MONEY Tech

Why Apple Won’t Buy Tesla

Tesla Model S
Tesla Tesla Model S

It doesn't make any sense.

According to Jason Calacanis, who bills himself as an “angel investor, entrepreneur, conference host, and podcaster,” Apple APPLE INC. AAPL -1.8% will spend $75 billion to acquire Tesla Motors TESLA MOTORS INC. TSLA -0.32% within the next year-and-a-half. While he listed a number of reasons for such a deal, his primary argument is that “once the [Tesla] Model 3 hits the road, Tesla’s market cap would make a deal with Apple a merger — not an acquisition.”

In other words, Calacanis expects such a sharp upturn in Tesla financials once it launches the more affordable Model 3 car that its market capitalization could be well north of what even Apple could afford — assuming, of course, Apple even wants to buy Tesla.

But this seems highly implausible to me.

Tesla is already quite richly valued

The first fundamental flaw with this claim is the idea that Tesla financials and market capitalization will skyrocket once the company is delivering relatively affordable electric vehicles in significant volumes. I would argue the current $25 billion market capitalization already bakes in some pretty high investor expectations.

To put this into perspective, current analyst consensus for Ford 2015 revenue — keep in mind that Ford is already in the high-volume, mainstream automobile game — sits at $143.7 billion, and its market capitalization is just shy of $64 billion as of this writing. Tesla trades at approximately 39% of Ford’s market capitalization even though the upstart carmaker is projected to generate just 4% of its 2015 revenue.

Of course, Tesla is a much higher-growth company, and it is far “sexier” than Ford, so I do not take issue with Tesla getting a richer valuation. The problem, though, is that the stock price today — at least, from what I can tell — already bakes in a lot of future success.

That means when or if Tesla succeeds in driving more volume and growing its revenue significantly, the financials might improve, but I am not convinced this could lead to the huge growth in the stock price that Calacanis predicts.

Apple would be better off buying its own stock

If Apple were to drop $75 billion on Tesla today (a three times premium to the current market capitalization), it is highly questionable as to when the company could see a return on that investment. Tesla has outright stated it does not expect to be profitable on a GAAP basis until 2020.

In this scenario, not only would Apple have to wait five years before a single cent of profit showed up on the income statement, but Tesla operations could actually drag on Apple. If the company owns Tesla, and Tesla is losing money, then that comes straight out of Apple financials.

Additionally, since Apple would need to buy Tesla with U.S.-based cash or with stock, the deal would either force the tech giant to issue shares, undoing the benefits of previous stock repurchases, or to issue a hefty amount of debt, which means paying interest on that debt. Alternatively, Apple could repatriate its foreign-held cash and get hit with a huge tax bill, but that would probably be the least likely option.

If Apple is really itching to spend $75 billion on something, it would be far better for the company to simply buy back stock. At least in this case, Apple would shrink the number of shares outstanding, immediately providing a meaningful boost to earnings per share. In my humble view, that would certainly be a quicker and easier way to juice the bottom line than to spend an exorbitant amount of money on Tesla.

TIME viral

Watch This Woman Prank Unsuspecting Dates With Her Mad Rally-Driving Skills

Now this is speed dating

Ford has created a hilarious video to advertise its new 2015 Mustang, timed for the run-up to Valentine’s Day.

The clip shows a pretty blond woman going in her new car to what appear to be several blind dates. But it’s a setup, because what the guys don’t seem to realize is that she is a professional stunt driver — and they are in for a real shock as she spins, drifts and tears around a parking lot.

“So what else do you look for in a girl?” she asks midspin.

Best first date ever.

Read next: Watch a Husband Surprise His Wife With the One Thing She Always Wanted

Listen to the most important stories of the day.

TIME Autos

Report Finds Security Risk in High-Tech Cars

Facebook from a wirelessly connected smartphone is seen on an autonomous dashboard.
Robyn Beck—Getty Images Facebook from a wirelessly connected smartphone is seen on an autonomous dashboard.

Wireless technology causes gaps in security and customer privacy

Vehicles that use wireless technology have major gaps in security and customer privacy, according to a report about to be released by U.S. Senator Edward Markey (D-Mass.)

According to the New York Times, the report says that the security measures used in cars are “inconsistent and haphazard.” Perhaps even more troubling is the report’s conclusion that most automakers don’t have the ability to find security breaches or respond when they happen.

