Fiat Chrysler shares plummet 12 percent on weak outlook

Rebecca Cook | Reuters
Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Fiat Chrysler shares crashed by more than 12 percent Thursday morning after the Italian-American automaker forecast a weak outlook for 2019.

The automaker said it expects results in the first half of the year to be down over last year, in part, because the company will not be selling two generations of the Jeep Wrangler side-by-side, as it did in 2018. It is also planning some Wrangler production downtime to retool factories for launch of the plug-in hybrid version of the iconic off-road machine in early 2020.

The company also said continued actions to manage dealer inventories will also hit its finances in the first half of the year. It is also facing higher-than-expected capital expenditures, shelling out roughly 500 million euros in connection with U.S. diesel emissions cases. It's also paying an effective tax rate that's about 25 percent higher than it was in 2018, mostly due to changes in the U.S.

Fiat Chrysler said expects the second half of the year to pick up from sales of its recently released Jeep Gladiator mid-size pickup truck and its heavy duty Ram pickup trucks, introduced at the Detroit auto show.

The automaker said it expects total industry sales for North America to decline in 2019 to 17.2 million, down from 17.7 million in 2018, the automaker said in a presentation to investors.

Amazon just invested in self-driving car company Aurora

Leonard Ortiz | Digital First Media | Getty Images
Jeff Bezos, founder and CEO of Amazon, speaks to a group of Amazon employees that are veterans during an Amazon Veterans Day celebration, to honor the Warriors@Amazon, a group of employees who have served in the military and their spouses, in an event outside a hanger at the Long Beach Airport in Long Beach on Monday, November 12, 2018. The event included the unveiling Amazon's 40th airplane named Valor in honor of the group. (Photo by Leonard Ortiz/Digital First Media/Orange County Register via Getty Images)

Self-driving car startup Aurora announced on Thursday that it has raised more than $530 million in funding, from investors including Amazon, Sequoia and the investment arm of energy giant Shell.

“This funding and partnership will accelerate our mission of delivering the benefits of self-driving technology safely, quickly, and broadly,” Aurora said. Aurora's management has a lot of experience in the automotive industry.

The company's CEO and co-founder Chris Urmson is the former CTO of self-driving cars at Alphabet, which owns the autonomous vehicle firm Waymo. Co-founder and chief product officer Sterling Anderson led the design and launch of the Tesla Model X, according to Aurora's website. Drew Bagnell, Aurora's chief technology officer and co-founder helped found Uber's Advanced Technology Center.

“We are always looking to invest in innovative, customer-obsessed companies, and Aurora is just that,” Amazon told CNBC in a statement. “Autonomous technology has the potential to help make the jobs of our employees and partners safer and more productive, whether it's in a fulfillment center or on the road, and we're excited about the possibilities.”

The Wall Street Journal said last year that Amazon has a team dedicated to building autonomous vehicle technology. Amazon also announced a partnership with Toyota last year that will help Amazon explore ways to use self-driving cars to deliver food. Earlier this week, CNBC reported that Amazon is already hauling cargo in self-driving trucks developed by Embark.

Rather than manufacturing its own vehicles, Aurora is working with incumbents like VW and Hyundai, as well as Byton in China, to develop self-driving cars. It competes with Waymo, other venture backed autonomous vehicle start-ups like Zoox, and self-driving companies that were acquired by Ford and GM, Argo.AI and Cruise, respectively.

Neither Amazon nor Aurora revealed just how much of the new funding round came from Amazon. The e-commerce titan's investment in Aurora follows its addition of risk language in its 10K filings, that Amazon views “transportation and logistics services” as competition.

Amazon's delivery costs exceeded $27 billion in 2018. Using advanced driver-assistive technology, or fully self-driving vehicles, could help it curb delivery costs.

-CNBC's Deirdre Bosa and Lora Kolodny contributed to this report.

