AD #3199 – Cadillac Slashes U.S. Dealers; Advantages of Lithium-Sulfur Batteries; Honda Slams Union EV Tax Credit
November 8th, 2021 at 11:55am
Listen to “AD #3199 – Cadillac Slashes U.S. Dealers; Advantages of Lithium-Sulfur Batteries; Honda Slams Union EV Tax Credit” on Spreaker.
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Runtime: 10:06
0:08 Honda Wants Employees to Oppose Union EV Tax Credit
1:24 Cadillac Slashes Amount of Dealers
2:05 Elon Musk Polls Twitter Followers About Selling Tesla Stock
2:47 Tesla Sells More Than 54,000 China-Made Models Last Month
4:02 Renault Repurposes Plant to Remanufacture Used Cars & Batteries
5:33 UK Looks to Revive Rare Earth Magnet Production
6:11 VW Launches New ICE Models in India & South America
7:23 Advantages of Lithium-Sulfur Batteries
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HONDA WANTS EMPLOYEES TO OPPOSE UNION EV TAX CREDIT
It’s very rare to see foreign automakers, especially Japanese ones, get involved in U.S. politics. But Honda is encouraging its American employees to contact their Representatives and Senators. It wants them to oppose legislation that would give consumers an extra $4,500 in incentives to buy electric cars made by UAW labor. Honda, of course, does not have any UAW employees. In a letter it sent to its employees Honda asks, “Don’t Honda’s American autoworkers deserve the same treatment as every other U.S. autoworker?” And to make sure they take action, Honda is handing out a phone number for them to call their reps in DC.
Here’s our Autoline Insight. There’s a bit of irony here. Remember, the first EVs that Honda and Acura will sell in the American market will actually be made by UAW employees. That’s because those vehicles will be based on GM’s Ultium architecture and will be made at two of GM’s assembly plants. But Honda is looking at the long term. It says 100% of its vehicles will be electrified by 2040 and that it will build BEVs at its own plants in the U.S.
CADILLAC SLASHES AMOUNT OF DEALERS
When Cadillac told its dealers it’s going all electric by the end of the decade, it said it would buy out anyone that didn’t want to make the transition. Dealers had to make a $200,000 to $500,000 investment for EV equipment and training, and Cadillac expected about 20% of them to drop out. But the real number is much higher than that. In an interview with Reuters, Cadillac’s global chief says it expects to have 40% fewer dealers in the U.S. than it had in 2018. By the end of the year, the brand expects to have 560 dealers compared to 920 three years ago.
ELON MUSK POLLS TWITTER FOLLOWERS ABOUT SELLING TESLA STOCK
Elon Musk is once again stirring things up on Twitter. Over the weekend, he polled his followers on whether or not he should sell 10% of his stock in Tesla. More than 3.5 million people voted and 58% said “Yes.” Musk said he needs to sell the stock in order to raise cash to pay taxes. He has to exercise a number of stock options in the next three months, which will create a big tax bill. 10% of his shares is worth about $21 billion. The tweet caused Tesla’s stock to drop more than 5% in pre-market trading this morning but analysts don’t expect the dip to last long.
TESLA SELLS MORE THAN 54,000 CHINA-MADE MODELS LAST MONTH
One reason why the stock will probably bounce back is that the China Passenger Car Association says Tesla sold more than 54,000 China-made vehicles in October, including more than 40,000 for export. That’s a slight dip from September, when it sold more than 56,000. But that’s still a lot of EVs.
RENAULT REPURPOSES TRANSMISSION PLANT
We know what a factory is, but what the heck is a refactory? That’s a new word that Renault dreamed up. It’s converting a factory in Spain to remanufacture used cars and batteries. The plant, which is located in Seville, will do work in four areas. The first is called Re-Start, which is for training and R&D. The next is called Re-Energy, which repairs batteries or develops 2nd life applications for them. The third is Re-Cycle, which recycles batteries and builds electronically controlled gearboxes. And the fourth is Re-Trofit, which refurbishes and reconditions used vehicles. That’s very interesting, I don’t know of another automaker that fixes up used vehicles at the factory and sells them back to customers. Renault hopes to have the Seville Refactory up and running between 2022 and 2024 and says by 2025 it will repair more than 10,000 used vehicles and refurbish 1,000 batteries per year.
Here’s our Autoline Insight. It looks like Renault is trying to save jobs at that plant, which currently makes transmissions for ICE vehicles. EVs don’t need those transmissions, and Renault seems to be searching for a way to keep that plant going. Closing factories in Europe is politically very difficult and very costly. So if it can repurpose that plant, Renault is going to avoid a major headache.
