AD #3282 – Cadillac Business Update; All OEMs Will Raise Car Prices Soon; China Policy Causing Production Stoppage

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

CHINA ZERO-COVID CAUSING PRODUCTION STOPPAGE
It sure looked like China had Covid under control, but now it looks like it’s getting out of hand. Yesterday we reported that Volkswagen and Toyota had to shut down plants because of Covid restrictions. Today it’s Tesla’s turn. Reuters reports that it’s suspending production in China for a couple of days. In Shanghai, where Tesla’s factory is located, authorities are telling residents to not leave their homes.

SHIPPING COSTS ARE SKYROCKETING
And those restrictions are wreaking havoc on the global supply chain. Shipping containers are starting to pile up at Chinese ports because of a shortage of truck drivers and warehouse workers. And that’s causing shipping container costs to skyrocket. Pre-covid, a 40-foot container traveling from China to the west coast of the U.S. cost under $2,000. Now it’s $16,000.

PREDICTION: ALL AUTOMAKERS WILL RAISE CAR PRICES SOON
And so the auto industry is sailing into a perfect storm. We’re seeing a wild mixture of catastrophes: Covid, the chip shortage, the Russian invasion of Ukraine, surging raw material prices, inflation, and rising interest rates. It’s forcing automakers to raise car prices. Tesla, Rivian and now BYD have boosted their prices, and so that leads us to make an easy prediction. They’re all going to do it. Even though car prices shot up the fastest in history over the last year, we expect every automaker in the world to raise its prices in the weeks to come.

CADILLAC BUSINESS UPDATE
Cadillac provided a business update of how it’s doing and here are the key takeaways.

• Cadillac sold 374,000 cars globally last year, close to its all time record.
• The hand-built Celstiq will debut next year and will be the first to offer Ultra Cruise, the next step up from Super Cruise.
• 30% of its US dealers dropped their Cadillac franchise rather than sell EVs.
• You’ll be able to buy electric Cadillacs on your phone or online rather than go to a dealer.
• The Lyriq starts production next Monday in Spring Hill, Tennessee and goes on sale May 19.
• Cadillac claims it has 233,000 hand-raisers for the Lyriq and says 10% of them typically turn into buyers, but it expects even more orders to come in.

GLOBAL SAAR DOWN 20 MILLION VEHICLES
Last week we reported that the SAAR, or seasonally adjusted sales rate, in the American market slowed down in February. It dropped to only 14 million vehicles. Well, it looks like the slowdown is happening all over the world. Global sales peaked in 2017 when they hit about 97 million vehicles. Now, LMC Automotive reports that last month the annualized rate dropped to only 77 million. And it’s not just because of the chip shortage. LMC says it’s because the global economic situation is deteriorating.

HONDA, GM, NISSAN MAKE EPA LIST OF MOST EFFICIENT PLANTS
The EPA released its list of the most energy efficient manufacturing plants in the US, and Honda, General Motors and Nissan made the list. Honda has 8 plants that cut how much energy they use. GM and Nissan both have 2 plants that made the list. When you include these plants, plus all the other 93 plants that made the list, the EPA says they reduced their energy consumption by 90 trillion BTUs. That cut their energy bills by $7 billion last year, and prevented 5 million tons of greenhouse gasses going into the atmosphere.

XPENG TAKES VTOL TO EUROPE
Flying cars just took another step forward. HT Aero, which is a subsidiary of the Chinese EV startup XPeng, is going to show off its VTOL in Europe. The carbon fiber, all-electric, vertical takeoff or landing vehicle weighs about 1,200 pounds and can carry two people with a maximum payload of 440 pounds. It has a top speed of 80 miles an hour, can fly for 35 minutes, and is designed to fly under 1000 meters or about 3200 feet.

LYNK & CO OPENS METAVERSE SHOWROOM
The hottest topic in the tech world right now is the metaverse, and the Chinese automaker Lynk & Co is the first to open a virtual showroom there. It’s in a place called XiRang, which is the metaverse created by China’s giant tech firm Baidu. The showroom features 6 models including ICE, electrified and performance models. Visitors can check out different body colors, open and close the doors and trunk, and feel the interiors. They can also hold virtual meetings, network, and watch virtual entertainment. Next, Lynk & Co wants to host car shows, new model launches, and virtual test drives. So what do you think? Are you ready to start shopping for cars in the metaverse? We’d love to hear your thoughts.

YOU SAID IT!
And now it’s time for You Said It! Yesterday we reported that the NADA says car dealers are “all in” when it comes to selling EVs. So we asked you to share your experiences with buying an EV from a traditional dealer, and we sure got an earful. Here’s a good sample of some of your feedback, which we had to edit, but only to fit it all in.

Philip Lasco said, “I purchased a Mach-E from a traditional dealer. Transaction was professional and friendly.”

DeLorean4: “I was in the market for an EV or compact car back in 2017. The buying experience was absolutely awful; no knowledge nor inventory of EVs.”

Cesar Trujillo: “Our sales person who has been at Mercedes many decades told us that the tax incentive ended last year. He was clueless.”

James Hoffman: “I’ve never had a positive experience buying a new car from a dealer (none were EVs), and have only had positive experiences taking delivery of Teslas.”

Naarealy: “I got frustrated because dealers refused to give clear pricing. I ended up just ordering another Tesla from the comfort of my couch.”

T Bone: “Purchased an EV in 2020, dealer had no one trained on them. Had to educate the salesman on its operation.”

Alexandre Vilar: “I bought an electric Mini Cooper from a traditional car dealer. I’m from French speaking Switzerland. Test drove it even. Great advising, well organized. But had to wait for inventory build-up before having delivery. It was literally the sole inventory car they had.”

Lee’s Channel: “I pre-ordered a Mach-E through the Ford website. They kept me there for 4 hours waiting, filling out surveys, etc., just so they could push a 3rd party warranty. I paid cash in full for a pre-order, there is no reason why it should have taken more than 10 minutes to complete the transaction.”

Liam Ball: “Bought a Nissan Leaf from a dealer. Terrible experience! Bought a BMW i3 from Portland BMW – fantastic experience. Bought a Tesla from the app. Awesome exp.”

Nebula 1701: “I got all three of my Volts from Bowman Chevy here in Michigan. They have always been very supportive of EV adoption and knowledgeable.”

BroManz: “Bought my VW eGolf in 2019 they had no f***** clue about the car… then I got my tesla model 3.” (Followed by smiling emojis with sunglasses)

Dan Mancas: “I bought an EQS from a dealer but I made all communication and papers by whatsapp. I met the dealer în person only when I received the car.”

Barry Hamilton: “In Feb 2020 we bought a Chevy Bolt in Glenwood Springs, CO. Dealer was/is committed to EVs, had good selection, knowledgeable & deep discounts.”

So there you go. It’s a mixed bag of people who had bad dealer experiences, some who had good ones, and everyone seems to like the way Tesla does it. I hope the National Auto Dealers Association takes a moment to read your responses.

And that brings us to the end of today’s report, thanks for watching.