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Amazon Echo is a key part of company's future, says NYT columnist
12:16 PM ET Fri, 1 Feb 2019 | 04:19

Toyota debuts new Tacoma to protect its crown as No. 1 midsize pickup from encroaching US rivals

Source: Toyota
2020 Toyota Tacoma TRD Off-Road

The pickup wars are spreading.

Toyota refreshed its best-selling Tacoma mid-size pickup trucks with Apple Car Play, larger touch screens and other features drivers have come to expect in today's utility vehicles, the company said Thursday. The Japanese automaker's move comes as American automakers — not content to rule the full-size segment —release smaller trucks that threaten the one category where Toyota has managed to hold its own with the Big 3 in Detroit.

Source: Toyota
2020 Toyota Tacoma Limited

The Tacoma has led the mid-size pickup segment in sales in the U.S. for the last 14 years, and the company is anxious to hold onto that crown. Ford just brought back the Ranger mid-size pickup truck, and Chevrolet has been successful with its Colorado.

Even Jeep is getting into action. Fiat Chrysler's brand known mostly for sport utility vehicles launched the Gladiator pickup at the Los Angeles Auto Show late last year. As the historical leader in the segment, Toyota has the most to lose.

The good news is this segment is growing overall, as the broader market turns toward utility vehicles. Mid-size pickup sales are expected to grow from about 3 percent of the total market in 2018 to 4 percent by 2021, according to data from LMC Automotive, a firm that tracks the auto industry.

Source: Toyota
2020 Toyota Tacoma Limited

The number of models is also expected to grow, reversing a multi-year pullback in the segment. In 2010, there were 11 mid-size pickup trucks to choose from, according to LMC. But there were only five models from 2014 to 2018. But again, by 2021, that is expected to more than double again back to a total of 11.

Source: Toyota
2020 Toyota Tacoma TRD Off Road

Toyota's refresh is not a dramatic redesign, said IHS Markit analyst Stephanie Brinley. But it's adding some key upgrades, such as an improved infotainment systems with Apple Car Play, and a few other features that customers have come to expect in new vehicles. A larger touchscreen in the truck's console will come standard on every model. Each trim level will come with upgrades specific to that variant, such as new grille designs and new headlights and taillights.

Source: Toyota
2020 Toyota Tacoma TRD Pro

In addition to overhauling the Tacoma, Toyota is beefing up its TRD Pro off-road racing lineup, adding a TRD Pro version of its three-row Sequoia sport utility vehicle. Toyota already makes TRD Pro versions of its Tacoma and Tundra pickups and its 4Runner SUV.

Source: Toyota
2020 Toyota Tacoma TRD Pro

Off-road and sporty on-road variants of pickup trucks and SUVs have been around for a long time, but automakers seem to be beefing up their selection of packages and options. Automakers are looking to leverage the shift to trucks and SUVS as an opportunity to find new ways to package features and capabilities to net a few more customers wherever they can.

“Every type of vehicle, every capability, every price point is looking to be exploited,” Schuster said. “It is a fight for customers and a fight for market share.”

AAA confirms what Tesla, BMW, Nissan electric car owners suspected — cold weather saps EV range

Source: YouTube
A Tesla Model 3 in the snow.

Hoping to increase the appeal of their battery-electric vehicles, automakers have begun rolling out an assortment of “long-range” models, such as the Tesla Model 3, Chevrolet Bolt EV, Jaguar I-Pace and Nissan Leaf Plus.

Under ideal conditions, these products can deliver more than 200 miles per charge and, in some cases, even 300. But as many owners discovered last week as winter storms slammed much of the country, cold weather conditions do not qualify as “ideal.” A new AAA study finds that when the thermometer drops to 20 degrees Fahrenheit, range falls by an average of 41 percent on the five models it tested.

“We found that the impact of temperature on EVs is significantly more than we expected,” said Greg Brannon, AAA's director of Automotive Engineering.”

Some EV drivers — including this correspondent — recently found that range can drop by half when the mercury tumbled into negative territory. But the AAA study appears to be the first to have used standard, repeatable methodology to confirm the problem and compare the effect of winter temperatures on different models.

