AD #3552 – Lithium Prices Crashing; CATL Profit Up 557%; UAW Lays Out Contract Goals
April 24th, 2023 at 11:59am
Listen to “AD #3552 – Lithium Prices Crashing; CATL Profit Up 557%; UAW Lays Out Contract Goals” on Spreaker.
Follow us on social media:
Runtime:9:41
0:00 UAW Lays Out Contract Goals
1:15 Tesla to Ship Chinese Ys To Canada
1:47 Tesla Makes Progress On 4680 Batteries
3:24 GMC Hummer Adds Trim Lines
5:01 Audi Goes for Long Range A8 EV
6:01 Waymo AV Responds to Cop’s Hand Signals
7:29 Lithium Prices Crashing
8:13 CATL Profit Up 557%
8:46 California Hits BEV Goal 2 Years Early
Visit our sponsors to thank them for their support of Autoline Daily: Bridgestone, Intrepid Control Systems, and Schaeffler.
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
UAW LAYS OUT CONTRACT GOALS
Shawn Fain, the new president of the UAW, signaled his top priorities in reaching a new labor contract with GM, Ford and Stellantis this fall. In an interview with the Automotive Press Association last Friday, Fain said the union wants to get back COLA, or automatic cost of living adjustments for his members. He also wants to eliminate the so-called “tiers,” where new workers start at a lower wage rate and take several years to earn equal pay with legacy workers. Fain said it was unacceptable for the base pay at GM’s Ultium battery plant in Ohio to start out at only $16.50 an hour and top out at $20. And he also said the UAW is going to take a more aggressive approach to organizing EV startups as well as the plants operated by foreign automakers in the United States. We’ve got a link in today’s transcript if you’d like to watch that entire interview.
TESLA TO SHIP CHINESE Ys TO CANADA
Even though Tesla already has two assembly plants in the United States, it’s going to export Model Ys built in China to Canada. Reuters reports that the entry-level rear drive models will be priced at $44,275, which is over $7,000 cheaper than the long-range Model Y that’s sold in Canada now. The Chinese version will also qualify for a $5,000 Canadian EV subsidy. Deliveries should start in another month or two.
TESLA MAKES PROGRESS ON 4680 BATTERIES
Speaking of Tesla, its VP of engineering recently answered questions about the company’s efforts to produce 4680 battery cells. It currently makes them on a pilot line in Fremont and is seeing some impressive improvements with its structural battery packs. It’s spending 50% less to manufacture the packs and they require 66% less space to output the same amount of gigawatt hours. But it will eventually switch to making 4680s in volume at its new Cell Factory in Texas. It says it’s “part way” in fully building out that plant, which it hopes to get steady production from next year. This year, part of its goal is to have material production for its cathodes complete, which will include lithium supplied from its Corpus Cristi mine that breaks ground next month. Tesla hopes by 2026 that it will be spending 70% less per gigawatt hour than a typical battery cell factory.
GMC HUMMER ADDS TRIM LINES
GMC is expanding the Hummer EV lineup for both the pickup and SUV. Until now only the Edition 1, which has all the bells and whistles, was available. It says it’s going to continue offering that package, but is also adding the 3X trimline. The main differences are the 3X comes standard with 22-inch wheels and 35-inch all-terrain tires, instead of 18-inch wheels and 35-inch mud tires, and without the Extreme Off-Road package, which includes that 18-inch wheel and tire setup, skid plates and underbody cameras. However, 3X owners can still order that package if they want. Hardware-wise, the Edition 1 and 3X are the same. Same 210+ kWh battery pack. Same tri-motor setup that makes about 1,000 horsepower in the pickup and 830 horsepower in the SUV. But the standard 3X with 22-inch wheels must be lighter because it offers 1,000-pounds more towing, 8,500- instead of 7,500-pounds, and more range; the pickup goes from 329- to 355-miles, while the SUV goes from 298-miles to 314. However, it’s going to be a while before people get their hands on a new Hummer EV. Orders are full right now and GM only made 2 Hummer EVs in the first three months of the year.
AUDI GOES FOR LONG RANGE A8 EV
Autocar has some bold claims about the all-electric version of the Audi A8 that is supposed to go on sale next year in Europe. It says the styling will be ultraslick and much more closely related to the grandshpere concept that debuted a few years ago. It predicts it will ride on the biggest version of the PPE platform that was developed by both Porsche and Audi. It’s an 800-volt architecture that allows charging of up to 270 kW and can accommodate 120 kWh battery packs. It could offer “one of the longest ranges of any EV on sale.” Audi’s head of user experience says the electric A8 interior won’t “overload” passengers, instead it will “give you more of a digital experience with less physical architecture.” Now I’m even more excited to see what Audi actually shows off.
