This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
EU WILL OFFICIALLY BAN ICEs BY 2035
Well, the European Union has made it official and is banning the sale of new combustion engine cars by 2035. But Germany got its wish by getting a provision that allows for the use of synthetic fuels after that date. Italy wanted to delay the target by five years but settled on a compromise that protects small manufacturers like Lamborghini, which allows them to avoid interim targets until the end of 2035. The deal also includes a cap and trade program to help reduce emissions.
CHINA GETTING GM ‘HALO’ VEHICLES
Chinese consumers will soon be able to get their hands on Corvettes and Escalades. GM signed a Letter of Intent and plans to invest $100 million in a new business unit, called GM Premium Import. It will provide a portfolio of vehicles that aren’t currently offered through its existing brands, including full-size pickups and SUVs as well as performance cars. The new unit is fully owned by GM and will be able to operate with a high level of autonomy. We wonder if that will have any impact on how these vehicles are branded. Will an Escalade still have a Cadillac badge and will a Camaro wear a bowtie? It will be interesting to see how they’re marketed.
APPLE CARPLAY ADDS FUEL PURCHASES
Apple is expanding its CarPlay app to include fuel purchases. The latest version will navigate users to the nearest gas station and allow them to pay for it right from the display screen. Car owners just need to download the app and enter payment information, after that you can activate the pump and pay for gas from the screen. The new feature will debut this fall. Sinclair Oil says it plans to use the new CarPlay technology. The software already allows users to pay for parking, EV charging and ordering food.
NEW GREEN NCAP TEST HARDER FOR ICEs
Several years ago NCAP, the organization that tests and evaluates vehicle safety, introduced Green NCAP, a new initiative that aims to answer the question, how green is your car? At first, it just looked at vehicle emission and efficiency performance from the point of charging or at the fuel pump and compared that to on-road performance. But now it’s making the test tougher. It’s taking a more ‘well-to-wheel’ approach, where it factors in how the energy source was extracted, produced and distributed as well as the construction of powerplants and refineries themselves. And its first rounds of tests show that it’s going to be much harder for ICE vehicles to earn a good score. The Audi Q4 e-tron, an electric SUV, earned 5-stars, but the most the ICE vehicles tested could earn was half that, 2.5 stars. And the Genesis GV70 only mustered 1 star due to its “significant fuel demand.”
BMW KICKS OFF SHARE BUYBACK
BMW announced it is buying back 2 billion euros worth of its shares. It plans to start purchasing the stock in July and be completed by the end of 2023. Most of the shares it buys will be canceled, which will reduce its share capital. And this is just the first step. The company plans to buy back 10% of its stock over the next five years. BMW says this will help maintain its strong investment grade rating and that it will benefit shareholders by increasing their earnings per share.
MERCEDES STARTS EV PLANT TRANSFORMATION
Mercedes has started its EV transition. Its entire global production network is starting to convert to electric. Some of its sites have already started producing BEVs, but by the middle of the decade all of its plants will be electrics. Of course, they won’t be fully electric at first. Sites like its plant in the U.S. will start making the EQS SUV and EQE SUV later this year, but will continue their ICE counterparts, the GLS and GLE.
Most electric cars still use a lead acid battery for all their low voltage requirements. That’s because they’re far less expensive than a lithium battery. But they’re heavy, which hurts EV range. Now a company called Clarios developed what it calls an absorbent glass mat so that it can make low-cost lithium batteries for low voltage applications. And we have Mark Wallace, the CEO of Clarios on Autoline After Hours at 3PM eastern time this afternoon to explain why every electric car will probably start using it.
LITHIUM PRODUCERS OPPOSE CALIFORNIA TAX PROPOSAL
One step forward, one step back. That’s what’s going with the U.S. effort to develop domestic mining sources for lithium used in EV batteries. The Salton Sea in California has large lithium deposits and several companies are setting up mining operations there. But Reuters reports that California is proposing to slap a $400 tax on every ton of lithium that’s mined there. And the more that gets mined, the higher the tax goes, topping out at $800 a ton. Right now a ton of lithium costs $77,500, so the tax, even at the top rate is about 1%. And the money from the tax would help out the Salton Sea area, which is one of the poorest in the state. But the mining companies want a tax levied on their corporate sales, not on each ton that gets mined. They worry that the price of lithium will drop. Even though it’s at $77,500 a ton today, two years ago it was only $6,750. If it drops back down to that the tax rate would be about 6%.
SOARING PRICES FORCE CONSUMERS FROM USED CARS
Have we finally hit the point that soaring used car prices are driving people out of the market? According to Cox Automotive, sales of used cars in the US market are down 16% compared to last year, while prices are up by almost the same amount. And it’s not about limited availability. Inventory of used cars is up 7%. It’s all about soaring prices. They’re up 15% over last year. The average price for a used car with 68,000 miles on the odometer is now just over $28,000. In a good year, about 40 million used cars are sold. This year it will drop to 37 million. So what are people doing? They’re fixing up the cars they’ve got. Cox Automotive is very bullish on the automotive service and repair sector.