Chesnot | Getty Images
Visitors look at a BMW i3 electric automobile during the Paris Motor Show on October 14, 2014 in Paris, France

There were several surprises that emerged from the research, according to Brannon, starting with the fact that the impact on range was pretty much uniform among all five of the battery-electric vehicles AAA tested: the BMW i3s, the Chevrolet Bolt EV, the Nissan Leaf, the Tesla Model S and the Volkswagen e-Golf.

“It's something all automakers are going to have to deal with as they push for further EV deployment because it's something that could surprise consumers,” said Brannon.

Different factors can affect the loss of range, he and other experts have noted. Simply turning on the electric vehicles, or EVs, AAA studied in 20 degree weather revealed a 12 percent loss in range. On a vehicle like the Chevy Bolt, with an EPA rating of 238 miles per charge, that would drop range to 209 miles. But that part of the test assumed operating the vehicle with neither cabin heat or even seat-heaters turned on.

Using climate control revealed an even bigger surprise, according to Brannon, as range dipped by an average 41 percent — which would bring an EV like the Bolt down to just 140 miles of range.

The problem is that unlike a car with an internal combustion engine that can warm the cabin with waste heat, EVs have to tape into their batteries to power the climate control system.

Part of the problem, said the AAA director, is that “lithium-ion batteries like the same sort of temperatures that we do, around 70 degrees.”

Andy Cross | The Denver Post | Getty Images

Much below that and the chemistry used to store energy runs into various problems. Among other things, battery components develop increased resistance that limits how much power they can hold, as well as how fast a battery pack can be charged or discharged, explained Timothy Grewe, chief enginer for electric propulsion systems at General Motors.

Grewe has experienced sharp reductions in the range of his own Chevy Bolt, but he also said there are ways to limit the impact of cold weather. That includes storing a battery car in a garage, preferably one that's heated. And wherever it is parked, it helps to keep the EV plugged in. Onboard electronics will prevent overcharging. But many battery vehicles are programmed to use some of the energy from the grid to keep the battery pack warm, improving its efficiency.

Motorists are also advised to “pre-condition” their EVs, both Grewe and Brannon agreed. That means heating up the cabin while still connected to the grid, rather than drawing energy from the battery pack. Most new battery-electric vehicles have custom smartphone apps that allow a driver to switch on cabin heat remotely when plugged in. Commuters can even pre-program the system to automatically start at a particular time of day.

Josh Lefkowitz | Getty Images
The Chevrolet Bolt EV is displayed during the Los Angeles Auto Show at the Los Angeles Convention Center on November 20, 2016 in Los Angeles, California.

While cold weather is especially hard on a BEV's range, batteries don't like hot weather, either, said Brannon, noting that, “Much like when it's cold, in hot weather EVs suffer some decrease in range, but not as much as in the cold.”

The AAA study found range fell 4 percent from EPA numbers at 95 degrees. But, again, that number was assuming the motorist didn't mind sweating. Turn the climate control system down to 70 degrees, AAA found and range fell by 17 percent.

One thing that EVs and conventional vehicles have in common is that energy efficiency — whether measured by range or miles per gallon — can be affected by a variety of factors. These can include your driving style, as well as the terrain.

Do a lot of hill climbing and you're going to waste energy. EVs, however, are especially sensitive to any accessory drawing power, whether the car's climate control or even headlights, meaning that driving at night, whatever the weather, will hurt range.

Volvo Cars feels margin pressure from US-China tariff war

Kristian Helgesen | Bloomberg | Getty Images
Automobiles nearing completion stand on the production line at the Volvo Cars plant in Torslanda, Sweden.

Volvo Cars, owned by China's Geely, reported higher full-year revenue on Thursday, but said its profit margins had slipped and were expected to remain under pressure this year.

Carmakers have faced rising costs and pricing pressure in some markets due to a trade war between Washington and Beijing in 2018 as well as slower demand from Europe and from China, the biggest autos market.