WAYMO AV RESPONDS TO COP’S HAND SIGNALS
A video of a police officer directing an autonomous Waymo vehicle to pull over went viral on TikTok. The incident occurred a little over a week ago in Phoenix, Arizona. The vehicle encountered a parade and an officer in the road directing traffic tells the Waymo car to pull to the side so oncoming traffic could pass through. In the video, you can see the officer try to direct the car and also hear the passenger try to explain they can’t move it because they’re not driving. The Waymo did respond to the officer’s direction, pulled to the side of the road, then performed a multi-point turn and moved out of the blocked lane within 90 seconds. The passenger also received a call from Waymo support, who stayed on the line until the passenger reached their destination.
LITHIUM PRICES CRASHING
Last November lithium prices hit a record $86,000 per ton, but last month they took a nosedive and fell to $52,000. And this month they collapsed further to only $25,000. And it looks like prices could fall even more. Reuters reports that Argentina is about to bring mining online that could triple the country’s lithium production over the next two years. That would push Argentina ahead of China in lithium production, and put it closer to Chile. Australia is the largest producer. The bottom line is that all this is going to bring down the cost of making batteries for electric vehicles.
CATL PROFIT UP 557%
Those collapsing lithium prices probably played a big role in boosting the financial performance of CATL. The world’s largest EV battery producer saw its profits shoot up 557% in the first quarter this year to about $1.4 billion. Its revenue jumped 83% to $12.9 billion, and it generated $3 billion in free cash flow which is going to let it invest even more in R&D and battery plants.
CALIFORNIA HITS BEV GOAL 2 YEARS EARLY
In 2012, California set a goal of getting 1.5 million BEVs, fuel cells and plug-in hybrids on its roads by 2025. That sounded pretty ambitious. But Governor Gavin Newsom announced that the state passed that goal in the first quarter of this year, two years ahead of schedule. California leads the nation in EV adoption, but what happens in California usually spreads to the rest of the country.
But that brings us to the end of today’s show. Thanks for joining us.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
Share
Permalink
Comments (31)
April 24th, 2023 at 12:35 pm
1.5 Million sounds impressive, and in a state like Michigan that would be almost 16% but California has 31 million registered vehicles. So its like 5% which is still way above the national average.
UAW may not like the Tier pay scale but I know line workers dont like the idea of someone just starting tomorrow making what took them 15 years to make. Sounds like a socialistic union and doesnt reward anyone for staying or years of service. The problem will be soon as they find a different employer paying 50 cents more an hour they’ll leave. Your not giving up anything cause if you come back you’ll start at the same pay as everyone else. Good luck with that.
April 24th, 2023 at 12:35 pm
Will the Waymo vehicle learn how to react to other drivers using one digit salutes and other rude behaviors? How about road rage drivers bumping and hitting your car?
April 24th, 2023 at 12:41 pm
How clueless is this UAW President? Ford is already going to offshore 2 vehicles that were built in NA. Does he want all the jobs to go that way? News flash The US companies don’t have 80-85% of the US sales market they did 50 years ago. Get your head in the game were playing today. How good is those high wages and benefits if the job disappears overseas in 3-5 years. You don’t think the present administration is going to do anything about it. He’s too busy trying dig his fingers deeper in our pockets.
April 24th, 2023 at 12:50 pm
Mines take up to 10 years to ramp up production. Lithium price volatility will not help the volume increase needed to meet battery needs. Miners need stable pricing before they commit to new mines.
April 24th, 2023 at 12:53 pm
@1 As a union worker I wouldn’t care if someone made the same as me just starting and if you do then you’re not a true union bother or sister. Also if you leave and come back you loose seniority and usually vacation, those aren’t small things.
Also Socialism- the term people like to use for anything and everything they don’t like, has nothing to do with equal wages.
April 24th, 2023 at 1:20 pm
5 Actually Socialism by definition: The means of production, distribution, and exchange should be owned or regulated by the community as a whole.
So yeah I would say the UAW regulating the pay as a whole even for everyone is inline with that term.
I also believe you are a rare in your feelings toward equal pay regardless of years of service just from the conversations I’ve had with line workers. A tiered system is fair and how it was explained to me by one guy. I can do any job on here because of years of experience. So I often get the more difficult ones to meet rate. The new guys get placed on the easy jobs so they can get the swing of things yet we make the same pay? You can be a union brother and support each other and still not have to have everything equal. Service has to count for more than seniority to get the vacation times you want.
April 24th, 2023 at 1:20 pm
In Canada, Tesla is a foreign manufacturer, period. If a foreign manufacturer switches the supply of cars from one foreign country to another, what difference does it make. If the new cars are cheaper, I say go for it. If Tesla wants to become a domestic manufacturer in Canada, that would be different.