“Drivers have come to rely on these new technologies, but unfortunately the automakers haven’t done their part to protect us from cyber attacks or privacy invasions,” Markey wrote in the report, according to the newspaper.

The report also found “a clear lack of appropriate security measures to protect drivers against hackers who may be able to take control of a vehicle.”

Markey’s office wrote the report after collecting data from 16 automakers: BMW, Fiat Chrysler, Ford, General Motors, Honda, Hyundai, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Porsche, Subaru, Toyota, Volkswagen and Volvo. Aston Martin, Lamborghini and Tesla did not respond to the information requests from Markey’s office.

This article originally appeared on Fortune.com.

MONEY Autos

That Blizzard Was No Match for the Chevy Colorado

This mid-size truck squeezes utility and power into a nimble package.

The snow was already falling when I climbed, ever so smugly, into the Chevrolet Colorado. There was no anxiety on my part, because Chevy’s new midsize offers available on-the-fly 4-wheel drive as well as a 4-low setting for off-roading, part of the Z71 package on my test vehicle. I was ready for whatever the road and Mother Nature served up.

Chevy reintroduced the Colorado in late 2014, sensing that there was a gap that a newly designed, mid-size pickup truck could fill. Ford had ceded some of that turf when it discontinued Ranger, and General Motors clearly feels that Toyota’s 10-year-old Tacoma and Nissan’s similarly aged Frontier are vulnerable, given that its marketing calls those pickups out directly. Already knighted Truck of the Year by Motor Trend, what Colorado (and GMC sibling Canyon) brings to market is a smartly designed and executed pickup at a reasonable price.

A couple of months ago, we demo-ed the GMC Sierra Denali 2500HD, a high-riding, 6,500-lb.-or-so truck that had an enormous V-8 Allison diesel engine paired with every kind of creature comfort in the cab. It was a dazzling combination of brute and beauty, but the price tag was a beast, too: around $64,000 fully tricked out.

The Colorado cuts that weight by more than a third and the price by more than half — the entry level price is around $20,000 — but still offers somewhat surprising comfort. And, while short on frills and add-ons, it covers just about everything you need. For instance, there are four USB ports to power phones and tablet. There’s a blessedly simple-to-use navigation/infotainment system that includes 4G LTE and a built-in WiFi hotspot. One-touch icons pop up on the 8-inch screen, allowing you to access the radio or Pandora or weather with minimum distraction. All systems should be this simple, but car companies seem to go out of their way to tech them up for no good reason.

One of the themes of the Colorado could be that it gives you less, but in a good way. It’s about six inches narrower than its full-size siblings. That might not mean much in rural areas, but in the city it’s the difference between nimble and not. Squeezing past double-parked cars in Manhattan’s crowded streets was relatively easy. You can buy the Colorado in extended cab and two crew-cab versions with either a very parkable 5-ft. 2-in. truck bed (which runs about 18 ft. in length), or a 6-ft. 2-in bed. One thing you get more of is mileage: about 25 miles per gallon combined.)

The Colorado’s city/country capabilities are what might make it a good fit for cities like Denver or Salt Lake or Burlington, Vermont. On the highway, the Colorado has car-like handling qualities in both steering and ride quality; on city streets, although you’re sitting up a bit, you don’t have the bumpy ride that pickups can produce. The truck is pulled along by either a 200-horsepower 4-cylinder front-wheel drive or a 305-hp sixpack, available in two- and four-wheel drive. I drove the 4WD Z71 Crew Short Box, designed for off-roading, which had the bigger engine. Price: $36,710, including the premium audio/info system.

Although I drove only the six-cylinder, it’s hard not to recommend it over the standard version. Despite the larger displacement, the V-6 is not the smoothest in acceleration, particularly in two-wheel-drive mode, but you’ll appreciate that power, which you really have to have if you are towing something. On snow-covered roads, the 4-wheel drive was comforting, with very smooth acceleration and power distribution. We also took the Colorado off road for a brief test up and down a relatively steep, snow-covered incline. Piece of cake.

Too bad the Blizzard of ’15 proved to be a bit of a flop in my area. Not so the Colorado — it lives up to expectations.

TIME Autos

The New Ford GT Is a Beauty

US-DETROIT-AUTO-SHOW
Geoff Robins—AFP/Getty Images The new Ford GT is introduced at the 2015 North American International Auto Show in Detroit on Jan. 12, 2015

Like, wow.