“For 2019, we see another year of volume growth as we continue to benefit from our strong product program and increased capacity. But we have to be realistic and acknowledge that margins will remain under continued pressure,” Volvo Chief Executive Hakan Samuelsson said in a statement.

Suppliers and automakers have issued new warnings and results misses this year, with Daimler this week reporting a fall in fourth-quarter operating profit.

Volvo said its operating profit increased by 0.9 percent to 14.2 billion Swedish crowns ($1.5 billion) although its margin fell to 5.6 percent from 6.7 percent. This was despite its 2018 revenue rising by 21 percent to 252.7 billion Swedish crowns.

Volvo has been on a growth path under Geely's umbrella, with five straight years of record sales, aided by its steady push into premium automobiles, pitted it against Daimler's Mercedes-Benz and its fellow German rival BMW.

This year will be another year of growth for Volvo Cars, CEO says
38 Mins Ago | 03:28

The Swedish-based firm postponed plans for a listing last year, citing the adverse impact of the tariff war and an industry downturn, while also taking on the costs of retooling its factories in an effort to limit the negative tariff impact.

Speaking to CNBC's “Squawk Box Europe” on Thursday, Samuelsson said the slowdown in the Chinese market had not blindsighted the company.

“After many years of constant growth in China (there is) finally some reduction – I think that shouldn't really be a surprise to anybody,” he said.

“In the European market and the U.S. market we don't see any clear signs of a downturn so far. We really see that this year will be another year of growth because we have the best profit program ever and of course we have the capacity with new factories. Strategically for us it's very important to use that and then improve our market share.”

However, Samuelsson added that an IPO was not a part of this year's growth strategy for Volvo Cars.

“We said it's an option, and it's up to our owner, but we decided right now the climate in the market (is) not suitable for an IPO, so we put that on ice – it's not going to happen this year and we have no plans for that,” he told CNBC.

– CNBC's Chloe Taylor contributed to this report.

BMW

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GM is going ‘all-electric,’ but it doesn’t expect to make money off EVs until early next decade

Bill Pugliano | Getty Images
Mary Barra, Chairman and CEO of General Motors, and Mark Reuss, Executive Vice President of GM Global Product Development, reveal the Chevrolet Bolt EV to the news media at the 2016 North American International Auto Show January 11th, 2016 in Detroit, Michigan.

General Motors does not expect its electric vehicles to turn a profit for at least a few more years, CEO Mary Barra told investors on Wednesday.

The largest U.S. automaker repeated its commitment Wednesday to make its entire vehicle lineup “all-electric,” but provided investors with few details of those plans on a conference call after GM reported fourth quarter earnings that beat expectations.

However, GM is clear that its electric vehicles won't make money until “early next decade,” Barra said.

Making money off electric vehicles has long been considered a major challenge for automakers, which are pouring money into electric vehicle, EV, technology in the face of fluctuating oil prices, government initiatives to reduce carbon pollution and excitement over Tesla.

America is falling back in love with trucks and SUVs, and that's causing big changes at big car companies
10:38 AM ET Tue, 5 Feb 2019 | 04:45

The California-based electric car maker has recently pulled off two profitable quarters in a row after losing money for years. Tesla CEO Elon Musk has said in the past he expected Tesla to start turning regular profits beginning in the third quarter of 2018. So far the company has made good on that promise, but some investors are still cautious, if not skeptical the company can maintain that momentum.

Barra also demurred when asked when customers can expect to see an electric pickup truck from GM, saying simply that GM is “committed to an all-electric future” and to “stay tuned” for more news.

Meanwhile, other automakers have announced their intentions to move further into electric vehicles. For example, Ford is planning an all-electric version of its best-selling F-150 full-size pickup. Its first foray into EV's will be a new crossover inspired by the Mustang that executives say will be built for driving enthusiasts.

GM recently said it plans to make its luxury brand Cadillac the lead brand for its electrification efforts.

