 percent, General Motors as a whole was down 34 percent and Toyota was down 35 percent. Data from Ford, Mercedes-Benz and a few others wasn't yet available. (Two of the rare bright spots were Mazda, down "only" 9 percent year over year, and Tesla, which at 90,650 deliveries was just about 5,000 cars off Q2 2019.)

As The Wall Street Journal reports, sales being down by about a third across the industry wasn't quite as bad as some had predicted. Sales were buoyed by incentives, deals and the stimulus package. But all those deals are drying up and lawmakers are weeks away from deciding on another stimulus. That's where things get tricky moving into summer:

I'll add this from Automotive News—a quote from Cox Automotive Chief Economist Jonathan Smoke:

That's where things get cloudy. The OEMs can't keep up the crazy deals forever, and inventory already isn't great in many areas thanks to factory shutdowns. I suppose the best thing automakers can hope for in July and beyond is consistent production and more stimulus cash in Americans' pockets.

'The Green Jobs Revolution' May Not Apply To Cars

Though the pandemic has thrown a sizable wrench into things, for automakers globally, it's the beginning of the end for the era of internal combustion. Spurred on by tightening regulations, every car company is figuring out how to pivot to electric vehicles. But as we've discussed here on Speed Lines before, EVs generally need fewer parts and thus fewer workers to make them. The electric auto industry may not be as sizable an employer as the current one is. 

That means fewer opportunities to move into middle-class living, as car production jobs have traditionally been, as Bloomberg reports in this story about the closure of a Spanish Nissan plant amid that company's wider shift to EVs:

Battery costs have gone down 87 percent over the past decade and ones with cost parity with traditional cars are just on the horizon. But as the auto industry pivots to becoming a much greener one, a lot of jobs will likely be left behind. That story's worth a read in full—expect to be hearing a lot more about this trend in the years to come. 

'No Mask, No Ride'

July 4 weekend is upon us here in America, and on a normal year that would likely entail a lot of going out, drinking and partying. It still probably will! You should probably stop going to bars right now, for obvious reasons. But if you do end up drinking, calling an Uber is better than driving, as ever.

When you do, you'll have to wear a mask, as will your driver. USA Today reports the ride-hail giant is extending its "No Mask, No Ride" policy "indefinitely throughout the U.S. and Canada." Previously, that rule was in place just through the end of June. Now it's going to be the way forward for a while. 

And Uber is going to Tech Company this mask requirement, because of course it is:

At any rate, Uber's not messing around with coronavirus and neither should you.

On Our Radar

Tesla Stock Closed at a Record High After a Leaked Email. It Could Join the S&P 500 Soon. (Barron's)

Daimler CEO warns of ‘drastic’ pay cuts, deeper restructuring (Automotive News)

VW, Continental offices raided in German diesel-cheating probe (Detroit News)

Read These To Seem Smart And Interesting

Could Teleporting Ever Work? (Gizmodo)

The virus didn’t stop a Washington socialite from throwing a backyard soiree. Then the tests came back positive. (Washington Post)

What Went Wrong at the Los Angeles Times (Vice)

Your Turn

What does the rest of this year look like to you in terms of car purchases? 

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