Ford Motors was not short on confidence this week.

After a nine-year hiatus, the iconic American automobile manufacturer unveiled the latest installation of the prized GT to ecstatic car aficionados at the 2015 North American International Auto Show in Detroit on Monday.

The new GT packs a 3.5-liter twin-turbocharged EcoBoost V6 engine capable of blasting out more than 600 horsepower. The car is set to hit production lines next year.

During a press conference on Monday, Ford’s executive chairman audibly scoffed after a reporter questioned the vehicle’s fuel efficiency, according to Bloomberg.

“You don’t buy this car for fuel economy,” said Bill Ford. “There’s a lot of fuel-saving technology in here, but I’d be lying if I said this was about fuel efficiency.”

On Monday, Ford also revealed the next-generation 2017 F-150 Raptor off-road pickup and the street-legal Shelby GT350R Mustang. The marque is reportedly coming off its biggest sales year since 2006.

[Bloomberg]

TIME ces 2015

Ford CEO: We’re Not Ready for Self-Driving Cars Yet

Newest Innovations In Consumer Technology On Display At 2015 International CES
Ethan Miller—Getty Images President and CEO of Ford Motor Co. Mark Fields delivers a keynote address at the 2015 International CES at The Venetian Las Vegas on Jan. 6, 2015 in Las Vegas,

Chief Mark Fields says the company is more focused on improving in-car technology

Ford Motor Company won’t sell self-driving cars until the company is ready to provide an experience that “satisfies customers in a profound way,” CEO Mark Fields told TIME Jan. 7 at the Consumer Electronics Show in Las Vegas.

Fields’ comments put Ford at odds with several of its competitors, which have increasingly used the annual technology confab to showcase the latest in automated driving technology. Earlier in the week, Audi successfully navigated what it calls a “piloted vehicle” from San Francisco to Sin City on highways without input from a human driver. BMW is showcasing a smartwatch app that lets users hail their car from a parking garage automatically. And Volkswagen has technology that learns drivers’ parking habits, such as pulling into the same driveway every night.

Fields said Ford isn’t interested in making a “marketing claim” of being the first to make an automated car if that means the vehicle isn’t accessible to a wide range of consumers. He does, however, believe “there will be a fully autonomous vehicle on the road sometime in the future.” But, for now, Ford is focused on bringing more semi-autonomous features to its more affordable models, like the parallel parking assist feature that the firm has included in some vehicles for years. This, said Fields, complement’s back to the company’s original mission: “Henry Ford was all about democratizing new technology.”

Ford is spending the week showing off its revamped in-car infotainment system, Sync 3. Sync, which lets drivers and passengers control music and temperature, look up directions and more, is getting better at understanding normal human speech, the company claims. Whereas drivers might have previously had to say “P.F. Chang’s Chinese Bistro” to chart a course to dinner, now a simple “P.F. Chang’s” should work, Ford says. “CES has become just as important for us” as major car shows, Fields said, noting that Ford was the first major carmaker to appear at the show. “It’s a great venue for us to showcase our innovations,” he said, adding that the show lets Ford be “part of the [technology] community.”

Sync is a big selling point for Ford. Drivers increasingly care more about in-car technology than things like horsepower or handling, according to a 2013 survey from research firm Accenture. And Fields says a majority of Ford customers reported it was a major factor in their car-buying decision.

The revamped Sync, which should find its way into some Ford models by early 2016, is launching just as Silicon Valley firms are making a play for control of the dashboard. Apple’s CarPlay and Google’s Android Auto both do much the same thing: turn a car’s display screen into an extension of the phone’s interface. On the show floor, both services appeared to make marked improvements over what most consumers may have gotten used to over the past few years.

Nearly 30 automakers—including Ford—are signed on as CarPlay and Android Auto partners. When asked about any potential tension, Ford Vice President of Global Product Development Raj Nair downplayed the idea that Ford might be worried about Silicon Valley firms taking over their cars’ dashboards—and access to valuable consumer data with them. “It’s about giving [consumers] the choice,” Nair said.

MONEY Shopping

You Haven’t Even Heard of Some of the Best-Selling Stuff of 2014

OK, so you probably guessed that some "Frozen" stuff would be among the year's best sellers. But a Jack White record, a 7-year-old self-help book, and generic bottled water?