GM says ‘we are already seeing savings from restructuring’

Bill Pugliano | Getty Images
Mary Barra, Chairman and CEO of General Motors.

General Motors is already seeing some savings come from its recently announced plan to cut 14,000 jobs and restructure the company, executives said Wednesday.

The automaker, which started handing pink slips to more than 4,000 white-collar workers Monday, expects its plan to save about $6 billion in cash through 2020 with about half of that coming this year. About $4.5 billion of that will be cost savings and another $1.5 billion will come from less spending on capital expenses. lower capital expenditure rate.

“We were also able to accelerate the execution of our transformational cost savings and started to see early benefits of these actions in the fourth quarter,” Chief Financial Officer Dhivya Suryadevara told analysts on a call after releasing fourth-quarter earnings Wednesday.

The plan though has drawn criticism from both the United Auto Workers union and several high-profile politicians in the regions affected by the cuts. GM said it spent roughly $1.3 billion during the quarter on “transformation activities,” which were excluded from its adjusted earnings results. GM said the charges included employee separation costs and accelerated depreciation.

The company eliminated roughly 3,750 salaried positions through buyouts and by cutting contract workers, leaving roughly 4,250 salaried workers and 6,000 hourly employees targeted for layoffs in North America.

The company has offered jobs to all 2,800 hourly workers affected in the U.S. About 1,000 have already accepted new positions at other plants, and 1,200 are eligible for retirement, GM said. The other 3,000 hourly workers in Canada are getting help finding jobs and training, a spokesman said.

In Canada, about 20 local employers have expressed interest in hiring GM's laid off workers, and GM is providing out-placement services to the affected salaried employees.

GM made the decision to cut jobs at plants which the automaker said were only running at a fraction of their total capacity. The automaker chose to essentially stop producing several vehicles that have seen drops in sales, as consumers ditch sedans and passenger cars for SUVs and pickups.

The choice was difficult, but necessary, said CEO Mary Barra.

“Obviously we have work to do, but when we look at what we need to do from a market perspective, we can't run at a 70 percent utilization,” she said. “We had to improve that.”

Mary Barra’s turnaround plan for GM already paying off with fourth-quarter earnings beat

General Motors EPS, revenue beats expectations
2 Hours Ago | 01:12

CEO Mary Barra's tough turnaround plan at General Motors has already started paying off.

GM's fourth-quarter earnings, released Wednesday, beat Wall Street expectations on tighter cost controls and higher truck sales.

Here's how the company did compared with what Wall Street expected:

Adjusted earnings: $1.43 per share vs. $1.22 per share estimatedRevenue: $38.4 billion vs. $36.48 billion expected

Shares of the automaker were up 1.8 percent Wednesday morning, after rising nearly 4.8 percent in premarket trading.

“GM delivered another strong year of earnings in a highly volatile environment in 2018,” Barra said in a statement. “We will continue to make bold decisions to lead the transformation of this industry and drive significant shareholder value.”

Despite the strong beat, some analysts were skeptical.

“Yes, it was a beat relative to consensus, but we think you have to take this report with a grain of salt, as their adjusted earnings were down more than 13% year-over-year,” CFRA analyst Garrett Nelson told CNBC by email.

“We are very concerned about GM's worsening vehicle sales trends (down 13.5% in Q4) and the company's exposure to a slowing China market, which we think could challenge the company's ability to hit their full year earnings guidance introduced last month.”

Results were helped by pickup truck sales, which are a profitable and growing share of GM's product lineup. Average transaction prices reached a record of nearly $36,000, the company said. Sales of the Chevrolet Silverado and GMC Sierra full-size pickups and the midsize Chevrolet Colorado and GMC Canyon pickups, rose 3 percent over the fourth quarter of 2017.

The fourth quarter was a more volatile one for GM in China, CFO Dhivya Suryadevara said on CNBC's “Squawk Box.” The automaker felt pressure on both volume and pricing, but Suryadevara said there were signs in January the market is stabilizing.