April 24th, 2023 at 1:27 pm
Only 2 Hummers so far? No surprise. My Lyriq has been on order since July.
April 24th, 2023 at 1:44 pm
@Tony Gray – The Lyriq’s are coming out faster than the Hummer EVs. A little more than 950 made in Q1.
April 24th, 2023 at 2:13 pm
1 & 6 – The UAW exists to bargain on behalf of its members, nothing to do with socialism. Their job is to argue in favor of the employees, not the company. Obviously the leverage the companies will always have is the economics of pushing the bar too high with concessions, poorly negotiated deals can easily destroy secular businesses very quickly. Whether we like what the UAW asks or not is irrelevant, and so are our (outsiders) opinions as of whether the unions existence in this country are still justified.
April 24th, 2023 at 2:13 pm
I’d be interested to know of those 1.5 million BEVs how many are used as primary transportation or merely just owned . I have a truck and 4 70′s musclecars, but none are my primary transportation. BEVs will work fine for some folks and not so much for others . I still don’t see the need to rush out something that doesn’t work for the majority of people.I find it amazing that in the land of rolling brownouts so many are willing to depend on something that isn’t dependable yet. If there is no power to charge the batteries you are stuck. At least with gas you can get somewhere where there is still power.
April 24th, 2023 at 2:18 pm
@ # 6 In the UAW cases they may not be bothered if someone with no skill walks in off the street and starts installing lug nuts on the line next to them for equal pay , but I can assure you that someone in a skilled trade that has spent years to gain the skill required for doing their job won’t be willing to see that.
April 24th, 2023 at 2:20 pm
In 1990 Cailfornia Air Resources Board (CARB) started the Zero-Emission Vehicle (ZEV) Program which the Board required that in 1998, 2 percent of the vehicles that large auto manufacturers produced for sale in California had to be ZEVs, increasing to 5 percent in 2001 and 10 percent in 2003. NONE of these requirements could be met. So, every few years they keep revising/changing the requirements and until they can now say “California Hits Zero-Emission Vehicle Sales Goal Ahead of Target”!
April 24th, 2023 at 2:40 pm
Once solid state batteries for EVs are fully developed for large scale manufacturing, all the investment in current EV battery manufacturing and mining will be obsolete. Concerning that Ford, GM, and Tesla are spending billions now that could be worthless in a few years.
April 24th, 2023 at 2:42 pm
Tesla seems to favor foreigners over Americans. The RWD Model Y is sold in China, and will now be sold in Canada, but 4WD is mandatory in the U.S.
April 24th, 2023 at 2:53 pm
12 UAW skilled trades get higher pay than general clearing.
April 24th, 2023 at 2:55 pm
11 An EV will work well as one of the vehicles in most multi-vehicle households.
April 24th, 2023 at 3:12 pm
10 I used the term socialistic not socialism and wasnt implying anything political. But when everyone gets the same pay regardless of service or skills it is just that.
The funny thing is back around 2008 when the auto industry realized it couldnt keep paying $35 hr for line workers they took on this tiered system with a much lower starting point to allow new workers to be brought in at $16 an hour. This allowed them to be more competitive and once they got a bunch of new folks hired and business picked back up, they voted on eliminating much of the retirement benefits in favor of higher pay. Which of course now that they had all these new workers far from retirement age it passed no problem screwing their old union brothers in the process. So much for union brotherhood. They wanted the higher pay now, and worry about retirement later. They can make it a flat rate but personally I find it a very discouraging. Personally I like being rewared for a job well done.
April 24th, 2023 at 3:51 pm
The tariffs on imported Chinese cars is 27.5% in the US. What is it in Canada?
The answer may explain why Chinese Teslas are heading to Canada.
April 24th, 2023 at 4:04 pm
18 From what I find, it’s 6.1% for imported cars to Canada. It’s zero for cars from US and Mexico, because of New NAFTA.
April 24th, 2023 at 4:07 pm
I’m missing what the UAW has to do with socialism. Socialism is things like fire departments, public schools, etc.
April 24th, 2023 at 5:25 pm
19. If this is the case, Canada may see a significant increase in imported Chinese cars.
From what I can remember, the Canadian market is approx. 2.5 million units per year. At least pre-pandemic.
April 24th, 2023 at 5:40 pm
21 I found the 6.1% one place, but didn’t look farther. No guarantee it is accurate. Of course, it is subject to change.
April 24th, 2023 at 5:59 pm
It’s good to see Tesla moving ahead with cathode materials production (usually sourced from China).
The BYD Seagull looks like a promising little EV. A bit like an updated BMW i3, but at a very cheerful price (starting at about $11K). BYD is on a roll, judging by their sales in China.