In no particular order, here’s a compilation of items that proved to be top sellers for 2014, including more than a few head scratchers.

  • Book

    StrengthsFinder 2.0
    Brian Pope—Gallup, Inc. StrengthsFinder 2.0

    The year’s best-selling book at Amazon.com may come as quite a shock, starting with the fact that it wasn’t released in 2014—but seven years earlier. It’s StrengthsFinder 2.0, a research-driven book about assessing one’s natural talents and building them, from author Tom Rath and publisher Gallup Press. In fact, many of the 2014 top 20 best-sellers at Amazon may be surprises, including several kids’ books (two Frozen-related titles, one Whimpy Kid), some classics (To Kill a Mockingbird, Oh the Places You’ll Go!), and the College Board’s Official SAT Study Guide. There’s a fair amount of overlap with the list of 2014 best sellers from Barnes & Noble, including The Fault in Our Stars, Bill O’Reilly’s Killing Patton, and Diary of a Whimpy Kid: The Long Haul in the top 20 for both.

  • Packaged Beverage

    soda cans
    Andrew Bret Wallis—Getty Images

    Soda slumped in a big way in 2014. Among other measures, Coca-Cola felt forced to cut jobs, partner with energy drink Monster Beverage, and launch a high-end milk brand in order to cope with declining sales of classic Coke soda brands. But guess what? According to data from the Beverage Marketing Corporation, carbonated soda is still tops in the U.S. in terms of packaged beverage sales, accounting for 20.9% of all sales in 2014. Fast on soda’s heels, however, is bottled water, which captured 17.8% of the beverage market this year, up from 14.4% in 2009. By 2016, it’s expected that bottled water will surpass soda as the country’s best-selling packaged beverage.

  • Bottled Water

    Bottle of water
    Getty Images

    Per Statista, the all-things-statistics site, the best-selling water brand in the U.S. in 2014 was “Private Label,” which was purchased at least twice as often as any other brand. What, you’ve never heard of “Private Label”? There’s good reason: It’s simply the collective term used to lump in all generic store brands of bottled water—the cheap stuff that’s apparently quite popular with American consumers. (The nation’s best-selling ice cream is also “Private Label.”) Rounding out the top five are bottled water brands you’re probably more familiar with: Dasani, Nestle, Aquafina, and Poland Spring.

  • Surprise Marijuana Product

    Freshly packaged cannabis-infused peanut butter cookies are prepared inside Sweet Grass Kitchen, a well-established gourmet marijuana edibles bakery which sells its confections to retail outlets, in Denver. Colorado is now selling more recreational pot than medical pot, a turning point for the newly legal industry, tax records released Wednesday, Sept. 10, 2014 show.
    Brennan Linsley—AP Freshly packaged cannabis-infused peanut butter cookies are prepared inside Sweet Grass Kitchen, a well-established gourmet marijuana edibles bakery which sells its confections to retail outlets, in Denver. Colorado is now selling more recreational pot than medical pot, a turning point for the newly legal industry, tax records released Wednesday, Sept. 10, 2014 show.

    When recreational marijuana became legal in Colorado (and later, Washington state), it was assumed that sales would be strong for pot you could smoke. Much more surprising have been the impressive sales of pot you can eat or drink. A recent report estimates that in Colorado, edible marijuana accounts for 45% of all pot sales. One explanation for high demand for edibles is that local laws ban public smoking, while pot-infused brownies or soda can be consumed out in the open without calling attention. (Keep in mind: It’s still illegal to consume marijuana in public in any way in Colorado.)

  • Album

    Executive producer John Lasseter (C) and the cast of Disney's "Frozen" were presented with gold records commemorating the success of the "Frozen" soundtrack.
    Alberto E. Rodriguez—Getty Images for Disney Executive producer John Lasseter (C) and the cast of Disney's "Frozen" were presented with gold records commemorating the success of the "Frozen" soundtrack.

    The “Frozen” soundtrack had a huge headstart, but “1989” from Taylor Swift has been coming on strong in recent months, with sales boosted no doubt by her decision to remove her music from Spotify. Just before Christmas, the New York Times reported that “Frozen” had sold 3.46 million copies in the U.S. thus far in 2014, versus 3.34 million for Swift, and that it was too early to declare a champ: “The victor will be decided in the next few days as stockings are stuffed and iTunes gift cards are redeemed.” Meanwhile, a few months ago, Billboard posted a fascinating comparison of the top-selling albums from 2014 versus 1994: Through October, 2014 had only one album that had sold more than one million copies (“Frozen,” of course), while every album at that point in 1994’s top 10 had sold more than 1.8 million copies.