GM's Cadillac brand was particularly successful in the region, she added.

“Cadillac was up across the board about 20 percent year over year in 2018, in a declining market environment,” she said. “So what we're focused on is what we can execute.”

Net income was $2.1 billion or $1.40 a share, compared with a loss of $5.1 billion, or $3.46 a share a year earlier.

GM is in the midst of a plan to cut 14,000 jo
bs. The automaker has said the cuts will save about $6 billion by 2020, but union leaders and politicians from states affected by the cuts have cried foul. GM began laying off more than 4,000 white-collar workers on Monday as part of its restructuring.

The cuts come as part of a plan to cut back on the production of slower-selling sedans and traditional passenger cars, as GM doubles down on the more profitable and faster-selling trucks, sport utility vehicles and crossovers. At the Chicago auto show later this week, GM plans to give the public their first look at a new heavy duty pickup truck it unveiled at its Flint, Michigan, plant Tuesday — another in a string of new heavy duty pickups from Detroit automakers looking to dominate the growing market.

Separately, GM said Tuesday it will add 1,000 workers to build new heavy-duty pickup trucks at its plant in Flint, Michigan, and will give priority to GM workers who were laid off elsewhere.

The automaker has said it is trying to find new jobs for 1,500 U.S. hourly workers at the affected plants. Flint could be a haven for many of these employees.

Sales of heavy-duty pickups in the U.S. have grown to more than 600,000 vehicles a year, up more than 20 percent since 2013, according to industry data. Prices for luxury models can easily top $70,000.

Cybersecurity firms say high-tech upgrades, self-driving tech make new cars easy targets for hackers

XtockImages | Getty Images

As auto makers roll out ever more sophisticated features to make your daily commute easier, the upgrades are also making your new car more vulnerable to cyberattacks, according to a new report.

“As more connected vehicles hit the roads, software vulnerabilities are becoming accessible to malicious hackers using cellular networks, Wi-Fi, and physical connections to exploit them,” data protection research group the Ponemon Institute said in a report released Wednesday. “Failure to address these risks might be a costly mistake, including the impact they may have on consumer confidence, personal privacy, and brand reputation.”

Some 84 percent of security professionals and auto engineers surveyed worry that automakers — which are loading new cars with infotainment systems, self-driving features, Wi-Fi, cellular connections and more — aren't keeping pace with the rapidly changing security threats, according to the study commissioned by cybersecurity firms SAE International and Synopsys. The many and varied systems leave companies and consumers vulnerable to security breaches, the report said.

“Unauthorized remote access to the vehicle network and the potential for attackers to pivot to safety-critical systems puts at risk not just drivers' personal information but their physical safety as well,” the study found.

Back in 2015, hackers took over a Jeep Cherokee in order to show how they could infiltrate the system and control steering, brakes and transmission — all from a laptop miles away. Fiat Chrysler, which makes the Jeep, issued a warning to vehicle owners to go to update their cars online, but some systems are still vulnerable.

“The industry has been slowly moving to a software-based environment, and as that's happened a lot of researchers found weaknesses and those weaknesses are now being used by various types of attackers,” said Art Dahnert, automotive security practice lead with Synopsis.

The survey was sent out to over 15,000 IT professionals, product developers and automotive engineers, and a final sample consisted of 593 responses.

A majority of those surveyed said automakers don't have enough resources to combat the threats, and 62 percent of those surveyed said their organizations do not have the cybersecurity skills needed to protect themselves.

The study is one of the latest efforts to show how smart technology can make vehicles vulnerable, especially when smart cars are on the rise. The Insurance Information Institute estimates 25 percent of cars on the road in 2030 will autonomous, or self-driving. And IHS Markit estimates that connected cars will make up 65 percent of new car sales by 2020.

Symantec, for example, introduced a car security offering in 2016. BlackBerry, a longtime cell phone maker, ventured into automotive safety through BlackBerry QNX, a software focused on safety that is now in over 120 millions cars.

