AD #3567 – George Soros Dumps Tesla, Rivian, Ford Stock; Used EV Sales Booming; BMW Converts To Electric Ovens
May 15th, 2023 at 11:56am
Listen to “AD #3567 – George Soros Dumps Tesla, Rivian, Ford Stock; Used EV Sales Booming; BMW Converts To Electric Ovens” on Spreaker.
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Runtime: 9:10
0:00 Auto Supplier Refuses Airbag Recall
1:04 George Soros Dumps Auto Stocks
1:46 Kia Launches EV Lease Program
3:05 Buttigieg Says Don’t Call It Autopilot
3:34 Used EV Sales Booming
4:39 No More RHD Tesla S & X
5:13 BMW Converts to Electric Ovens
5:58 Some Suppliers Safe from Vertical Integration
6:47 Honda Launches Carbon Neutral Plan
7:23 Honda-Isuzu FCEV For HD Trucks
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AUTO SUPPLIER REFUSES AIRBAG RECALL
I don’t think we’ve ever seen an automotive supplier refuse to participate in a recall. But the airbag supplier ARC Automotive, which is based in Tennessee, told NHTSA it will not recall its airbags. NHTSA wants ARC to recall 67 million airbag inflators because it says they could explode and project shrapnel at occupants. It says two people have died and another seven were injured. But ARC is refusing to recall the inflators because it says there is no defect and that it’s just an isolated manufacturing issue. It also says that NHTSA only has the legal authority to force recalls for car companies and not suppliers. NHTSA’s next step is to schedule a public hearing and then it could take ARC to court.
GEORGE SOROS DUMPS AUTO STOCKS
Billionaire investor George Soros was all in on EVs until he wasn’t. Soros invested heavily in Tesla, Ford and Rivian. But according to the financial news outlet, The Street, he dumped all his Tesla stock and sold off 75% of his shares in Rivian, and sold all the bonds he held in Ford and then bought a million put options to short Ford stock. And he did all this by the end of the first quarter this year. But Soros also bought a million call options on Rivian, which means he thinks its stock will go up in the future.
KIA LAUNCHES EV LEASE PROGRAM
Germany, Japan and South Korea were visibly upset when the Inflation Reduction Act prevented their car companies from getting $7,500 sales subsidies when they exported EVs to the US. The IRA stipulated that EVs and their batteries had to be made in the US to qualify. So the Biden Administration, which needs the support of those allies in other global problem spots, gave them a loophole. It said that if those EVs were leased, that would count them as a commercial transaction, and they could qualify for the $7,500. So Kia just launched a new lease program, knocking $7,500 off the price of the car if customers lease an EV6 through Kia Finance. They have to put five grand down and pay $500 a month for 36 months. If they decide to buy the car, they’ll get $3,750 off the price. The lease program runs until July 5, but we think it’s likely it will get extended after that. In fact, we expect every automaker to offer lease programs until they build EVs in the US with batteries that qualify for the federal credit. Next year, Kia will start making the EV6 in the US.
BUTTIGIEG SAYS DON’T CALL IT AUTOPILOT
He seems a little late, but U.S. Transportation Secretary Pete Buttigieg says Tesla should not call Autopilot, Autopilot. He’s concerned at how the system is depicted because it’s not a fully autonomous system like the name implies. NHTSA is investigating Tesla because of dozens of crashes involving vehicles suspected of operating on Autopilot which hit parked emergency vehicles and semi-trailers.
USED EV SALES BOOMING
Will people actually buy used EVs? Why yes, they will. According to Cox Automotive, used EV retail sales through licensed dealers hit nearly 43,000 units in the first quarter of 2023, which is up nearly a third from a year ago. And at the same time, used EV prices fell 4% to an average of $43,400. The average new EV sells for nearly $60,000. But while used EV sales were up strong, they still only accounted for 1% of all used vehicle transactions. However, as more EVs enter the market, Cox expects sales to keep growing.
NO MORE RHD TESLA S & X
Tesla is killing off right-hand drive versions of the Model S and X. It’s no longer taking orders in places like Japan, Australia, Singapore, and Thailand. Tesla also sent an email to people with existing orders and said they could either get a full refund or get a left-hand drive version instead. Tesla doesn’t sell a lot of Ss and Xs, it only delivered about 10,700 globally in the first quarter. So we think there wasn’t enough demand to justify making the right hand steer versions.