MATERIAL INFLATION HITTING AUTOMAKERS HARD
How much is inflation of raw materials hurting automakers? A lot. A report from Alix Partners says that before the pandemic, the raw materials needed to make an ICE car was about $1,900. Today it’s about $3,600, or nearly twice as much. The biggest increase came from steel prices. But the raw material costs for BEVs are much higher, over $8,200.
But that’s it for today, thanks for tuning in.
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Comments (31)
June 30th, 2022 at 12:20 pm
When we looked at a Hyundai Tucson hybrid, we were told than it had a lithium ion 12v battery and we had to start the car every 2 weeks to keep it charged. We couldn’t use a battery tender. We travel sometimes for several months and leave the car garaged. What’s the solution to this problem as lead acid batteries get phased out? Needless to say, we didn’t buy the Tucson.
June 30th, 2022 at 12:39 pm
#1 there are solar battery tenders from as low as about $15 for a 1.5 W from Harbor Freight, even 10W on Amazon for < $30. Just put on I/P or under backlight.
June 30th, 2022 at 12:45 pm
Well Sean I, for one, will be doing just as that Cox Automotive study suggested – wrenching on my existing ride to keep it going another few years or until prices come back down. Fortunately, my particular car is not one that needs a lot of tlc.
June 30th, 2022 at 12:45 pm
Just going to say now that EU will revise that ICE ban before 2035. Also watch what happens to their used car market around that time.
June 30th, 2022 at 12:52 pm
The “new” GM premium Import business unit sounded like a plan for GM to start selling factory direct and most likely online. Yeah they spun it sound like its a way to get vehicles not already offered but sounds like a pilot program to work out the online sales model. I could be wrong.
June 30th, 2022 at 12:58 pm
Way back when I drove a dump truck and could haul 15-20 ton. Man what I would give for a truck load of lithium. Little over a mil per load. Seems that battery price drop they were predicting neglected the raw material price increase.
June 30th, 2022 at 1:06 pm
Put me also in that boat of people that are repairing the vehicle rather than replacing. I typically replace my car every 3/4 years. This current ford Fusion Hybrid I will keep for the long haul. There is no real reason to replace it. To date my repair on the Fusion has been oil changes. That is it.
June 30th, 2022 at 1:12 pm
I guess we will have to wait for more information on how GM goes to market in China with these specialty vehicles. I can’t see them changing the brand since vehicles like Escalade and Corvette are very well known all over the world.
Sounds to me like GM will set up a specialty vehicle distribution unit and grant dealer agreements to the best GM dealers in the cities where GM wants them located. The new business unit gives them complete control and 100% of the profits. They don’t have to have a joint-venture Chinese partner, especially since the vehicles won’t be produced in China, at least not yet.
Any consumer buying a Corvette will expect to be able to get it serviced at a Chevrolet dealership, ditto for Escalade at a Cadillac dealership. I don’t see GM setting up an entirely new dealership network for these vehicles. There isn’t enough volume and it would only create consumer confusion.
June 30th, 2022 at 1:18 pm
Sean, Do you have any information on the change in the number of used cars imported from Canada to the US? At the Sarnia-Port Huron crossing, not a single day goes by without at least one carrier of used pickups and SUVs going to the US. Some days, I’ve seen as many as 10 cross. This seems to have been going on for the last few years but has intensified lately.
June 30th, 2022 at 1:20 pm
1 The lead-acid 12 volt battery in Toyota hybrids like I have has residual drain when the car is parked, and gets charged via a DC-DC converter from the big battery, but only when the car is driven. Yeah, with the lead-acid battery, you can use a tender, but I just disconnect the 12v battery if I’m going to park the car for more than a couple weeks. You could, presumably, do that with the Hyundai.
June 30th, 2022 at 1:22 pm
There are a lot of used cars at the dealers near me, but no new cars. I’d think prices of used cars should decrease, since there is lots of inventory.
June 30th, 2022 at 1:25 pm
@8 since the Cadillac Escalade is mostly built with common GM components, a Chevrolet dealership shop can take care of the maintenance from a technical standpoint. For the “premium experience” a different entrance and shop front and shop reception may be needed but as far as I know there is nothing special to changing oil and filters, rotate tires, etc. on a Cadillac Escalade.
June 30th, 2022 at 1:31 pm
1) “…Although the accessory/starter battery “partition” is adjacent to the main 1.62-kwh hybrid battery, they’re fully independent. If the car’s been parked for a long time and you realize that the accessory battery is dead, you can simply press the “12V Batt Reset” button, which gives a jumper-cable-like boost of current to the smaller battery, which is almost certainly not dead as it’s reserved for the powertrain….” greencarreports
June 30th, 2022 at 1:40 pm
13 Interesting. They would need to remove all load from the 12v “partition” when the voltage drops to ~3.7 volts/cell, or the battery would be destroyed. With the Hyundai, do you use a mechanical key to get in the car to press the “Batt Reset” button, when needed?
