Finance in automotive
automotive finance: capital intensity and platform amortization, thin per-unit margins, captive finance and residual value, and the EV cost curve.
Automotive finance operates on thin margins, heavy capital intensity, and long product cycles that tie up cash for years before returns materialize. This block equips you to read the financial reality behind carmakers, suppliers, and captive finance arms. You will learn how volume, mix, and platform economics drive profitability, how OEMs fund development and tooling, and how captive lending and residual values shape earnings. You will work through the sector-specific ratios, benchmarks, and cost structures that separate healthy players from distressed ones across the US and Europe. Finally, you will apply the regulatory frameworks, cyclical risks, and due-diligence checks that matter when assessing automotive companies and transactions.
What you'll master
- Read and interpret an OEM or supplier income statement and balance sheet using sector-specific margins, capital intensity, and cash conversion drivers
- Calculate and benchmark key automotive metrics such as EBIT margin per vehicle, R&D and capex intensity, breakeven volume, and captive finance penetration
- Assess residual value, warranty, and inventory risks and their impact on earnings quality and liquidity
- Perform targeted financial due diligence on an automotive target, including captive finance exposure, supplier concentration, and cyclical sensitivity
Key terms
Modules
Covers the core economics of building and financing cars, from platform amortization to EV break-even.
Covers the essential financial statements, ratios and benchmarks used to evaluate automakers.
Covers the regulatory, cyclical and credit risks plus the checks needed to assess an automaker.
Latest articles
Recent articles from the blog that apply to Automotive.
- $100/kWh and falling: the battery cost math every automotive CFO must ownThe $100 per kilowatt-hour threshold has long been treated as the point at which electric vehicles become cost-competitive with internal combustion equivalents on a per-unit basis. But in a year when consumer confidence has hit a 12-year low and EV demand is softening across major markets, CFOs need to understand exactly what that number means for their break-even models, and where it breaks down.
- Captive finance arms: how automakers use off-balance-sheet structures and residual value exposure to fund sales volumeAutomakers have spent decades building financial subsidiaries that let them sell cars without the debt appearing to threaten the parent's investment-grade rating. With core CPI again exceeding forecasts in September 2026 and rate-cut expectations fading, the mechanics of that structure, and its hidden risks, deserve a CFO's full attention.
- Belron's IPO field guide: the people, precedents, and pressure points that define mega-listing readinessBelron's reported exploration of a mega-IPO puts one of Europe's most quietly formidable private businesses under the public-market microscope. This field guide maps the players and precedents that every CFO preparing for a major listing should know cold.
- The night Chrysler's CFO discovered the credit market had closedIn late 2008, Chrysler's treasury team woke up to a commercial paper market that had effectively stopped functioning overnight. What happened next became one of the most instructive case studies in corporate liquidity management that business schools still use today.