AD #2452 – BMW Says Batteries Will Always Be Expensive, Jeep to Make 1st PHEV, Fiat 124 Has Highest Inventory

On today’s show… BMW says EV batteries will always be expensive… President Trump gives the OK to more ethanol in gasoline… and sales of luxury cars are slowing down in China. All that and more coming right up on Autoline Daily.

This is Autoline Daily the voice of the automotive industry.

EV BATTERIES WILL ALWAYS BE EXPENSIVE
Will electric cars be saved by a big battery breakthrough? Never, says BMW. Klaus Frölich, a member of BMW’s board of management says battery costs will not go down with higher manufacturing volumes. As demand for cobalt to make batteries goes up, he says the cost of cobalt will go up. BMW’s cost to make battery packs is between $170 and $250 per kilowatt hour. That means a 100 kWh battery costs between $17,000 and $25,000. At a recent powertrain conference in North America, a battery expert warned automakers and suppliers that battery costs will only come down to about $130 per kilowatt hour by 2030. They would have to drop to about $70/kWh to match the cost of an internal combustion engine.

LUX CAR SALES TANK IN CHINA
New car sales are slowing in China and Bloomberg says luxury automakers are being hit the hardest. Jaguar Land Rover said its China sales dropped 46% last month, which will require it to close one of its plants in the UK for two weeks. It also sent shares at owner Tata Motors down 13%, its largest drop in 9 years. BMW and Daimler as well have issued profit warnings due to their slump in sales, which they say it caused by the trade war between the U.S. and China. And it’s not just luxury brands. GM was down nearly 15% at the end of the third quarter, its first quarterly drop in over a year.

FORD REVAMPS ADVERTISING
Big news in the world of advertising. Ford is dumping the agency WPP in favor of BBDO to do its global creating advertising. WPP will still get some business but will largely handle media buying and website development. Another agency, Wieden + Kennedy, will be retained for special projects. Ford will create 100 in-house positions for brand design and customer experience and expects to save $150 million a year with all these changes.

Coming up next, plug-in Jeeps and a Bugatti SUV.

JEEP PLUG-IN ON THE WAY
Over the next 5 years FCA will be investing over $10 billion in hybrid and electric vehicles. One of those will include a plug-in version of the Jeep Renegade. FCA announced it’s gearing up to start production of the small PHEV at its Melfi plant in Italy. It will not use an existing engine, but gets a new one. The Renegade plug-in should hit the market in early 2020.

EVEN BUGATTI WANTS AN SUV
SUVs are so popular that just about every sports car manufacturer will be making them, like Porsche, Jaguar, Bentley, Lamborghini, Aston Martin and even Ferrari. Now we can add Bugatti’s name to the list. Speaking to Automotive News at the Paris auto show, Bugatti’s president said the company is evaluating engine and chassis options, as well as a possible name for an SUV. Bugatti currently only makes one car, the Chiron. So, what do you think? If you ran Bugatti would you make an SUV?

TOYOTA PROMOTES WHEELCHAIR MOTOCROSS
Toyota is pushing its Mobility for All campaign as it gets ready for the the 2020 Olympics and to that end it just opened the first fully accessible hybrid skatepark in Rome. Not only is it open to BMX-style bicycles and skateboards, the newest Olympic sport, but also wheelchairs that are specially modified for what’s called WheelChair Moto Cross. Toyota says it will add more of these skate parks throughout Europe.

Are you one of those people who hate ethanol in gasoline? Well, you’re going to hate it even more, and that’s coming up next.

TRUMP OK’S E-15
President Trump is going to give the greenlight to boosting ethanol levels in gasoline to 15%. Ethanol was mandated in gasoline decades ago because it burns cleaner. That’s because ethanol has more oxygen in it than gasoline. It also has a higher octane rating, about 113 RON. But ethanol has a lower energy content and can corrode engines and fuel lines that were not designed for it. Some people hate it but American farmers are going to love the move to E-15.

FIAT SPIDER HAS HIGHEST INVENTORY
Automakers are doing a decent job of keeping the lid on inventory levels in the US market. There are 3.7 million vehicles sitting on dealer lots or in holding areas, representing 65 days’ worth of inventory, which is considered just about ideal. The Tesla Model 3 has the lowest days’ supply, with only 3 days’ of inventory at its stores. One of the worst is the Fiat 124 Spider, which has 274 days’ of inventory. That means if they stopped building the Spider today, they would not run out of cars for 274 days. By comparison, its kissing cousin, the Mazda Miata only has 59 days.

And that wraps up today’s report. Thanks for watching.