AD #2605 – Tesla to Update Model S, Ferrari Reveals Its First PHEV, U.S. Could Carry Brunt of FCA & Renault Merger

This is Autoline Daily reporting on the global automotive industry.

CHINA COULD RESTRICT RARE EARTHS
The trade war with China is heating up. The Chinese government is now threatening to restrict sales of rare earth minerals to the U.S. which are used in a number of different car components. China dominates the global market for rare earths and accounts for 80% of U.S. imports. According to Reuters, there are three companies building rare earth processing plants in the U.S., one is expected to open next year but the other two won’t open until 2022 at the earliest. So if China does restrict sales, it would make it very difficult for companies to find different sources for rare earths.

TESLA TO UPDATE MODEL S
The Tesla Model S is a little long in the tooth but will soon be getting an update. CNBC reports it will get a full refresh, including a minimalistic interior, similar to the Model 3. It’s also gets the same seats as the high-end Model 3 and a battery that delivers 400-miles range, up from the current 370-miles with a 100 kWh battery pack. It should be out in September.

FERRARI SHOWS ITS FIRST PHEV
Ferrari is coming out with its first plug-in hybrid, the SF90 Stradale. It produces nearly 1,000 combined horsepower from a turbo V8 engine and 3 electric motors. Zero to 100 km/h comes in just 2.5-seconds. But the all-electric range is just a bit over 15-miles–not very impressive. The interior features an all-new steering wheel with a touchpad and a number of haptic buttons for controls. It also has the first application of a curved 16-inch display screen for the driver. And a first for customers–they’ll be able to choose from a standard version or a more sports-oriented model with race-inspired shocks, more carbon fiber and titanium parts and pieces, a different rear spoiler that creates more downforce and Michelin Pilot Sport Cup2 tires.

CHEVY ANNOUNCES ALL-NEW TRAILBLAZER FOR U.S.
Chevrolet may not be giving up on passenger cars, but it sure is going heavy with crossovers and SUVs. Right now it has 6 of those models in its line-up and it’s about to add another early next year. Meet the new Trailblazer which slots in between the Trax and Equinox. Chevrolet is not releasing any details at this time, but where it slots in suggests the base price will be about $22,600. It will also give Chevy two more crossovers than Ford, even after Ford comes out with the Bronco. One thing’s for sure, the Trailblazer sure looks a lot like the Blazer, and by the way it will be made in Korea.

BUICK CONFIRMS ENCORE GX FOR U.S.
Back in April, Buick unveiled a new, long-wheelbase version of the Encore, called the Encore GX. Now it confirmed the CUV will come to the U.S. market early next year. And it’s no wonder. Nearly 90% of all Buick’s sales in the U.S. come from its utility vehicles. The GX will slot between the current Encore and the Envision/Enclave. It’s said to have 5 more cubic feet of cargo space than the Encore and 3 less than the Envision.

LEXUS REFRESHES THE RX
Lexus took the wraps off the new RX and the three-row RXL. It’s styling has been refreshed with a sharper, more aggressive front-end but overall the look is similar to the current model. It comes standard with an 8-inch display screen but a 12.3-inch touchscreen is also available. It’s also the first Lexus model to offer Android Auto. The performance F Sport models now come with the latest active variable suspension system which is borrowed from the LC. A hybrid version is once again available which combines a 3.5L V6 with two electric motors. Fuel economy for the hybrid is estimated at 30 MPG combined and 29 MPG for the three-row model. The new RX goes into production in the third quarter of this year and pricing will be announced later.

Coming up next, John will be here to share some of his thoughts on the FCA-Renault merger. And he’s worried.

U.S. COULD CARRY BRUNT OF FCA & RENAULT MERGER
The FCA proposal to merge with Renault has me worried for the people in Auburn Hills, Michigan which is where Chrysler is headquartered. The merger will be a completely European deal, and there will be no American voice in the new structure, even though Chrysler generates most of the profits. FCA and Renault are in trouble in Europe. They claim that no one will lose their job with the merger, but they can’t make that promise for the long term. And when they start to look for synergies and efficiencies, they’re going to be mighty tempted to cut jobs at Chrysler. When Sergio Marchionne wrote his “Confessions of a Capital Junkie” one of the key areas he saw for cutting costs was eliminating all the overlap in powertrain. All the automakers make engines of the same or very similar displacement, and they make transmissions with the same number of gears. FCA and Renault will want to consolidate that, and I worry that they’ll start eliminating powertrain engineers at Chrysler. And it won’t stop there. The same goes for finance, HR, purchasing, and every other corporate function you can think of. They’ll also be tempted to get rid of Dodge and the Chrysler brand and feed that money into Alfa Romeo and Maserati, even though Maserati is in deep trouble, and Alfa has come nowhere near its promised potential. Also, Detroit is very lucky that FCA already announced it will build a new plant to make Jeeps in the city. Under the FCA-Renault merger, there will be enormous pressure to move manufacturing jobs to Europe. Look, it’s critically important for FCA to find a dance partner. I’m just worried that the U.S. side of the operation is going to carry the brunt of any cost cutting.

Have you ever heard of Yanfeng? It’s one of the world leaders in automotive interiors and on today’s Autoline After Hours we’ll be talking about future interiors for autonomous cars. If you have any questions of your own, send them to viewermail@autoline.tv, then make sure to tune in at 3PM eastern time when we go live.

But that’s it for today, thanks for watching and we’ll see you again tomorrow.