June 30th, 2022 at 2:08 pm
This whole ICE ban is very short sighted. It will mean people will keep less efficient vehicles long after the ban instead of getting better emission vehicles which happens year after year. I guess the ultimate play will be to ban new ICE vehicles and then begin to age out older vehicles forcing people into EVs that can’t meet their needs or pocketbooks. Meanwhile those governments will still shuttled around in huge gas guzzlers like our own government is doing right now. look at what biden is shuttled everywhere in and the entourage that travels with I doubt there is a EV among them. Again it is rules for thee and not for me.
June 30th, 2022 at 2:41 pm
@15: “Again it is rules for thee and not for me.”. No, it is called understanding the big picture.
Most U.S. Presidents since President Nixon have tried to improve the environment through their policies. Does that mean that they have to swim to meetings in South Korea and Japan and walk to Camp David? Let’s be smart here, not petty.
June 30th, 2022 at 2:42 pm
15 I suspect there will be “reality checks” on the bans of ICErs, if it becomes clear that there aren’t raw materials to build enough EVs, charging infrastructure isn’t available, etc.
As far as older cars, Japan has had, and maybe still has “forced retirement” of older cars. I don’t know if they are scrapped, or maybe more likely, exported to places like India with much lower per capita wealth than Japan.
I would hope that, at some point, there would be better mass transit in American cities, so fewer cars would be needed in places where cars don’t work very well anyway. Most cities in the EU already have decent transit, but it could be better.
June 30th, 2022 at 3:17 pm
@17 In Western Europe “forced retirement” in cities has been practiced for years. My sister and her husband have had to phase out several of their diesel-powered vehicles because it became impractical to not be allowed in the city when you live a quarter mile from the Amsterdam city limit and the cameras catch you each time.
June 30th, 2022 at 3:33 pm
15-16 Personally I like a leadership that leads by example. Hard to expect people to come in early, stay late if management wont. Which is why I think the 482 Million allocated to develop the next ICE postal vehicle which has yet to determine a price per vehicle created so much heartburn. We are all being pushed to go electric in the next 8 years yet the postal service is awarding a contract to make ICE mail trucks for the next 10 years. Doesn’t seem petty just foolish like pretty much everything this administration does. Being led by feelings and dreams and rainbows rather than data and common sense.
June 30th, 2022 at 3:42 pm
Ive been keeping my cars longer than in the past. They seem to require less upkeep,are more reliable,plus the paint finishes interior etc stay nicer.
June 30th, 2022 at 3:45 pm
15,16 No head of state rides bicycles to events, not even in enviromentally conscious countries like Norway. No US president can “set an example” regarding some things.
As far as the mail trucks, there has been a lot of poor planning over the years, and corrupt crook DeJoy took full advantage in fast tracking the new, ugly gas hogs.
June 30th, 2022 at 3:45 pm
16 It was made pretty clear that way to many in Gov make rules for thee and do not expect them to apply to them. If Covid did anything at all it proved that on a grand scale. While politicians were bankrupting small businesses and shuttering plants and factories. Limited gathering of groups and let people die in hospitals alone. They would have large private parties with no masks and get there hair done like Pelosie. So its pretty obvious that is their mode of operation. To many examples to list.
June 30th, 2022 at 3:46 pm
@19 post your incoherent political babbling somewhere else, clown
June 30th, 2022 at 4:16 pm
23 Typical clown response when its something you don’t agree with. Rather than providing some actual substance to prove me wrong just resort to name calling. LOL Continue to live in your dream world.
June 30th, 2022 at 4:19 pm
24 -Cont Unless they didn’t actually award Osh-Kosh 482 Million for an ICE mail truck. But I believe a simple google search you’ll be faced with facts and not political babbling.
June 30th, 2022 at 7:05 pm
I’ve always repaired my vehicles rather that replace them. My last two trucks I kept for 12 years each. One my son needed so I gave it to him and the other one lived a hard life under my right foot. My wife is close to that number at six years (daughter needed that one) and 10 years. I still do almost all the maintenance on them myself.
June 30th, 2022 at 7:45 pm
24,25 Trump’s hand picked Postmaster General, selected to slow down the mail, is largely responsible for fast tracking purchase of the Oshkosh mail trucks. His name is Louis DeJoy.
July 1st, 2022 at 8:54 am
27 Selected to slow down the mail? Was that part of his job description?
July 1st, 2022 at 10:02 am
28 That is part of why he got the job.
https://www.latimes.com/business/story/2020-08-21/dejoy-appointment-postmaster-dishonest
July 2nd, 2022 at 12:51 pm
Just catching up here…for what it’s worth, AGM has been around quite a while. My 90 NA came with one from the Mazda factory.
July 2nd, 2022 at 12:52 pm
Oh, and they are stupid expensive, asking a premium of about 40-60% of the same capacity wet cell.