AD #4300 – Chinese Cars Infiltrate America Anyway; U.S. Fees Fleece EV & Hybrid Drivers; Carvana Rattles Stellantis Dealers

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

CHINESE CARS INFILTRATE AMERICA ANYWAY
A bi-partisan effort is underway in the U.S. House and Senate to ban Chinese cars and technology from the U.S. market, but that’s not deterring some Chinese automakers. In January, Autoline broke the story that Geely plans to enter the U.S. market by the end of the decade. It plans to build Zeekrs and Link & Co cars at Volvo’s assembly plant in South Carolina. And now Great Wall Motors says the U.S. is the Number One market it wants to get into. We’re assuming it’s also looking at making cars in the U.S.

CHINESE ROBOTAXIS DODGE U.S. TECH BANS
Chinese companies are leveraging their expertise in robotaxis to crack open the U.S. market, Ecarx, which is backed by Li Shufu, the CEO of Geely, is going to make electric robotaxis for May Mobility, the robotaxi company based in Michigan. Up to now it’s been using Toyota Sienna minivans. Getting robotaxis from China will cut the cost in half, according to Ecarx, even with 100% U.S. tariffs. And it says the robotaxis will be compliant with U.S. regulations that bans Chinese tech for software and hardware related to communication and connectivity.

XPENG ROBOTAXIS DITCH LIDAR FOR CAMERAS
As we’ve already reported, Waymo is using Chinese-made robotaxis that it’s buying from Zeekr, which is part of Geely. They’re already up and running in San Francisco, Los Angeles and Phoenix. Today, XPeng officially started mass producing robotaxis that it will start testing in Guangzhou soon. Like Tesla, XPeng will not use lidar for its autonomous taxis and will use cameras and AI instead.

WERIDE PLANS MASSIVE ROBOTAXI FLEET
Just to show you why there’s so much interest in the robotaxi business, WeRide says its revenue shot up 58% from a year ago. The company is still losing money, but its gross profit hit an impressive 35%, and the expectation is that it is on its way to becoming profitable. It’s delivering 17 rides per car on average, with peak times hitting 28 rides. WeRide only has 1,300 robotaxis in its fleet right now, but expects to grow that to 200,000 in the next five years.

WILL ROBOTAXIS CRIPPLE CAR SALES?
So what happens to car sales when there are millions of robotaxis in service around the world? Legacy automakers don’t want to talk about it because they don’t want to upset investors that they might become much smaller companies in the future. But it’s our duty at Autoline to ask uncomfortable questions like this. Because unless you know the challenges you face, you can’t plan ahead to deal with them.

CARVANA RATTLES STELLANTIS DEALERS
Used car retailer, Carvana, has quietly acquired about half a dozen Stellantis dealerships across the country over the past year. It’s selling new cars on its website and providing home delivery, just like it does with used vehicles. And Stellantis dealers aren’t happy Carvana is part of their network. At a recent meeting with company executives, dealers brought up concerns over Carvana taking sales away from them since it can undercut their prices and offer free shipping to customers, who might be hundreds of miles from the nearest dealership. And no wonder they’re worried. One Carvana dealership in Phoenix is selling 350 vehicles a month, compared with 30 to 50 before it took over.

U.S. FEES FLEECE EV & HYBRID DRIVERS
The U.S. House of Representatives introduced legislation to impose a yearly $130 fee on electric vehicles, which will gradually rise to $150. They also want a $50 fee on hybrids. Committee leaders say the fees are necessary so EVs and hybrids “pay their share” for road repairs. But opponents point out that gas-powered vehicles only pay $88 on average in federal gas taxes. For a deeper dive, check out my interview with Chris Harto from Consumer Reports about why the fee isn’t fair.

           

RENAULT LAUNCHES NIAGARA HYBRID TRUCK
Some automakers are late to the party for pick-up trucks, but like the saying goes, better late than never. Renault is getting ready to reveal a pickup called the Niagara in September, and will start selling them in the Latin American market right after that. It’s inspired by a concept that debuted in 2023 with the same name and is based on a new Renault Group modular platform. It’s capable of supporting gas, diesel, flex fuel, LPG, mild hybrid, full hybrid and both front- and 4-wheel drive. The concept was shown with a mild hybrid setup with an additional electric motor on the rear axle.

GEELY BUYS RADAR PICKUP BRAND
Speaking of pickup trucks, Geely is fully taking over its Radar brand, which it helped establish in 2021. Radar sells PHEV and pure electric passenger trucks in China, Southeast Asia, Latin America, the Middle East, and Africa. Absorbing Radar into its broader pickup operations will help consolidate assets and will give Geely access to its sales and service centers. Plus, it’s getting Radar on the cheap, only $32 million to make Radar a wholly owned subsidiary.

RISKY AUTO LOANS SPARK ALARM
I don’t know about you, but I don’t think this is a good sign. Auto lenders are loosening their standards and the number of subprime borrowers hit its largest share in years. Subprime borrowers are people who have risky credit scores. According to Experian Automotive, 15.4% of loans, for both new and used cars in the 4th quarter, were for subprime or deep subprime borrowers. It was only 0.8%, but it was the largest fourth quarter share since 2021. Obviously, the lenders want to bring more buyers into the market. And those people need cars. But when you lower your standards to boost your business, you’re just asking for trouble somewhere down the road.

And that wraps up today’s report. A big shoutout to all you Patreon and YouTube members. We’re truly grateful for all of you who support this show. Thanks for watching and we’ll be back here again tomorrow.