“The biggest thing related to security is managing the life cycle of software and managing the life cycle of security; You constantly have to manage the security on a daily basis,” said Kaivan Karimi, senior vice president and co-head of BlackBerry Technology Solutions. “It's an ongoing process of securing the life cycle of the car.”

Automakers are also going public with their efforts to keep their cars safe. Mitsubishi went public Jan. 21 with its latest technology to protect connected cars against increasing threats.

“Automotive companies are still building up needed cyber security skills and resources,” according to the survey. “Sixty-three percent of respondents stated that they test less than half of hardware, software, and other technologies for vulnerabilities.”

Dahnert said the automotive industry should work on hiring more people who understand automotive-related security issues and train employees to watch out for potential issues.

FBI's tips for keeping your vehicle safe:

Keep your software up to dateExercise caution when making modifications to vehicle's softwareUse discretion when connecting third-party devicesBe aware of who has physical access to your car

GM unveils Chevy Silverado HD as Detroit’s Big 3 battle for big profits in big pickups

Rebecca Cook | Reuters
General Motors President Mark Reuss introduces the Chevrolet 2020 Silverado HD pickup truck at the GM Flint Assembly Plant in Flint, Michigan, February 5, 2019.

General Motors and Ford are raising the stakes in the war to win over buyers of heavy duty pickups, full-size trucks coveted by America's contractors, cowboys and commercial buyers alike.

GM unveiled Tuesday its new heavy-duty Chevy Silverado at the company's plant in Flint, Michigan where the truck will be manufactured.

“They are very purpose built,” Mark Reuss, president of General Motors told CNBC. “Things like snowplows, going to work at a construction site, using the power out of the bed. These are tools, but they are also refined tools.”

The new Silverado, complete with a ten-speed transmission rolled out just hours after Ford announced new capabilities and technology for its F-Series Super Dutypickup truck.

Phil LeBeau | CNBC
Chevy Silverado HD

“Our new Super Duty has more power, more payload and towing capability and better technology than ever to help these customers build a better world,” Kumar Galhotra, Ford's president of North America, said in a new release announcing the new truck.

Not to be outdone, Fiat Chrysler has a new Ram Heavy Duty 2400/3500 pickup heading into showrooms this spring. It comes complete with a new Cummins engine and the capability to tow 35,100 pounds, roughly the weight of five African elephants according to Fiat Chrysler.

There's a reason the Detroit Big 3 automakers are in a arms race when it comes to big pickups. These are among the most profitable models the automakers sell.

“Pickup trucks, the full-size and then the heavy duty, combined account for well over 100 percent of global auto profit,” said Adam Jonas, auto analyst with Morgan Stanley. “We like to joke sometimes the Ford F-150 is called the F-150 because it accounts for 150 percent of Ford's global profit.”

Jonas estimates some of the newest full-size pickups each bring in $10,000 to $15,000 in profits for automakers, depending on the model. He calls the profit margins “Ferrari like.”

All of which explains why the Big 3 are pouring billions into rolling out newer, more capable and higher-priced heavy duty pickups. For example GM is adding a thousand jobs to its plant in Flint to help with production of the new Silverado. Many of those jobs will be filled by GM employees working at some of the six plants the company is idling in a North America.

Last year, roughly one out of every four full-size pickups sold in the U.S. was a heavy duty model according to IHS Market, the Ford's heavy duty F-Series being the most popular.

There is one other reason why GM, Ford and Ram believe their new heavy duty pickups will rack up strong sales this year. The economy remains strong, so businesses and contractors looking to invest in new work trucks are primed to upgrade their heavy duty trucks.

“Construction starts, anything with building, anything with servicing. All those areas are very healthy and that helps out truck business and in particular, the heavy duty business,” said Reuss.

Phil LeBeau | CNBC
Chevy Silverado HD

CNBC producer Meghan Reeder contribute to this report.

Questions? Comments? BehindTheWheel@cnbc.com.