Automakers hit 'significant storm,' as buyers reject lofty prices at time of huge capital outlays

abcnews.go.com:

Investors are punishing automakers’ stocks this week after second-quarter earnings reports exposed industrywide issues of slowing sales and high prices

DETROIT — Investors are punishing automakers' stocks this week after second-quarter earnings reports exposed industrywide issues of slowing sales and high prices, just as the companies are having to spend huge sums to make new electric and gas vehicles.

Each auto company has unique problems, but common to many are growing vehicle stockpiles on dealer lots, requiring increased discounts to sell them to buyers with stressed-out household budgets.

Ford Motor Co., which reported a drop in second-quarter earnings due electric-vehicle losses and persistently high warranty costs, led the declines. Its shares have fallen 20% this week. But others such as General Motors, Tesla, Stellantis and Nissan, all saw their shares drop about 8% or even more.

Carlos Tavares, CEO of Jeep and Ram maker Stellantis, said a significant auto-industry storm he's been warning about for several years has arrived. “We are in it,” he told reporters after releasing disappointing earnings Thursday. “For me, it's a no brainer that this industry is going to be in turmoil.”

Shortly after the coronavirus pandemic spread worldwide in 2020, automakers had to slow their factories due to a global shortage of computer chips. At the time, high-income buyers who couldn't spend money on travel or restaurants started paying above sticker prices for a limited supply of pricey loaded-out vehicles. Automakers used their limited production to build only expensive stuff, and prices soared nearly 27% from pre-pandemic levels.

The trend continued into late last year, with companies and dealerships making big profits with