Magna International Inc. (MGA) has embarked upon a project to develop electric vehicle technologies over a span of 6 years. Both the company and the province of Ontario in Canada will invest C$432 million ($441 million) for the project, out of which, C$48.4 million (($49.41 billion) will be contributed by the latter.
The project focuses on developing electric car concepts, their parts, lightweight materials and components, and an alternative energy project. It will create about 728 jobs. Some parts of the project will be overseen by Magna’s E-Car venture.
Currently, the global automakers are concentrating on green car technologies in order to reduce greenhouse gases and meet government standards for fuel efficiency and pollution.
Recently, Toyota Motor Corp. (TM) signed a memorandum of understanding with Ford Motor Co. (F) on the equal product development collaboration in order to develop a gas-electric hybrid engine for pickup trucks and sport utility vehicles.
The development of electric hybrid engines would help both the companies meet stringent fuel economy and pollution standards in the U.S. and elsewhere in the near future. The U.S. fuel economy standards require vehicles to deliver 56.5 miles per gallon (mpg) by 2025.
Toyota also plans to manufacture an electric vehicle in Ontario for the first time outside its home country. The development of the vehicle is a part of a multimillion-dollar, public-private project announced in July.
Magna displayed an electric car last year to showcase the parts and technology it could offer. The company also co-operated with Ford to develop its Focus electric car.
The Zacks #3 Rank (Hold) company posted a decrease in profit to $272 million or $1.11 per share in the second quarter of the year from $315 million or $1.39 per share in the prior-year quarter (all excluding unusual items). With this, the company has missed the Zacks Consensus Estimate of $1.36 per share.
Revenues in the quarter rose 24% to $7.34 billion driven by increase in sales in all its operations. However, operating income decreased by $5 million to $362 million in the second quarter of 2011, mainly due to higher cost of goods sold (27%) and selling, general and administrative expenses (11.5%).
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