UK LOOKS TO REVIVE RARE EARTH MAGNET PRODUCTION
The largest mine for rare earth minerals is in California but 100% of its production goes to China to be processed. And that’s just one example. China dominates the market for rare earths, which are used in electric motors for EVs. That’s why the U.K. is looking into reviving domestic production of rare earth permanent magnets for electric motors. It says a plant to make 1 million EVs magnets a year could be built by 2024. So far this is just a study, but it would fall in line with the U.K.’s plans to achieve carbon neutrality and build a global supply chain for EVs.
VW LAUNCHES NEW ICE MODELS IN INDIA & SOUTH AMERICA
Sales of EVs are running strong in China, Europe and the U.S. But developing countries are not there yet. That’s why the Volkswagen Group is coming out with new ICE models built on the MQB platform for India and South America. The Skoda brand is launching new vehicles like the KUSHAQ and SLAVIA in India. And the Volkswagen Polo Track will launch in 2023 in South America. VW is investing roughly a billion euros into South America, and will also invest in biofuels as a way to bridge the gap to EVs.
ADVANTAGES OF LITHIUM-SULFUR BATTERIES
What if an electric car could travel over 700 miles without charging? It would be a game changer, right? And what if it did that with a relatively small battery? It sounds far fetched, but that’s what a new battery company called Lyten is working on. On Autoline After Hours last week, Dan Cook, the CEO of Lyten, described the advantages of a lithium-sulfur battery that his company is developing. Take a look.
Dan Cook: “Sulfur, if you can use it in energy storage, actually has the ability to house a lot more lithium atoms around it, as I’m sure you’re well aware. Up to 5 times more. And so our construct, our architecture, will take us to a targeted 3x over a conventional lithium-ion specific energy density, if you will. That’s not the same multiple in the volumetric end, but certainly in the gravimetric end, up to 3x. So this is really where we’re headed. And everything has to do with how this graphene works with the sulfur.”
Dave Tuttle: “And so, with today’s 250 watt hours per kilogram, you’re three times that potentially?”
Dan Cook: “That’s right.”
You can watch that entire show on our website or YouTube channel. And now let’s talk about another potential breakthrough. What if someone could make hydrogen on demand, anywhere they wanted? What if that hydrogen was cheap and clean? And what if it could be used in any internal combustion engine? We’re going to be talking about that this Thursday on Autoline After Hours. Our guests will be Ron Harbour and Dean Weston from a startup called Rite Angle, which developed a breakthrough process to make hydrogen from water cheaply and safely. Some of you may remember Ron Harbour from the Harbour Report, the industry benchmark for manufacturing productivity. He says, and I quote, “I’m staking my life’s work and reputation on the game-changing benefits it can have to industry, the environment and society.” That’s quite a statement, and if you’d like to learn more, be sure to tune in this Thursday afternoon.
And that brings us to the end of today’s report, thanks for watching.
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Comments (32)
November 8th, 2021 at 12:06 pm
The Cadillac dealer I’m most familiar with is Cadillac/Buick/GMC. If they want to drop Cadillac, would they be able to keep Buick and GMC?
November 8th, 2021 at 12:17 pm
Some of the most popular cars GM sells in China are Buicks& are made there, I thought the Caddy LYRIQ was going to be sold in China, made there?
November 8th, 2021 at 12:30 pm
Question for John McElroy, with Caddllac Dealers shrinking GMs marketshare shrinks too , doesn’t it? Like the Vehicle Pie gets smaller?, How much of the pie gets bigger with the Hummer brand resurrection, it being a niche or halo vehicle, Caddy is a brand that Buick Chev and GMC won’t service? A lot of questions here with Cadillac franchisees opting out, Maybe GM didn’t think this Ultimatium deep enough? yes , pun intended on that Ultium come Ultimatum.
November 8th, 2021 at 12:41 pm
1. They are probably encouraged to keep those lines, unless there is another store within 20 – 25 miles. Eventually though, if Barra stays on track, even Buick and GMC will all be BEVs. Many years from now of course, but having those two lines won’t save that dealership after 2030.
November 8th, 2021 at 12:53 pm
For Cadillac, if the goal is to shrink the brand to the point that it will appeal only to the very wealthy in large metropolitan areas, then this strategy is a winner. I know a now-former Cadillac dealer who was offered $400K to quit the line (he’s keeping Buick & GMC), told me that it would take decades to recoup the cost to retool his dealership to accommodate the all-electric line.
Reminds me of an old cartoon from several years ago — it depicted a CEO standing in front of his board of directors stating, “We’ve just achieved the ultimate cost reduction. . .we’ve gone out of business.”