BMW CONVERTS TO ELECTRIC OVENS
There’s a lot of controversy about the EPA wanting households to convert from gas stoves to electric ones to reduce CO2 emissions. But BMW just spent big on a new electric oven for heat treating gears. Instead of using 33 gas-powered flame heaters to bake things like gears for EV transmissions up to 900 degrees Celsius, it uses the same number of electric heating elements to do the same thing. By using electricity instead of gas, BMW will eliminate up to 300 tons of CO2 per year. The new furnace cost about 7 million euros, but it has a service life of 40 years and can heat treat about a million gears a year.
SOME SUPPLIERS SAFE FROM VERTICAL INTEGRATION
Suppliers were going to be in big trouble during this EV transition, so the thinking went. The belief was that legacy automakers would copy Tesla and start vertically integrating to pocket the profits that the suppliers make. But that’s not exactly happening. Automotive News reports that automakers are actually giving suppliers more control over certain commodities, like seats. That’s because automakers have to concentrate their resources on developing software defined cars, new electronic architectures and data management. Meanwhile, suppliers have thousands of engineers to concentrate on what they make best, so automakers are still relying on that expertise rather than bringing it in-house.
HONDA LAUNCHES CARBON NEUTRAL PLAN
Honda is jumping onto the carbon neutrality bandwagon. It’s officially rolling out its Triple Zero plan, which includes making sure all Honda’s products and corporate activities don’t have an overall negative impact on the environment; that the company creates a material loop through recycling; and that it produces more products that run on clean energy, like electricity and hydrogen. Honda will come out with a fuel cell version of the CR-V next year and it’s making fuel cell power generation stations, which both utilize the system it developed with GM.
HONDA-ISUZU FCEV FOR HD TRUCKS
… And it announced plans to start real-world tests of a heavy-duty fuel cell truck with Isuzu. The two actually started research in hydrogen-powered heavy trucks in 2020, but say they’ll finally get to on-road tests sometime before the end of March next year. The initial agreement said they would leverage Honda’s fuel cell know-how, so it will also likely use the fuel cell system developed with GM. After testing Isuzu plans to introduce a hydrogen-powered truck to the market in 2027.
But that brings us to the end of today’s show. Thanks for tuning in.
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Comments (22)
May 15th, 2023 at 12:29 pm
I guess when it comes to the ARC airbags it really depends on how ARC knows this is an isolated manufacturing defect, and isolated to what? Isolated to the two failures that already killed people or to that day of production or maybe a few thousand. I’m not surprised that the NHTSA just doesnt go after the car manufacturers which will just forward the recall costs back to ARC anyway. Thats what happened with Takata.
May 15th, 2023 at 12:32 pm
67 million airbags with 2 deaths and 7 injuries. That’s an amazingly reliable safety product. NHTSA is overstepping a bunch. They are setting standards that manufacturers will refuse to sell product into the U.S. market.
May 15th, 2023 at 12:35 pm
Sean maybe you can answer this? The $7500 thats part of the IRA is that still a tax credit or a rebate? Because I know when you lease vehicles now and you want to purchase after the lease is up. You pay taxes on the balance and includes rebates or discounts from the manufacturer. Maybe thats just my state but I wonder how that plays out in these EV leases.
May 15th, 2023 at 12:55 pm
Not sure a KIA EV6 warrants $638/month before taxes and other leasing fees.
May 15th, 2023 at 1:24 pm
GM announced this morning that they will be recalling their large Chevy, Buick and GMC crossovers from 2014 – 2017 for this airbag inflator problem. It seems that the problem with all of them is that as they get older, under certain conditions, they could go off randomly. Their safety record could get a lot worse as time goes by. For me, I would rather not drive a vehicle with a potential time bomb sitting in front of me.
May 15th, 2023 at 1:37 pm
F Soros and as far as getting rude of ovens like NY is stupid as it gets
May 15th, 2023 at 1:38 pm
@1, 2, 5 I did not know ARC so just looked it up: airbag producer ARC Automotive was purchased by Chinese YinYi Group in 2016. The Chinese owners probably want to avoid major cost.
May 15th, 2023 at 1:45 pm
I just got back from Belgium and The Netherlands. No way total electrification. Way too many existing cars on roads. Mass car ownership. By the way no traffic scars from crashes like on our streets. Greater density of traffic and the almost never hit each other.
May 15th, 2023 at 2:00 pm
For insights on investing, I follow Sandy Munro and other engineers. Everyone else is at best a pretender.
May 15th, 2023 at 2:05 pm
Used EVs….I just took a look at the Mach E battery warrantee online. 8 years/100K has some great fine print. Reman batteries if replacement called for as long as the battery has been properly charged and cared for. You can see the fights coming. As they say in Shark Tank, “I am out”.
