Automotive supplier Delphi Automotive Plc (DLPH.N) on Wednesday said it plans to spin off operations tied to internal combustion engines and focus on technology for electrically powered and self-driving vehicles, boosting its share price and highlighting the challenges for legacy auto industry players.
Vehicles driven by humans and powered with petroleum will dominate roads from Shanghai to San Francisco for years to come, but investors who supply the capital to produce such vehicles are signaling a belief that after a century-long run, internal combustion cars are a sunset industry.
The most dramatic symbol of this turn is electric luxury car maker Tesla Inc's (TSLA.O) ascent this year to a higher market capitalization than either Ford Motor Co (F.N) or General Motors Co (GM.N). Despite a recent slump in U.S. sales, the Detroit giants are robustly profitable, while Tesla has yet to earn a full year profit. Tesla reports first-quarter results later Wednesday.
Delphi shares rose as much as 12 percent on Wednesday after the company announced its plan to separate into two entities - one dedicated to internal combustion technology and the other focused on electrification and automation. The shares closed at $87.01, up nearly 11 percent, representing about $2 billion in added market value.
Full story at http://reut.rs/2pg6xbt
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