November 8th, 2021 at 1:03 pm
Regarding Honda’s push for inclusion of its future BEVs that it will be assembling at its local plants and them receiving the federal grants, IMHO, it makes no since. Whose to say that, by the time they are literally building their own, the grants will still be available? On top of that, hasn’t there always been local initiatives on the part of the leadership of many transplant automakers and state governments to keep those plants from unionizing? So when the union’s candidate gets in office, does something to support those who supported them, they call foul! The Big Three and their unions have often complained about what they feel is an unfair advantage that many of they transplants receive when they set up shop in the US. So now when it appears that they may get a leg up on them from the federal government, they have something to say. Don’t get me wrong, I think Honda makes some of the greats cars on the road today. This has motivated the local manufacturers to improve Their products to compete and the customer has been all the better for it! Yet, when you look at the automotive trade deficit that this country has with other countries, to hear that a transplant automaker, from one of those countries, feels that the federal government is providing an unfair advantage to their local businesses is sad.
November 8th, 2021 at 1:05 pm
“Foreign” automobile manufacturers were banned in Japan during the 1930s and still are! All domestic automobile production in Japan uses unionized labor. Honda, along with ALL OTHER Japanese and European makers (except for Stellantis/nee Chrysler) are not unionized in the United States thus leaving GM and Ford twisting in the wind. I’m not a friend of the UAW, however, I can’t help but snicker at Honda’s whining about fairness.
November 8th, 2021 at 1:15 pm
On Cadillac:
Dealerships with other GM lines will keep them, just lose Cadillac.
Cadillac plans for China are unaffected. This is a US-only initiative.
I don’t know how the pitch was made to the Cadillac dealers, but they will still need to make a big investment in order to sell Buicks, GMC’s, Hummers (GMC), and Chevrolets. The Buick-GMC dealers are already getting equipment installed to support the Hummer launch and the electric Silverado/Sierra are only about a year out. Some of the Cadillac dealers may have acted a bit hastily since the investment would need to be made sooner or later to support their overall GM business.
A friend told me that there is no coordination happening between Cadillac and the other divisions. The dealer councils should have pushed back on that. Dealers should not have to invest in a complete “electrification package” for their dealership from each brand if they sell Buick, GMC and Cadillac.
I think GM and Cadillac saw this as an opportunity to cull their rural Cadillac franchises and were very surprised at the number that decided to take their money and give up the franchise. Ultimately, I think this will not be beneficial for Cadillac. They just gave a lot of consumers a good reason to shop other brands, like Lincoln, that will continue to have dealers in mid-size markets that Cadillac has walked away from.
November 8th, 2021 at 1:22 pm
Since Toyota, Honda and Nissan all sell many more vehicles in the US than they do in their home country, I am not surprised that they are very concerned about any moves that may threaten some of their sales here. However, that doesn’t bother me one bit and it is just a small move of protectionism against a country that has specialized in it for more than 60 years. A taste of their own trade tactics is long overdue.
November 8th, 2021 at 1:31 pm
It seems Cadillac’s Global VP Rory Harvey has some extensive experience with GM (capitals) in Europe. So it stands to reason he may understand the potential for upscale EVs like the Lyriq over here, where Tesla’s Model 3 bested all medium-size sedans in Q3 (when 11.5% of all sales were electric).
More and more people in Europe are looking around for suitable EVs – the window will not stay open forever. Come on Cadillac, show some ambition.
November 8th, 2021 at 1:37 pm
@10, your point is purely theoretical: which GM or Ford product would anyone want in Japan? All are too large and fuel-inefficient. And one more detail: Japan has Right Hand Traffic.
November 8th, 2021 at 1:40 pm
According to the linked article, Cadillac will “still have more dealers than other established luxury brands.” I assume that means M-B, BMW, Lexus, and maybe others. Still, they need more volume. Maybe the Lyric will help, if the bad press from Bolt doesn’t hurt it too much.
November 8th, 2021 at 1:41 pm
11 Wim – You’ve lost me there. I’m thinking of Europe.
November 8th, 2021 at 1:50 pm
11 Mustang, and soon, Corvette, and maybe Wrangler are the only RHD vehicles made by North American companies. The RHD market for those would be mostly Australia, with a few in the UK.