  • Song

    Pharrell Williams performs onstage during 93.3 FLZ’s Jingle Ball 2014 at Amalie Arena on December 22, 2014 in Tampa, Florida.
    Gerardo Mora—Getty Images North America Pharrell Williams performs onstage during 93.3 FLZ¬ís Jingle Ball 2014 at Amalie Arena on December 22, 2014 in Tampa, Florida.

    On both iTunes and Amazon, the 2014 crown goes to a tune that seems like it was released ages ago: “Happy” by Pharrell.

  • Vinyl Record

    Jack White performs at Merriweather Post Pavilion in Columbia, MD.
    Kyle Gustafson—The Washington Post/Getty Images Jack White performs at Merriweather Post Pavilion in Columbia, MD.

    The Wall Street Journal dubbed the vinyl record as the year’s “Biggest Music Comeback” after LP sales surged nearly 50%. Record sales were especially strong among hipsters and younger clientele at retailers like Urban Outfitters, Whole Foods, and Amazon. As for the year’s best-seller, it looks like the award goes to Jack White’s “Lazaretto,” which became the biggest vinyl record in 20 years after 60,000 copies were sold within two months of its release. “Lazaretto” has gone on to sell more than 75,000 copies in vinyl format so far. White also broke the record for the fastest released record ever in 2014, with a special limited-edition 45 of the album’s title track that was printed and made available for sale less than four hours after the song was recorded.

  • iTunes Paid Apps

    Minecraft on an Apple iPad
    Veryan Dale—Alamy Minecraft on an Apple iPad

    MineCraft and Heads Up! hold the top two spots. The $7 pocket edition of the former reportedly made more money on Christmas than any other iOs app. The latter is a 99¢ guessing game introduced in 2013 by Ellen DeGeneres, who plays it on her show.

  • Video Game

    Call of Duty 4
    Alamy

    “Call of Duty: Advanced Warfare” sold roughly 5.8 million units in the U.S. in 2014, the most of any video game. The others in the top three (“Destiny” and “Grand Theft Auto V”) were also heavy on guns and violence.

  • Video Game Console

    Sony Corp.'s PlayStation 4 (PS4) game console and controller
    Bloomberg—Bloomberg via Getty Images Sony Corp.'s PlayStation 4 (PS4) game console and controller

    Thanks to some deep discounting, Microsoft’s Xbox One reportedly outsold the Playstation 4 and all other consoles on Black Friday and throughout all of November. But in the grand scheme, Sony’s PS4 has been pretty dominant. The PS4 reached 10 million global sales by August 2014, less than one year after it hit the market, and the console crossed the 17 million mark in December, far outpacing Xbox One sales.

  • Vehicle

    2015 Ford F-150
    Ford 2015 Ford F-150

    The Ford F series has been America’s best-selling truck for 38 years, and the best-selling vehicle period for 33 years—including 2014. This is the case even as Ford sales fell off in autumn because buyers have been waiting for the new aluminum-body F-150 to hit the market. Perhaps more interestingly, Car and Driver compiled a list of the year’s worst-selling cars, which includes the Porsche 918 Spyder and the teeny-tiny Scion iQ. No doubt the former sold only 57 units at least partially because of its $800K+ starting price.

  • Luxury Auto Brand

    2014 CLA45 AMG.
    Mercedes-Benz USA—Wieck 2014 CLA45 AMG.

    Bragging rights for the year’s top-selling luxury automaker will come down to the wire. As of early December, BMW and Mercedes had each sold a smidge under 300,000 vehicles in 2014.

  • Electric Car

    2015 Nissan LEAF
    Nissan—Wieck 2015 Nissan LEAF

    Through November, Nissan had sold 27,098 Leafs in the U.S., by far the most of any plug-in in 2014. Overall, however, electric car sales have underwhelmed lately, which isn’t surprising considering that gas prices have plummeted, negating some of the savings electrified vehicles provide compared to traditional cars. For the sake of comparison, Honda sold more than 32,000 CR-V crossovers in November 2014 alone.

