This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
GRAPHITE SHORTAGE ABOUT TO HIT AUTO INDUSTRY
Uh-oh, the auto industry is about to get hit with another shortage. This time it’s the graphite needed to make parts for EV batteries. Graphite producers cannot keep up with demand in China, and China accounts for 70% of graphite production globally. Reuters reports there’s going to be a shortage of 20,000 tons of graphite next year, which is enough to make 250,000 BEVs. And that’s a shortage in China alone, which means it’s going to be worse in the rest of the world. Graphite is used in the anode or negative pole in a battery, and demand for the raw material is expected to grow 27% per year over the next decade–but that’s only if producers can make enough of it.
MEXICO THREATENS LEGAL ACTION OVER U.S. EV CREDIT PROPOSAL
The USMCA, the free trade agreement between Canada, Mexico and the United States is confronting its first crisis. Yesterday, we reported Canada isn’t happy with the Biden Administration’s proposal to give an extra $4,500 in incentives to EVs made in the U.S. by union labor. Canada wants to align EV incentives with the U.S. to settle the dispute. And now Mexico says it’s going to take legal action and is threatening an appeal that will be decided by an international panel.
GERMANY PLANS STRICTER EV INCENTIVE REQUIREMENTS
And speaking of EV incentives, Germany’s new government said it will keep the country’s current policy in place for another year but after that it will make it tougher for vehicles to qualify for incentives. Car buyers in Germany currently get 9,000 euros or about $10,200 for a battery electric vehicle while plug-in hybrids qualify for 6,750 euros or $7,600 in incentives. Germany didn’t reveal specifics for the new policy but it will be based, in part, on a minimum distance an EV must travel under electric power. So, it sounds like plug-in hybrids and BEVs with small ranges won’t qualify in the future. Germany is aiming to have at least 15 million BEVs on its roads by 2030.
TWO CHINESE AUTOMAKERS NOW OWN NEARLY 20% OF DAIMLER
Daimler got headlines all over the world after it split into two companies, one for cars and one for trucks. But while we were all focused on that, Daimler quietly dropped a bombshell that most of us missed. It disclosed that BAIC, or the Beijing Automotive Industry Corporation, now owns 9.98% of Daimler. Add that to the 9.7% share that Geely owns, and two Chinese automakers now own nearly 20% of Daimler. Bloomberg reports that BAIC actually bought those shares back in 2019, but Daimler didn’t disclose it then because legally it didn’t have to, since BAIC was just under the 10% threshold. Daimler and BAIC are joint venture partners in China, and BAIC promised it will not raise its stake in Daimler above what it already has. Even so, Germany is uncomfortable that Chinese companies are taking ownership stakes in so many of its industrial icons.
HONGQI INTRODUCES NEW LUXURY MINIVAN IN CHINA
Is this one of the best-looking minivans you’ve ever seen, or what? Buick’s GL8 and Toyota’s Alphard are about to get some real competition in China’s premium van segment. The grille, the giant wheels and the two-tone paint job almost give it a Maybach kind of look. Gasgoo reports FAW’s Hongqi brand will launch this MPV sometime next year. Production will be quite limited, only 20,000 units a year, which means it definitely will be positioned as a luxury vehicle.
HONDA HELPS OUT HIGHWAY DEPARTMENTS
Honda wants to help out highway departments. It came up with a way for the sensors in its vehicles to judge what kind of condition lane markings are in. It ranks them from “ideal” to “needs repair.” That, and GPS data, could be sent to road crews so they know where to paint new lines. That also helps driver assistance systems, like SuperCruise and BlueCruise, which need well defined lane markings to operate, otherwise they’ll shut off.
VOLTA TRUCKS NOW DEVELOPING SMALLER EV COMMERCIAL TRUCKS
EV startup Volta Trucks, which is developing purpose built electric commercial trucks, announced it started the engineering phase of development of its 7.5 and 12-tonne variants. Last month, the company showed off a production ready design of its 16-tonne truck that was unveiled last year. Volta says the smaller trucks will have a similar design to the 16-tonne with its low, central seating position and wide visibility for drivers. Customer trials for the new models kick off in 2023 with series production scheduled to start a year later.
CONTINENTAL & ZF INVEST IN AV STARTUP
Did you ever hear of a software company called Apex before? Neither did we. But Continental and ZF sure heard of it. Yesterday they both bought small chunks of Apex. ZF bought 5% and while Continental did not disclose its holding, we’re guessing it’s about the same. Apex makes an open-source software platform for autonomous vehicles, called Apex.OS. As the complexity of autonomous vehicles rockets upward, Continental and ZF say Apex.OS will allow them to add functions and updates much more easily. This is a trend in the industry we need to keep an eye on. Cars are increasingly becoming defined and operated by software, not mechanical bits or electrical components. And suppliers are racing to enhance their software capabilities.
