AD #3367 – Former UAW Leaders Serve Minimal Sentences; Tesla Posts Strong Q2 Earnings; Brembo’s Big Brake-Through

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

TESLA POSTS STRONG Q2 EARNINGS
Tesla was expected to have a tough quarter because its plant in Shanghai was either shut down or partially shut for much of that time. But Tesla still posted impressive financial results. It sold over 254,000 cars, which was down from the previous two quarters, but was up 27% compared to a year ago. The company brought in almost $17 billion in revenue–again, down from previous quarters, but up 41% from last year. And it posted a net income of $2.2 billion, which was double what it reported in the second quarter of 2021. Tesla also reported that it has the installed capacity to make 1.6 million vehicles. That means it already passed Subaru in global sales and will outsell Mazda before the year is over.

FORD LINES UP BATTERIES & RAW MATERIALS
Big EV news at Ford today. And it’s all about getting the raw materials and batteries needed to make electric vehicles. Here are the details:
– Ford has contracts in hand for 60 gigawatt hours of annual battery capacity to deliver a global 600,000 EV run rate by late 2023.
– The Mustang Mach-Es sold in North America get LFP batteries next year, while the F-150 Lightning gets them in early 2024. That creates more capacity to make those EVs.
– The company is on the path to get 70% of the battery capacity it needs to make 2 million+ EVs a year globally by 2026. It plans to localize 40 GWh per year of LFP capacity in North America in 2026. It has a new deal with CATL on strategic cooperation for global battery supply; and Ford will directly source raw materials for batteries in the U.S., Australia, Indonesia, and other countries as well. In other words, it will not source them from China. Even more impressively, Ford expects a compound annual growth rate for EVs to top 90% through 2026; more than double the forecasted global industry growth.

FORD TO CUT 8,000 JOBS
Meanwhile, Bloomberg reports that Ford is going to lay off 8,000 employees to cut costs as it pours more money into its EV efforts. Those layoffs are likely to start this summer and are expected in its salaried workforce as well as employees from its Ford Blue division, which runs all ICE operations.

UAW LEADERS HANDED “GET OUT OF JAIL” CARDS
Several UAW leaders who were convicted in the union’s corruption scandal have been freed from prison after serving only a fraction of their sentences. Six officials, including former presidents Gary Jones and Dennis Williams and former FCA VP Alphons Iacobelli were freed early. Jones was sentenced to 28 months in prison but served less than nine, Williams too only served nine months, even though he was sentenced to 21 in prison. The leaders are being freed under the First Step Act, which is a law designed to reduce the prison population. However, other UAW officials who were less culpable in the scandal, served or are still serving longer sentences. Understandably, prosecutors and UAW members are not pleased with the leaders serving a light sentence, after being convicted of stealing millions in union funds, taking bribes and breaking labor laws. The UAW is currently under federal oversight for the next six years because of the corruption.

U.S. POST OFFICE TO BUY A LOT MORE EVs
The U.S. Postal Service is once again changing its mind about its upcoming fleet of mail trucks. In February, it said it would buy up to 165,000 New Generation Delivery Vehicles from Oshkosh over the next 10 years and that 10% of the fleet would be electric. Then in March, after a lot of criticism, it committed to buying 50,000 of those ugly delivery trucks, 20% of which would be BEV. Now it says it will only buy 50,000 vehicles from Oshkosh, but will up the BEV ratio to 50%. It will also buy 34,500 commercial off-the-shelf vehicles, “because of the critical and immediate need to accelerate the replacement of our aging fleet…” Of the total 84,500 vehicles 40% will be BEV. That means many of those off-the-shelf vehicles will have some form of ICE powertrain, but presumably, will get much better fuel economy than the ICE Oshkosh vehicle, which is rumored to get only 8.6 miles to the gallon.

VW AND THAT 153 DAYS SUPPLY OF ID.4s
There were a lot of confused and some pretty ticked off people in the comments section after our report that Volkswagen has a 153 days supply of ID.4s. A lot of you just don’t believe the numbers. So, let’s get into more detail. We’re using data from Wards Intelligence, which reports the industry’s sales and inventory levels and has been doing it since 1924. In case you don’t know anything about Wards, the U.S. Department of Commerce even uses its data for all its econometric forecasting involving the automotive industry. So it’s the bible of the industry when it comes to this kind of data. And that inventory data includes vehicles that are in transit, not just those at the dealerships. In other words, it includes inventory at ports, on trains and on trucks. And here’s the key point. It’s the sales rate that determines the day’s supply. Wards says that in June, 2021 there were 3,249 ID.4’s in inventory, with a 35 day supply. Since then, ID.4 sales are down 30% for the year and down 75% in the month of June alone. In June, 2022 there were 3,493 ID.4’s in inventory and that works out to a 153 day supply. You may not like to hear that days’ supply number, but it’s all because sales are down.

BORIS SHULKIN OF MAGNA ON AAH
We’ve got a great Autoline After Hours coming up today with Boris Shulkin. He’s an Executive Vice President and the Chief Digital & Information Officer at Magna. And we’re going to get into the most promising technology that he sees coming. Craig Cole from EV Pulse will also be on the show. So join John and Gary to learn about the kind of technology that will soon be coming.

HONDA REVEALS “MOST POWERFUL” CIVIC TYPE R
After a lot of teasing Honda revealed the all-new Civic Type R. At the heart of this iconic car is a turbocharged 2.0L 4-cylinder engine, which is mated to an improved 6-speed manual transmission. Honda doesn’t say what kind of power it will make, but it’s the most powerful Type R in its 30 year history, so it has to be more than the last model, which produced 306 horsepower and 295 lb-ft of torque. Based on the 11th generation Civic Hatchback it’s longer, wider and lower and that helps improve vehicle stability and response. Unique touches to the Type R include a more aggressive front fascia with larger fender grilles, flared fenders, new side sill design, wider rear doors, reshaped rear bumper and a big spoiler. The interior is highlighted by red trim, carpet and seats, which are covered in a suede-like material that’s meant to reduce the body sliding around. The new Civic Type R launches in the U.S. this fall.

BREMBO’S BIG BRAKE-THROUGH
Brembo is developing a new braking system that may represent the biggest step forward in brakes since ABS came out 40 years ago. With today’s brakes, when you step on the brake pedal, all four brakes are activated simultaneously and with the same braking force. With the new Sensify system, the brakes at each wheel are controlled independently of each other. The result is smoother, more controllable braking, especially in emergency braking situations and even more so on wet or slippery surfaces.Brembo says it’s not a brake by wire system, but it kind of is. The brake pedal sends electronic signals to a brake control unit, or computer. And that in turn sends signals to hydraulic actuators that activate the brake pistons in the calipers. Or, the brake control unit sends signals to electromechanical pistons in the calipers. In other words, Sensify can operate on full hydraulics, or a combination of hydraulic and electric actuation, or have no hydraulics what so ever and just use electric actuation. This gives automakers a choice of which system they want, which will vary on what kind of vehicle it goes into. Brembo allowed us to test drive the system and it’s spectacular. Interestingly, it used Tesla dual motor Model 3s for the test, because Brembo thinks it has one of the best braking systems available. But as good as the Tesla system is, Brembo’s new Sensify system is clearly superior. We think that this will quickly make its way to every performance car, and over time, to every vehicle, just as ABS has. Brembo says it will go into production in 2024, but it will not say who will be the first to use it. We think it could well be Tesla.

But that’s a wrap for today. Thanks for tuning in.