Locator: 45210ECON.
TAM: total addressable / available market.
From an earlier post:
Daimler Truck: forecasts "sunny condition," link here.
As a reminder, I'm very bullish on Daimler Truck as a company executing very well in a tough environment. I'm accumulating shares in Daimler but making no recommendation. My investment horizon is a rolling 30-year investment. Will the US have a robust economy over the next 30 years? Will trucking remain part of the US economy. Will the west coast -- Washington, Oregon, California -- hold to the 2030 / 2035 EV mandate?
In reply, from a reader who knows this sector much better than I do:
I agree that Daimler is a good investment, especially now that there is some progress made in suppliers furnishing parts and chips to assemble the trucks.
I see a rat in the wood pile in pricing.
Previous to Covid , prices were stable for many years with small increases each year.
Supplier interruptions caused a lot of delays in delivery as well as higher costs. The result is a much more expensive truck, as much as $100,00.00 more than a 2019 model of the same manufacturer. Supply is still a problem as deliveries are still in the 6 month to 1 year timeframe.
As Covid progressed, freight rates increased which covered the increase costs of equipment.
Rates have now been returned to pre-Covid levels but equipment costs have not.
The new proposed emissions regulations will add $25,000.00 (manufacturer’s estimates) to new power units. This will cause a jump in demand of units before the new reg’s are in effect.
Electric units are not yet priced as most are experimental or lease only deliveries. This financial imbalance has not yet gone through the transportation system’s finances. That effect should increase rates but competition has kept them low. The interest rate increases has slowed down business and over 15,000 trucking companies have closed because of this.
Most all are small operations so there has been no real loss in capacity to increase rates.
Transportation’s costs vs income is going to suffer, how much and when will soon be answered. This will have a huge effect on the new truck sales, especially after the new reg’s take place in 2027.
Keep close watch on the whole industry as stock prices will become extremely volatile. There should be a lot of dips to buy on and big gains to capitalize on. Good luck, keep watch of the changes
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The Book Club
Emily Dickinson: Bloom's BioCritiques, Harold Bloom, c. 2003.
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