  • NFL Jersey

    Peyton Manning #18 of the Denver Broncos in action against the New York Jets on October 12, 2014 at MetLife Stadium in East Rutherford, New Jersey.
    Jim McIsaac—Getty Images Peyton Manning #18 of the Denver Broncos in action against the New York Jets on October 12, 2014 at MetLife Stadium in East Rutherford, New Jersey.

    According to NFLShop.com, the best-selling jersey from April 1 to October 31, 2014, was Peyton Manning of the Denver Broncos, followed by Super Bowl champion quarterback Russell Wilson of the Seahawks, and then two quarterbacks whose teams didn’t reach the playoffs this year: the Cleveland Browns’ Johnny Manziel and last-year’s jersey-selling sensation, Colin Kaepernick of the 49ers. Interestingly, while Dick’s Sporting Goods also has Manning’s jersey as its top seller, the best-selling jersey among women is Andrew Luck of the Indianapolis Colts. Perhaps they appreciate the incredibly sportsmanlike way Luck congratulates the opposition whenever a player slams him to the ground.

  • Movie

    Guardians of the Galaxy
    © Walt Disney Co.—courtesy Everett Collection Guardians of the Galaxy

    After being pulled from theaters and then released online, the controversial Seth Rogen comedy “The Interview” quickly became Sony’s top-grossing online film of 2014, snagging $15 million in digital revenue in a single weekend. As for traditional movies actually released widely in 2014, “Guardians of the Galaxy” came out on top in what was called a “confounding,” lackluster year at the box office, with overall sales down 5% compared to 2013. “Frozen,” the top-grossing animated film of all time and #10 among all movies, doesn’t qualify as the biggest movie of 2013 or 2014 because it was released in late 2013 and ticket sales were spread over both years. As for the top-selling DVD of 2014, the contest isn’t remotely close: Nearly 10 million copies of “Frozen” have been sold, roughly three times more than the #2 film, “The Hunger Games: Catching Fire.”

MONEY Autos

Americans Are Back in Love with SUVs. Is Cheap Gas the Reason?

141202_EM_LuxSUVLove
Richard Prince—GM 2015 Cadillac Escalade

November was an exceptionally strong month for auto sales—especially for trucks and SUVs of all shapes, sizes, and degrees of luxury.

With the help of Black Friday promotions and the cheapest gas prices in years, the auto industry posted a brilliant November for sales. General Motors announced that sales were up 6% compared to a year ago, making for its best November in seven years. In fact, the Detroit Free Press reported that once all of the sales totals are in, last month could very well be the best November the auto industry has seen in 13 years, thanks especially to strong performances from GM and Chrysler (up 20%).

Ford sales in November were down 2% compared to a year, but even that is being considered a victory of sorts, because the results outperformed analysts’ expectations. (Experts anticipated a sales decline largely because Ford is in the process of producing a new aluminum-bodied F-150 truck—the country’s best-selling vehicle for more than three decades—and naturally sales are slumping while drivers await the updated model.)

What’s interesting is that while Ford had a less-than-stellar month overall, a few of its vehicles experienced a terrific November in terms of sales. Two SUVs, the Explorer and the crossover Escape, did great business, up 13% and 22% compared to a year ago. And those impressive gains pale in comparison to their higher-end sibling. Ford’s Lincoln brand was up 21% overall for the month, and sales of the Lincoln Navigator—a luxury SUV with a sticker price starting over $60,000—reached 1,433 for the month, a rise of 88% compared to a year ago.

Similarly, one of the Navigator’s luxury SUV competitors, the Cadillac Escalade (MSRP from $72,970), saw sales increase a whopping 75% in November, even as Cadillac as a whole experienced a 15% decline for the month. Several other GM trucks and SUVs, including the Chevrolet Silverado, GMC Sierra, and Buick Encore, also had booming Novembers, with sales up 24%, 57%, and 72%, respectively.

Yet another SUV-centric auto brand, Fiat Chrysler’s Jeep, had a brilliant November, with sales up 67% for the new Cherokee and up 27% overall. Meanwhile, Toyota, which beat expectations with a mild 3% sales increase in November, made a point of noting how well its trucks and SUVs did for the month. “Consumer demand for light trucks continues unabated and Toyota dealers set new November sales records for light trucks and SUVs,” Toyota division group vice president Bill Fay said in a press release.

