AD #3297 – Chinese Refineries Shun Russian Oil; VW to Drop Models, Move Upscale; Mercedes Intros Electric Turbo

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

CHINESE REFINERIES SHUN RUSSIAN OIL
Here’s something we didn’t expect to see. Chinese oil refineries are refusing to refine Russian oil. And that could have a big impact on prices of gasoline at the pump. Reuters reports that China’s government-owned refineries will not take on new contracts to process Russian oil. They’ll fulfill existing contracts but won’t sign new ones, despite the fact that Russia is offering deep discounts. The Chinese refineries are afraid of getting slammed with sanctions if it looks like they’re helping Russia. But if Russia is cut off from most of the market and China turns to other sources to buy oil, gasoline prices will not be coming down anytime soon.

RUSSIAN ASSEMBLY PLANTS GRIND TO A HALT
Meanwhile car production in Russia is grinding to a halt and thousands of workers are losing their jobs. One city called Kaluga, which is about 120 miles away from Moscow, has been especially hit hard. It has assembly plants for Volkswagen, Volvo and a joint venture between Stellantis and Mitsubishi. About 7,000 autoworkers there are now out of work. Many of them seem to be naive about the global backlash over Russia’s invasion of Ukraine. Reuters quotes one marketing executive at a VW dealership as saying she hopes everything will soon get back to normal.

VW TO DROP MODELS, GO UPSCALE
Should Volkswagen change its name? As you know, Volkswagen means “people’s car.” But now it sounds like it’s going to be the car for people with high income. The company’s finance chief says VW is going to start selling fewer vehicles, and will concentrate on premium vehicles that bring in higher profits. To get there, it’s going to slash the number of models and trim lines it offers. VW plans to get rid of 60% of its gas and diesel vehicles across all its brands over the next 8 years in Europe. Instead of volume and market share, it’s going after margins. As we pointed out in our comparison of R&D spending between car companies, VW spends more on new model development than any other car company. It spent over $17 billion last year, or about the same as Toyota and General Motors put together.

MERCEDES BRINGS OUT ELECTRIC TURBO
Mercedes is showing that there’s still a lot of life left in the internal combustion engine. This is the new entry-level version of the Mercedes-AMG SL, the SL 43. While we’ve shown you the new SL in the past, there’s something a bit special with this model. And like most AMG’s it’s got to do with what’s under the hood. In this case it’s a 2.0L turbocharged 4-cylinder. Doesn’t sound all that special, but this engine features something no other production car in the world has, according to Mercedes, an electric turbocharger. It’s tech that Mercedes developed over the years in Formula 1 and will now use in a production vehicle. The electric motor is mounted between the intake and exhaust side of the turbocharger and uses a 48-volt electrical system to spool up before the exhaust gasses start to drive the compressor wheel. This gets rid of ‘turbo lag’ and allows for more torque at lower revs, as well as the ability to hold boost even when off the gas, so there’s an immediate response when you get back on it again. The setup produces over 380 horsepower, which is really impressive for a 4-cylinder production car. It’s all fed through a 9-speed automatic that sends power to the rear wheels and drives this convertible from 0-100 km/h in 4.9 seconds.

CATL OPENS BATTERY PLANT IN GERMANY
Big news in Germany today as Chinese battery maker CATL is getting set to open its first cell manufacturing plant outside of China. CATL broke ground on the $2 billion plant in 2019 and is now in the final stages of construction. While it can begin cell production, it still needs approval for another building to assemble the cells into modules. Once it’s all up and running, the plant will produce 14 GWh annually.

NHTSA INVESTIGATES LG BATTERIES
And in other battery maker news, LG Energy Solution is being investigated by NHTSA over battery defects that can lead to fire risks. The probe includes GM’s Chevy Bolt recall but NHTSA cited 5 other recalls from smart, Hyundai, Volkswagen and Stellantis that it is looking into. NHTSA wants to notify other automakers that use LG batteries about any potential defects and have them issue a recall if necessary. LG says it’s fully cooperating with the investigation.

AIWAYS UNVEILS EV CONCEPT CAR
NIO isn’t the only Chinese EV startup selling vehicles in Europe. A company called Aiways offers the U5 SUV and it will soon launch a new model, called the U6. Its design is previewed here with a concept, called the U6ion, which is said to be pretty close to the production model. It features a coupe-like silhouette, a shark-nose front end like so many other electric SUVs and a yoke steering wheel. In a quick search we weren’t able to find many details on the model, but the U6 is expected to come out in the third quarter of this year, so we should learn more soon.

CANOO GETS NASA CONTRACT
EV startup Canoo is struggling. It’s under SEC investigation and more than 50 employees have left the company this year. But it just got a bit of a boost. Bloomberg reports that NASA is picking it to build a vehicle to transport astronauts to the launchpad for upcoming missions. The contract is worth nearly $150,000 and Canoo will make at least one vehicle. NASA requested that it be zero emissions, have a range of at least 50 miles and seat up to 8 people. The vehicle is scheduled to be delivered in June 2023 and will be used for Artemis missions that start in 2024.

COMAU’S NEW ROBOT LINE
Did you know that Stellantis owns a robotics company? Most people don’t. It’s called Comau and it makes all kinds of industrial equipment. It just came out with a new robot, called the N-220, that can lift up to 450 pounds and with 6-axis articulation, it can move that load in any direction. Strangely, Stellantis never talks about Comau. The company is not even mentioned in the latest annual report. And that makes us wonder if Carlos Tavares, the CEO of Stellantis, is thinking about selling the operation. If he can find a buyer that money could be invested on the car and truck side of the business as it transitions to electric.

SHYFT GROUP ON AUTOLINE AFTER HOURS
Have you ever heard of the Shyft Group? You’ve probably seen their trucks and didn’t even know it. Shyft is a specialty manufacturer that makes trucks for specific applications, everything from service and delivery trucks to the chassis’ for motorhomes. And now it’s coming out with an electric van, called Blue Arc, with a 150 mile range. We’ve got Daryl Adams, the CEO of the Shyft Group coming on Autoline After Hours tomorrow to talk all about it. And don’t forget, we have Mark Reuss, the president of General Motors coming on next week to talk all about GM’s EV strategy. We’re going to devote part of that show to viewer questions, and we’ve already started compiling the list. So if you’ve got a question you’d like to pose to Mark Reuss about GM’s EV plans, post it in the comments section or send an email to viewermail@autoline.tv

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