November 8th, 2021 at 1:54 pm
10 I hope they try to sell Lyric in Europe. It would be a new, and intersting new entry, and EVs sell well in Europe.
November 8th, 2021 at 2:54 pm
@9 – Japan has not had any imported auto trade barriers for about 40 years, if not longer. Big Three vehicles were handicapped by non-trade issues… such as their vehicles being too large for Japan’s narrow streets and parking places, lack of a dealer network (and no open land to physically build them), intense consumer loyalty, and poor business cases (at the time) to convert iconic vehicles to RHD for a low volume of enthusiasts. Yes, there was a time when Japan has a maximum vehicle width of 1700mm… decades ago. Those American vehicle that were imported into Japan were not well-received by the dealers/customers for real and perceived quality issues (e.g., underbody surface rust).
November 8th, 2021 at 3:35 pm
@13, my bad, I meant to write 10
November 8th, 2021 at 5:14 pm
I don’t understand Cadillac. AS a senior who would consider a Cadillac (and had 2), I have no interest in traveling over an hour for service. In my area, 3 Cadillac dealers have closed over the years that were within a reasonable travel distance. Part of buying a car is dealership service ans repairs – and God knows Cadillac has their share of needed repairs!
November 8th, 2021 at 5:27 pm
Fun fact: According to Automotive News, all those departing Caddy dealers added up to less than 10% of the brand’s annual sales volume. So no great loss.
November 8th, 2021 at 5:38 pm
Honda calling out their employees
#6 – I think they’re freaking out that this added incentive will really turn the market to electric. Nothing to do with long term plans, I think they’re trying to hold the market back a little longer.
November 8th, 2021 at 6:33 pm
18 It seems that all dealers are moving away from where people live. Where I am in Florida, the Toyota, Kia, and Chrysler/Dodge/Jeep dealers have all moved from populated areas to near an interstate, where no one lives.
November 8th, 2021 at 6:36 pm
19 I’m not surprised. It’s the low volume dealers that are quiting.
November 8th, 2021 at 8:19 pm
Ford thought it could sell Tauruses in Japan, so when we designed the new 1996 model we designed and tooled up a RHD version. The car was not successful in Japan, and the RHD version was dropped after a few years.
November 8th, 2021 at 9:46 pm
23 Taurus would have been too big for a generic sedan to sell in Japan. Something different, like Mustang, and planned RHD Corvette should do better there, even though “too big.”
November 9th, 2021 at 4:53 am
I replaced my cell phone battery and lithium-sulfur was not an option. More than EVs need better batteries.
November 9th, 2021 at 7:37 am
25 Are lithium-sulphur batteries even made commercially yet? If they were, they probably wouldn’t be a drop-in replacement, because they are lower voltage/cell than lipo.
November 9th, 2021 at 8:25 am
Looked up the VW Polo Track, which will be sold in South America and possibly elsewhere in the world. Slightly smaller than Golf, increased ride height “Adventure Vehicle”. No details, but I’m guessing likely TDI, manual transmission, extremely efficient, satisfying to drive. Built on existing, tried and true architecture with a slight update. Interesting. Certainly not anything Americans would want.
November 9th, 2021 at 8:41 am
The entire car industry is in chaos as they try to reinvent themselves. There continues to be so many hurdles for them to overcome, besides getting vehicles on dealer lots, yet new technology grows so fast that no one can keep up or knows what to do. In the end, all this mess only confuses buyers and makes them more reluctant to take the leap into EV’s…. which most can’t afford anyway.
November 9th, 2021 at 8:59 am
27 I’d like a TDI manual Polo, but without the lift kit, as a “city car.”
November 9th, 2021 at 9:38 am
#3. Rey, Cadillac may lose some sales with the dealers that are leaving. But it says that the remaining dealers account for 95% of its sales. If this is true that means it had a lot of dealers that sold very few cars. They probably survived by being multi-franchise dealerships. The remaining Cadillac dealers will probably become more profitable.
November 9th, 2021 at 10:15 am
I guess my opinion is that our government should NOT offer any incentives at all. Union or Non-union. We need to stop spending money!! We should not try to support any industry with the hard earned money of the taxpayer.
November 9th, 2021 at 10:29 am
#30 John McElroy, The old GM had too many brands, with Olds and Pontiac and Hummer and Saturn chasing dwindling customers and spreading themselves too thin in a changing world, like UBER and Lyft, DiDi rideshare, same with VAG VW, with its SEAT, AUdi,Bentley,etc.
The World is changing, with now work from home and the internet,and UBER,rideshare and Carshare becoming popular, I think there will be less cars on the road, and too many car manufacturers chasing dwindling car ownership.
Geely who lik liken to GM with its different divisions has their LynkCo brand , a car sharing model where the Company owns the car, and is shared in the Community, the driver pays a fixed rate Insurance ,maintenance all in, in the Netherlands,China as well i guess.