May 15th, 2023 at 2:10 pm
Victor my guess is it is a lot harder and more expensive to get a license over there. I know Germany is very strict with their standards for getting license and it is not cheap. I would guess the other Euro countries are also.
May 15th, 2023 at 2:23 pm
@8 I grew up in the Netherlands and spend one month per year there divided over five visits during which I drive a lot between the major cities Amsterdam, Rotterdam and The Hague, so know the traffic situation well. I am glad you had such a good impression, but believe me, accidents do happen. The number of road deaths per 100,000 inhabitants and also per 100,000 motor vehicles is a third of ours in the U.S. so much lower but not zero.
As to electrification: I believe nowhere electrification can be 100% because there are use cases for which an ICE is better suited. I am no expert but expect the percentage of EVs in the Netherland to become among the highest in the world: small area with 17 million inhabitants with a high income per capita, smaller vehicles, very mild winters, a population pro-environmental protection (but strongly opposed to several measures implemented recently which are considered overdone). The use cases which do not favor EVs for many of the Dutch population are long road trips to France, Spain, Austria during the long vacations in summer and winter. So there are limits to electrification in the Netherlands, too, until the battery charging issue has been resolved well.
May 15th, 2023 at 2:36 pm
@11 you are right. Getting a license is not considered a right but a privilege which has to be earned. Driver’s education is strict and the tests are rigorous. Not as sweet as I have seen in the U.S. when my kids got their driver’s licenses. The bar was very low. Our death rate is 3X, partly caused by poor driving skills and discipline of many.
In Western European countries speed limits are enforced by radar. 2 Miles per hour over speed limit gets you a ticket. I learned that the hard way myself: my mom’s vehicle, which I used a lot does not have cruise control. Apparently I need that because after a few years my sister told me: “You may not be aware of it, but mom usually pays $300-500 in speeding tickets in the weeks after your visits.” When I asked my mom why she never informed me, she said “I am so happy that you visit me so often, so I am happy to take care of the tickets.”
May 15th, 2023 at 2:37 pm
Regarding discontinuing RHD S: Anyone else feels Tesla doesn’t prioritize customer relations? I walked away from a M-Y because I decided to visit their delivery center and was appalled by how they reacted when I asked for a test drive. Tesla changes prices & features as frequently as we cut grass. Car companies announce ahead of time when they’re discontinuing products, obsolescence is planned, always (See Chevrolet’s Bolt communication). Companies treat customers with respect otherwise they ultimately lose.
May 15th, 2023 at 2:49 pm
12 Wim – Nice. I’ve been often. Amsterdam Centraal was one of the first places Tesla Model Ss could be habitually seen in Europe. One of the challenges for full electrification will be the ubiquitous caravans
May 15th, 2023 at 2:53 pm
@14 I have only visited a TESLA delivery center once, so this is not representative for their operation. A friend of mine was very keen on owning a Model X. Availability was very limited: there was one as he wanted it in Columbus, Ohio. A 220 miles drive and he did not know how to get there. He thought about taking an UBER but even he thought that was too much money. I offered him to drive him there, I had just gotten my Diesel powered-Wrangler and did not mind driving a longer distance. He had raved about the easy sales process, all online. The delivery of this $120,000 vehicle was very underwhelming: friendliness of the staff comparable with when I pick up a pizza. They had not even charged the vehicle, so he left for Detroit with a 50% charged battery. He made it to his house without charging but I thought it was poor customer service on many levels.
May 15th, 2023 at 3:49 pm
Great comments/great show today
May 15th, 2023 at 4:47 pm
16 That is seriously poor for a $120K vehicle. The Porsche dealer did much better with my “cheap” base Cayman. It even came with a full tank of gas.
May 15th, 2023 at 4:58 pm
14 I’m not surprised that Tesla are dropping the RHD S and X. They would be very low volume. I assume they will keep the RHD 3 and Y.
I am surprised that they didn’t want to give a test drive. I drove through the Tesla store near me recently, and they offered me a test drive, even though I told them I wasn’t in the market, not having home charging, and I’d had a test drive a few months ago. I think the test drives may be only Model 3, unless they think you are a serious prospect for others.
May 15th, 2023 at 6:13 pm
19 – Yeah I was buying the Y, and a dry ‘no’ instead of telling me (which I later found out) that they had a location downtown I could schedule a test drive, it turned me off as I wondered if I would have had to deal with that attitude for servicing later. In either case I feel I got something else I like more, in the end it worked out for me.
May 15th, 2023 at 8:23 pm
20 So what did you get?
May 16th, 2023 at 3:42 pm
XC60 recharge. Google software issues but once those were sorted it’s been great.