What explains the surge in SUV sales? To some extent, the category’s performance is emblematic of the auto industry having a strong month overall. But decreasing gas prices are probably playing a role as well: Apparently the dip under under $3 per gallon seemed like a cue to some consumers that it was time to consider an SUV again. The fact that new trucks and SUVs are more fuel-efficient than their older counterparts helps the cause. On the other hand, only rapidly decreasing gas prices—and short memories on the behalf of consumers who griped not long ago about dropping $100 on fill-ups—can explain the reported increase in sales of gas-guzzling Hummers on used car lots recently.

Toward the end of November in particular, dealerships were offering especially aggressive promotions on SUVs of all shapes and sizes. Ford’s rivals were very aggressive with deals on light-weight pickups, likely with the idea of wooing buyers before they have the chance to purchase the new Ford F-150, soon to be widely available. Finally, the Black Friday shop-a-thon weekend seems to have instilled in consumers a mentality for splurging on high-priced automobiles, especially when it seemed like the deals were good.

“Arguably more than other Black Fridays, this one seemed to have been positioned as a big ticket Black Friday,” LMC Automotive’s Jeff Schuster said, according to Bloomberg News. “It’s the 65-inch TVs, big appliances or cars that consumers focused on.”

 

TIME Transportation

What Happened to the Car Industry’s Most Famous Flop?

A 1958 Edsel Convertible
Underwood Archives / Getty Images A 1958 Edsel convertible made by Ford

Market researched failed in a major way

Any crossword puzzler knows there’s a five-letter word for a Ford that flopped: Edsel.

At the heart of any big flop–like when Ford ended the Edsel 55 years ago, on Nov. 19, 1959–lies high expectations. The Edsel was named after Henry Ford’s son, no small honor, and it had its own division of the company devoted to its creation. As TIME reported in 1957 when the car debuted, the company had spent 10 years and $250 million on planning one of its first brand-new cars in decades. The Edsel came in 18 models but, in order to reach its sales goals, it would have to do wildly better than any other car in 1957 was expected to do. The September day that the car first went on the market, thousands of eager buyers showed up at dealers, but before the year was over monthly sales had fallen by about a third.

When Ford announced that they were pulling the plug on the program, here’s how TIME explained what had gone wrong:

As it turned out, the Edsel was a classic case of the wrong car for the wrong market at the wrong time. It was also a prime example of the limitations of market research, with its “depth interviews” and “motivational” mumbo-jumbo. On the research, Ford had an airtight case for a new medium-priced car to compete with Chrysler’s Dodge and DeSoto, General Motors’ Pontiac, Oldsmobile and Buick. Studies showed that by 1965 half of all U.S. families would be in the $5,000-and-up bracket, would be buying more cars in the medium-priced field, which already had 60% of the market. Edsel could sell up to 400,000 cars a year.

After the decision was made in 1955, Ford ran more studies to make sure the new car had precisely the right “personality.” Research showed that Mercury buyers were generally young and hot-rod-inclined, while Pontiac, Dodge and Buick appealed to middle-aged people. Edsel was to strike a happy medium. As one researcher said, it would be “the smart car for the younger executive or professional family on its way up.” To get this image across, Ford even went to the trouble of putting out a 60-page memo on the procedural steps in the selection of an advertising agency, turned down 19 applicants before choosing Manhattan’s Foote, Cone & Belding. Total cost of research, design, tooling, expansion of production facilities: $250 million.

A Taste of Lemon. The flaw in all the research was that by 1957, when Edsel appeared, the bloom was gone from the medium-priced field, and a new boom was starting in the compact field, an area the Edsel research had overlooked completely.

Even so, the Edsel wasn’t a complete loss for Ford: the company was able to use production facilities build for Edsel for their next new line of, you guessed it, compact cards.

Read the full report here, in the TIME Vault: The $250 Million Flop

TIME Autos

Ford Recalls 65,000 Fusion Vehicles

There are no known accidents caused by the issue

Ford has recalled 65,000 Fusion cars for noncompliance with a regulation on “theft protection and rollaway prevention.

The automaker announced Tuesday said that it is not aware of any accidents or injuries caused by the issue, but said that it would voluntarily fix the more than 56,000 affected vehicles in the United States, as well as 6,000 in Canada and 2,300 in Mexico.

The 65,000 vehicles recalled Tuesday is small in comparison to General Motors’ notorious recall this year, when more than 1 million vehicles worldwide were pulled over a faulty ignition switch that caused the deaths of at least 30 people.

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