BYD DEVELOPS 1200-VOLT SYSTEM FOR EVs
In an effort to slash charging time, reduce weight and increase range, automakers are turning to higher voltage electrical systems. Most EVs on the road have 400-volt systems, but some newer EVs, like the Porsche Taycan and Hyundai IONIQ 5, feature 800-volt systems. But BYD Electronics announced it’s coming out with a new 1200-volt semiconductor chip that can be used to control power modules, electric motor function, power supply and even solar energy inverters. BYD has already started mass production and says it will be supplying automakers starting this month.
We’ve been teasing this revolutionary engine all week. Let’s drop some stats on you that explain why we’re so intrigued by it. 160 horsepower. 170 pound feet of torque. OK, maybe that doesn’t get you excited. But what if we told you the engine only weighs 35 pounds? And what if we told you it idles at 1,000 rpm but redlines at 25,000? Better still you can stack these modules together to get some pretty impressive output. How does 1,000 horsepower from a 220-pound engine sound to you? Chris Theodore, one of the best product people in the business, was so impressed he joined the company. The company, by the way, is called Astron Aerospace. The founder, president, CEO and chairman is a guy named Matthew Riley and he’s going to be on Autoline After Hours tomorrow. So is Chris Theodore. So we invite you to join us and learn about what could be a game changer of an engine.
But that’s a wrap for today. Thanks for joining us and we’ll be right back here again tomorrow.
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Comments (16)
December 15th, 2021 at 12:15 pm
When I first saw the new mini-van (for China), I thought it was a Lincoln. I guess the Chinese are continuing their style-stealing ways. By the way, I like the Buick’d design the best of the three shown.
December 15th, 2021 at 12:29 pm
1 I like the Buick best too. As usual, we Americans get short changed. China gets the best looking minivans and the more basic Tesla Models 3. For years, Europeans have had much better vehicle choice, like rear drive wagons of various sizes, some with manual transmissions. We have our 200 different CUVs, though.
December 15th, 2021 at 12:36 pm
Many years ago when the EU was formed I said that what makes the EU open will allow outsiders they don’t want to buy in to or purchase companies like it or not and now they see the problem and can’t stop it as they did in the past
December 15th, 2021 at 1:24 pm
I still don’t get the heart burn other countries have, about the incentives that the US is using to encourage BEV adoption for vehicles made by the UAW, IN THEIR OWN COUNTRY?! Well,…I get it and I comes down to the lose of money in their countries. The trade agreement allows companies to build their products in the neighboring countries, at lower costs and bring them to the US and sell them in the States. The trade agreement allows them to move products back and forth across borders without tariffs. Giving US citizens incentives for buying products built here, discourages automakers from building them in their countries, but I don’t see how this impacts the agreement that was made. Because it only applies to those who qualify in the US! To me, it would be different if the tax incentives could be employed on vehicles built in the US, but we’re sold in Canada or Mexico. That would/could mean that that country would loose out on sells tax that that country would normally see (I know it’s not this simple, but say a BEV sells in their country for $50K, with a 6% sales tax. The US then gives their citizen $10K for buying a vehicle built in the US. That I can see them taking issue with). These countries can do the same thing for
EVs built in their country like the US is doing in theirs! The second point is, what vehicles built in the US, does this currently apply to? The Chevy Bolt and EUV? Next year’s F-150 Lightning (the next gen Lightning will be built at Ford’s new plants in Tennessee and Kentucky and there is no word on whether they will be union shops)? The up and coming Cadillac, Hummer and future Silverado EV? The Mach-E is built in Mexico, so it doesn’t get the incentives. So, it would be very few products that these incentives could even be applied to right now and many of the exciting vehicles that please may want to use them for, may come out under a new admin, that may get read of them all together! So all this posturing is really for nothing and just a show for the public, IMHO.
December 15th, 2021 at 1:57 pm
The Chinese control the supply chains. Now they will use this to steamroll all the OEMs around the planet.
The get the best models because they are now the largest auto market in the world with a middle class 4X the size of the US.
Their plan is to buy the OEMs like Mercedes or put them out of business.
December 15th, 2021 at 1:59 pm
Those same OEMs have thought them everything they know, including the most valuable asset of all, their quality control systems.
December 15th, 2021 at 2:05 pm
If the US can’t play by the rules, they should stop signing agreements which they don’t live by. The world will engage in trade wars and stop buying American goods which is the trend for decades now.
The US has the most to lose as the US falls into irrelevancy…
December 15th, 2021 at 2:07 pm
#4 I think what is being unsaid is Canada and Mexico are worried the Ford GM and Stellantis will pull production of EVs from there an build them in US in order to tempt people into buying a EV if they are being bribed to do so.
December 15th, 2021 at 2:26 pm
As John Mc. said a few days ago, it is extremely unlikely that the extra incentive for UAW vehicles will happen. Even if it did, it’s unlikely that Ford would move Mach-E production to a UAW plant, especially since there is no stability in US policies between administrations.