April 24th, 2023 at 6:54 pm
Lamb2015, I think you might have been a victim of spellcheck/autocorrect, for in your common at #5 it says “socialism” and not “socialistic”, as you mentioned in comment #10. With all this talk about unions and varying pay scales, I don’t think that all of those comments reflect what is or might be taking place at the UAW. While I had a father who retired from one of the Big Three, as well as a brother and cousin who currently work for two different Detroit Three automakers, who are under the current Tier arrangement. Where I work now, we have a union and the job has, as they call them, step raises in our contract. As I understand, and I’m sure someone will correct me if I’m wrong, while they may be a 2 Tier system in the UAW contract, step raises, where, progressively, one may start at ~$15 an hour, but over time the move from Tier 2 to Tier 1! So, no one coming off the street makes the same amount and a seasoned employee. Also the harder, more difficult jobs no one wants, those are the jobs the new recruits do, with the easier, least laborious jobs go to those with higher seniority!
April 24th, 2023 at 6:55 pm
…that is, unless I am mistaken.
April 25th, 2023 at 5:49 am
I don’t think the new UAW president intends to to accomplish all of what he mentions, but, as Sean said, he is just laying out his goals. In terms of eliminating the Tier system, Automakers and membership have to both agree to it, for one thing. Organizing transplants and upstart has been a tall task for years, yet I suppose he is indicating, under his leadership, the UAW has not given up that fight.
With the price of lithium coming down, I wonder how much of that price fall will actually be seen and felt in EV prices? When competition is good, the consumer wins, but until OEMs see real price changes with the competition, they will be reluctant to move the needle, especially since customers have been willing to pay the higher price! Just a thought.
April 25th, 2023 at 7:59 am
Regarding Tesla’s anticipated battery cost reduction, I think it’s important to realize Drew Baglino was talking about capex (capital expenditure), not pack or cell cost. Quote:
“for the Texas 4680 factory, we are part way through building and commissioning and installing and operating, will be 70% lower capex per gigawatt hour than typical cell factories when fully ramped in line with what we described on Battery Day. And we’re continuing to further pursue densification and investment reduction opportunities in future factory buildouts like in Nevada.”
April 25th, 2023 at 8:42 am
24 Thanks but my post on 6 was just clarifying for 5. In my original post (1) I stated socialistic and had no idea it would ruffle so many feathers. Maybe should have used some other term but it seemed to fit in the sense of making everything equal and paying everyone the same regardless of the job or experience. I understand in a large factory or any large business its very difficult to treat employees as individuals with everyone so prepared for a discrimination lawsuit on the most minimal of reasons. Flat rates pretty much squash that and insure that everyone is treated equally. However it also tends to squash that desire to perform and go the extra mile. Why would you when you get nothing extra in return.
For those that never heard this story;
An economics professor at Texas Tech said he had never failed a single student before but had, once, failed an entire class. The class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said ok, we will have an experiment in this class on socialism. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.
After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too; so they studied little …
The second Test average was a D! No one was happy. When the 3rd test rolled around the average was an F. The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else. All failed to their great surprise and the professor told them that socialism would ultimately fail because the harder to succeed the greater the reward but when a government takes all the reward away; no one will try or succeed.
April 25th, 2023 at 9:09 am
28) My issue with this new UAW leader is that it is the same tired playbook of every person before them. The membership is soon to be faced with staggering member losses due to the switch of propulsion technology. Yet this person is harping on about pay issues. By the time the contract expires, up to 50% of their membership will become obsolete. That extra $10 isn’t going to mean anything when they are out of a job.
This is where their leader needs to be honest and up front with the members and tell them what they will face in the next 4 years. Their leader also needs to think outside of the box. Maybe identify who is most likely to be gone within the next 4 years and work with the OEMs to help pay these people for retraining that can help them secure a future role that is not being obsoleted. Maybe the OEM will pay for college or a trade school or some other type of educational opportunity to help transition the workforce to a new reality.
Or maybe they can just get them $10 over the next 4 years. I am sure that $10 will come in handy in the unemployment line. That is basically all this leader is offering with the stated “goals”. At some point the UAW will learn it is not 1935 anymore.
April 25th, 2023 at 9:56 am
29 Your absolutely right. The auto industry is on the cusp of the largest change they have experienced in years. We keep hearing that EVs require 1/2 the labor but I’m not sure we have actually seen that in practice. In fact most EVs are pretty low volume for the size (mega) factory and # people being used. So maybe UAW members will move from auto assembly to battery assembly. Mega Casting? Or maybe even creating the batteries from the raw materials. But like you stated pushing for a wage increase always seems to be at the top of the agenda. Maybe offering new skills or training should be.