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Runtime: 5:49
0:08 Europe Battles China Over Batteries
1:03 Audi Accused of Using Four Defeat Devices
1:39 Harald Krueger Quits BMW
2:34 U.S. Car Sales Up in June
3:10 Hyundai’s Stock Expected to Soar
3:46 Weekend Racing Results
4:35 RIP Lee Iacocca
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Autoline Daily is back from its summer break, and here’s what’s going on in the global automotive industry.
EUROPE BATTLES CHINA OVER BATTERIES
Europe is fighting back to make sure China doesn’t end up dominating the battery market for electric cars. The European Commission is creating a coalition of at least 260 European companies, which will pump more than $113 billion into a supply chain to build lithium-ion packs. Bloomberg NEF says Europe could account for 11% of global battery cell manufacturing capacity by 2025, up from 4% today. That would eat into China’s market share and put it on par with the U.S. European legislators worry that tens of thousands of workers making internal combustion engines and parts will lose their jobs as the industry transitions to EVs. So they’re building their own supply chain to protect those jobs.
AUDI ACCUSED OF USING FOUR DEFEAT DEVICES
Speaking of internal combustion engines, the German transport ministry says it identified four different emissions-defeat devices used in Audi’s 3.0L V6 diesel engine, which is also used by VW and Porsche. Wow, four is a lot! The software provides the vehicles with lower emission readings during government-mandated testing. But this goes beyond the cheating we knew about in the U.S. Audi kept on cheating all the way up to the beginning of last year.
HARALD KRUEGER QUITS BMW
BMW CEO Harald Krueger quit the company last Friday, two weeks before his contract was set to expire. The company was in good shape when he was named to the position four years ago, but in that time, Mercedes stole its luxury crown, its profits sank and most notably, the company’s EV strategy has been a flop. We think the board probably told Mr. Krueger his contract would not be renewed, so he quit before they would have to make that public.
U.S. CAR SALES UP IN JUNE
Auto analysts keep predicting that sales of new cars in the U.S. will go down, but consumers are not cooperating with their predictions. Wards reports that sales were up nearly 2% last month on a daily selling rate basis, as automakers sold 1.5 million new vehicles. So far this year sales are down by about 162,000 vehicles or just under 2%. And yet sales of passenger cars are down by 270,000 units, which goes to show just how much the market is switching to trucks.
HYUNDAI’S STOCK EXPECTED TO SOAR
Merrill Lynch is bullish on Hyundai. It says the stock should go up 27% over the next couple of years thanks to new models, better profit margins on those models and higher manufacturing capacity utilization. And it says Hyundai’s captive parts supplier, Mobis, is going to share in that growth. Yet, Merrill Lynch is not that bullish on Kia, even though it’s part of the Hyundai Group. It says Kia has a slower product cadence, already has plenty of crossovers, and it’s losing market share in the profitable Korean market.
WEEKEND RACING RESULTS
In racing news over the weekend, it was a perfect storm for NASCAR’s 20-year-old Justin Haley at Daytona. A rain-shortened race handed the Chevrolet driver his first-ever win in only his third career start. In IMSA, it’s been 7 years since Mazda reached the winner’s circle, but it now has consecutive 1-2 finishes with this weekend’s victory. And in NHRA drag racing, Steve Torrence took the top spot at the New England Nationals in the top fuel category.
RIP LEE IACOCCA
As you probably heard, while we were off last week we got news that Lee Iacocca passed away. He had a significant impact on the auto industry, having run both Ford and Chrysler. He was one of the most famous industry executives of the modern era, and played a role in introducing some of its most iconic products, including the Ford Mustang and Chrysler’s minivans. We all only get so much time living here on the planet, but Lee Iacocca sure made the most of the time he got. And we here at Autoline salute his contribution to the automotive industry.
Not only is Autoline Daily back, Autoline After Hours will resume its normal schedule this Thursday. So don’t forget to join me and Gary for some of the best insights on what’s going on behind the scenes in the automotive industry.
That wraps up today’s show, and while it was nice to have some time off, it sure is good to be back.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.