AD #3352 – EV Raw Material Costs = 2X ICE; $4,500 Union EV Incentive Officially Dead; Ford’s 2,000 HP Transit Van

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

TESLA LOSES BILLION$ ON NEW PLANTS, OF COURSE
Elon Musk says Tesla is losing billions of dollars on its new assembly plants in Austin and Berlin. But as anyone in the auto industry knows, that’s true of every single new assembly plant. They don’t start making money until they get up to full line speed and really start cranking out vehicles. And Tesla’s newest assembly plants probably won’t get up to full line speed until sometime next year. There’s a general rule of thumb in the industry that assembly plants don’t start to make money until they hit 80% of capacity utilization. But once they do hit that point, they become money machines.

MUSK SAYS TESLA MAY START ADVERTISING
In an interview with the Tesla Owners Silicon Valley club, Elon Musk also said that Tesla is considering running ads to counteract a bias that he sees in the media against him and Tesla. Up to now Musk has famously bragged that Tesla will never spend money on advertising. But Tesla got rid of its Public Relations office several years ago and rarely responds to requests from the media for comments or clarifications. And that leaves a void in the media’s reporting. So when you don’t tell the media your side of the story, it inevitably leads to reporting that will appear to be one-sided. And that’s true whether you’re talking about business, politics or the entertainment industry.

RAW MATERIAL COSTS FOR EV = 2X ICE
Some interesting data from AlixPartners about the transition to electric vehicles. EVs accounted for less than 8% of global sales last year but that will ramp up to 33% by 2028 and 54% by 2035. To help meet that demand, automakers will invest $526 billion on EVs and batteries between now and 2026. AlixPartners says the industry faces a big challenge transitioning from ICEs to EVs. As of May, raw material costs for EVs is $8,225 per vehicle. That’s twice as much as ICE vehicles at $3,662. And it will cost OEMs and suppliers $70 billion to make the ICE to EV switch. As for overall vehicle sales, it’s still going to be a couple of years before they recover from parts shortages. AlixPartners estimates global sales will reach 79 million this year before rebounding to 95 million in 2024.

 

$4,500 UNION EV INCENTIVE OFFICIALLY DEAD
That extra $4,500 tax credit for electric vehicles made by union workers? It’s officially dead. In an interview with Bloomberg, West Virginia Senator Joe Manchin said that union incentive is off the table. It was going to be part of the climate package being negotiated with other Democrats. The policy would have given EV buyers the extra incentive on top of the $7,500 tax credit currently available. It also would lift the 200,000 sales cap for OEMs and at the moment that portion is still on the table. It’s not too surprising the extra incentive is dead, Tesla and the transplant automakers have publicly criticized the proposal and so did Canada and Mexico, which were worried it would harm their auto industries.

INDYCAR EATS UP 25,000 FIRESTONES A YEAR
Take a moment, pause the video if you have to, and think about the number of tires you’ve gone through in your life. No matter how high the number, I bet, it pales in comparison to how many racecar drivers go through. As the sole supplier for IndyCar, Firestone produces more than 25,000 tires every year for the racing series. That’s for 17 races, including testing and qualifying, but still a lot of tires. It will also become sole provider for the Indy Lights Series next year, so parent company Bridgestone expanded its tire plant in Akron, Ohio. The $21 million investment will allow it to make all of its race tires and small batches of specialty tires for both racing and on-road vehicles. 

FORD’S 2,000 HP TRANSIT VAN
Like the Mustang Mach-E 1400, Ford once again took its newest electric vehicle and made it the ultimate tire burner. But the Ford Pro Electric SuperVan, which is inspired by the E-Transit Custom, doesn’t have a paltry 1,400 HP. No, it has nearly 2,000. It all comes from 4 electric motors that provide a sub-2 second 0-100 km/h time. It also features race-spec suspension and brakes. I think it’s really interesting how the side panels, where the rear windows might be, are folded in and brought together, which creates like a little boattail, but must drastically improve aero as well. The SuperVan is on display now at the Goodwood Festival of Speed.

CADILLAC CELESTIQ INTERIOR TEASERS
I can’t believe I’m saying this, but we might have to revise our price estimate for the new Cadillac Celestiq again. We originally thought it would be priced above $200,000, but now we think that estimate is too low. Just look at the detail in these new teaser shots. It’s especially true of the seats that look like they have a ton of adjustment as well as a unique V-shaped pattern with multiple materials and we’d guess that the brushed aluminum section below the headrest is a neck warmer and cooler. The center console is also styled in several different materials and also features a small display screen that likely controls the HVAC and/or infotainment. The Celestiq is scheduled to debut late next month. And we’re curious. What do you think it will cost?

INFINITI STARTS FREE MAINTENANCE PROGRAM
Infiniti is launching a maintenance program for new car buyers that’s included on all 2023 model year purchases sold in the U.S., including leases. Owners get 3-years of free inspections, oil changes, tire rotations, tire road hazard assistance and more. While this is great for customers, automakers only do deals like this to get on shopping lists. And it’s easy to see why Infiniti wants to do that, its sales are lagging far behind its competitors. Last year, it sold just about 58,500 vehicles in the U.S. That’s nearly 100,000 fewer cars than Acura. While BMW and Lexus sold more than 300,000 vehicles.

 

HONDA CR-V INTERIOR TEASER
Honda recently teased the front and rear end styling of the new CR-V and now it’s giving us a look at the interior. As you can see, the center display screen sits on top of the dash, instead of being integrated. And the dashboard itself is more streamlined and not curvy like before. The shift knob is now a bit off center with the buttons around the shifter placed near the driver. Honda hasn’t released any specifics about the new CR-V but we’ll learn more when it debuts on July 12.

CATL QILIN BATTERY BOASTS FAST CHARGE TIME 
We’re getting more information about the latest battery design from CATL. As we’ve reported before, the new design is called Qilin and boosts the energy density to 255 watt hours per kilogram. That’s reportedly about the same as Tesla’s 2170 batteries, but below the 276 wh/kg of its latest 4680 batteries. CATL’s cell-to-pack design also achieves a volume utilization of 72%, which it claims is the best in the world. A real big benefit is that it says the battery pack will go from a 10% to 80% charge in only 10 minutes with a fast charger. One reason is that it uses liquid cooling passages between the battery cells, and not on the bottoms of the cells as it previously did. The Qilin packs will go into production next year. 

AAH: ARE CLAY MODELS NECESSARY?
Do car designers really need to use clay models? That’s the topic on Autoline After Hours later today. When Lynk & Co unveiled its newest concept car, called The Next Day, it also revealed that it did not use a clay model to save development time. It was completely designed in the digital world. So is that the future for automotive design? To get to the bottom of that we’ve got Doug Grieg, the CEO of a company called Tarus that makes 5-axis milling machines for clay models. We’ve got the designer John Manoogian joining us as well. And you can sit in on the discussion on our website or YouTube channel.

But that brings us to the end of today’s show. Please like, comment or subscribe.