December 15th, 2021 at 2:37 pm
Better lane lines will help Tesla too. Both Autopilot and Full Self Driving.
December 15th, 2021 at 4:18 pm
10) I found that odd that TESLA was also not mentioned when discussing better lines. People who don’t even have driving assist systems would benefit with better lines. There are lines around me that are so worn that you can’t see them with the lightest of rains and it has been that way for years. Now that I am teaching my niece how to drive, I notice it more when trying to teach her how to stay within the lane lines….that are almost non-existent. She keeps asking what lane lines?
December 15th, 2021 at 5:18 pm
11 With the low gas tax in the US, and no gas tax for EVs, there isn’t money to paint lines.
December 15th, 2021 at 6:40 pm
#8.) That is my point. They don’t want to loose the OEM investment in their countries, by them moving production to their home market (which they won’t). So, being a lay person and not having read the trade agreement, on the surface, it does not appear that the US has violated the agreement by using their money to encourage it’s citizens to buy BEVs built within their borders. They are not restricting the sell of vehicles made in other countries for being sold in the US, just adding an incentive for those who live here to purchase what is made here! If OEMs want to move production here as a result, that’s not the US government’s fault, is all I’m saying. That’s a business decision, like the one that sent production to foreign sites in the first place. Again, if those incentives went into effect today, they would only apply to a couple vehicles. By the time most of the high profile vehicles that the Big Three promised come to market, there may be a new administration in place, who may remove those incentives anyway!
December 15th, 2021 at 10:42 pm
8,13 The “domestic assembly” incentives are, basically, an inverse tariff. Tax money goes out rather than coming in, but the end result is to incentivize vehicles assembled in the US. What seems to be lost in this discussion is that the proposed incentives now, and the earlier tariffs pertain only to vehicle assembly, never mind that parts come from all over the world, and make up a sizable amount of what it takes to produce a vehicle.
December 16th, 2021 at 4:01 am
The best result of key ingredient shortages for battery cells would be the accelerated buildout of localized supply chains, be it in Asia, Europe, or the Americas. With all the demand and available incentives, I expect related activity to pick up. There’s a big new Lithium plant planned for Portugal, but that’s basic.
As we see with Ford, the planning is only now catching up with reality – I just found out that the cells (modules?) for the Mach-E come from LG’s plant in Poland, and they can’t build nearly enough at present.
Incidentally, it’s probably easier to export vehicles from Mexico to the EU than from the US, as there’s an FTA that covers that. Just not certain if it’s already been ratified.
It’s beyond silly for the US not to have a Canada-style free trade agreement with the EU.
The upside is that there will be far more US content than in the Mach-Es made by Changan in China… (incidentally, I think the city of the same name once was the capital. A famous poet wrote about the desolation following its sacking).
December 16th, 2021 at 10:04 am
#14.) To say that US “‘domestic assembly’ incentives are, basically, an inverse tariff”, would suggest that the current trade agreement, as it stands, does the opposite today and incentivizes moving production away from the US and are using US citizens tax money to do it (essentially putting a tariff on the US, for the benefit of neighboring countries). While do not think or believe that is the case, right now the only country impacted by such a move would be Mexico, with the Mach-E. I may be wrong, but, I do not think Canada right now has any BEVs currently assembled there that would miss out on any US incentives. How this might farther impact Mexico, is that Ford was going to build a Lincoln from the bones of the Mach-E. With the incentives going to UAW build vehicles and the Lincoln version of the Mach-E no doubt having a higher price point, having it built in a UAW plant, would have some appeal. Again, that is a business decision made by the company and has nothing to do with any free trade agreement negotiate between the governments! On top of that, even if they gave incentives to UAW built EVs, there would still be other tax incentives that EVs not built by non UAW shops COULD still take advantage of! As reported on by the news, the $7500 tax credit/incentive was no longer going to be limited by a number of vehicles an automaker sold. Meaning that GM and Tesla could once again have that applied to vehicles that they sold to customers! I would not be surprised, if there were some wording that prevented individuals from using both the UAW incentives, along with the $7500. Even so, there are still other state and local tax breaks that US citizens can now use on BEVs from ALL automakers! So the noise that other world leaders are making, seems like a lot of nonsense. I understand that they want to keep the current manufacturing in their countries as best they can, while encourage future investment and showing support for their workers. Yet, to say that these incentives some how breaches their free trade agreement, would be like the US saying that Canada’s universal Health care breaches the agreement as well! For it gives their automotive sector an unfair advantage. For it will encourage OEMs to move assembly to their country, because they can produce the same product at a lower cost, due to not having to provide health coverage for employees that work. To that I would say, what right does the US have, to have any say in what that country provides for its citizens?! Health coverage has nothing to do with any free trade agreement between two or three nations! To me, it is the same with the incentives for US citizens who purchase BEVs from UAW work places.