Listen to “AD #3485 – A Different Theory Why Tesla Cut Prices; What, a Mach-E Hearse?; Continental's Battery Impact Detector” on Spreaker.
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0:00 A Different Theory Why Tesla Cut Prices
1:23 EU Wants Its Own IRA
2:23 60% of Lincoln Dealers Agree to Sell EVs
3:45 Volvo Offers RWD for 1st Time in 25 Years
5:02 India Could be Huge EV Market
6:07 Aramco Could Join Geely/Renault ICE JV
7:28 What, a Mach-E Hearse?
8:00 Hertz Puts 25,000 EVs in EU
8:36 Continental’s Battery Impact Detector
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
A DIFFERENT THEORY WHY TESLA CUT PRICES
Tesla has been cutting prices in China and now XPeng will do the same thing. XPeng announced price cuts of more than $5,300 across its entire line, with the exception of its top model, the G9. Chinese automaker AITO, which is part of Huawei, also cut prices, so have others and more are expected to follow suit. Analysts say these price cuts are due to softening demand for EVs in China. And we agree. But something else might be going on. Here’s our Autoline Insight. Tesla has the highest profit margins in the auto industry, better than Mercedes-Benz. It can afford to cut prices, still be profitable, and force other automakers to cut prices too. But the others can’t really afford to cut prices. They still don’t have the scale that Tesla does and are losing money on their electric vehicles. And yet, if they don’t cut prices their sales will suffer. So we believe Tesla may be playing hardball to force its competitors to cut prices, which will make them lose money. And while Tesla may sacrifice some profit margin in the process, it still comes out ahead.
EU WANTS ITS OWN IRA
You’ve heard that old saying: Don’t get mad, get even. Well, that’s exactly what the European Union wants to do. It doesn’t care for the Inflation Reduction Act in the United States that gives generous subsidies to EVs and batteries that are made in North America. So, to get even, the EU wants its own massive subsidies for hydrogen, electric batteries, solar panels, and semiconductors that are made in Europe. Even so, the EU is still lobbying the Biden Administration to get exemptions for European EVs to qualify for IRA subsidies. And while the Biden Administration is sympathetic to them, there are powerful members of Congress, like Senator Joe Manchin, who are adamant that they mean what they say about “Made in the USA.” And if Europe is talking about enacting its own IRA, then Senators like Manchin will be less likely to compromise.
60% OF LINCOLN DEALERS AGREE TO SELL EVS
Two out of three ain’t bad, but Lincoln probably hoped for better. Lincoln wants to go all-electric by the end of the decade but only 60% of its dealers in the U.S. opted in to sell EVs. While that seems low, 90% of those 356 dealers that signed up are located in the top 130 markets in the U.S. And there is another enrollment period in 2026 for dealers that didn’t opt this time around. So they get a second chance. Dealers have to sign up for a certification program and the ones in the top 130 markets have to invest $900,000, while the dealers outside those cities have to invest $500,000.
VOLVO OFFERS RWD FOR 1ST TIME IN 25 YEARS
Volvo is offering rear-wheel drive for the first time in 25 years. It’s all part of some upgrades and enhancements being made to the all-electric C40 and XC40. The new rear drive models are powered by either a 175 kW or 185 kW permanent magnet electric motor, which were developed in-house by Volvo. Standard range versions retain a 69 kWh battery, but improvements to the cooling system increases range by about 35-40 kilometers or roughly 20-25 miles. A new 82 kWh battery provides up to 533 kilometers or 331 miles of range on the WLTP test cycle. The all-wheel drive versions of the C40 and XC40 also get the big, new battery and improved cooling system as well as in-house developed electric motors. Two 150 kW units have been switched out for one 182 kW permanent magnet e-motor in the rear and a 117 kW asynchronous motor in the front. Volvo says it hopes the changes will make the model more attractive to buyers.
INDIA COULD BE HUGE EV MARKET
You probably heard the news this morning that China is losing population. Meanwhile, India’s population is growing and it will probably surpass China this year. And with a population of 1.4 billion people, India offers huge potential for automakers, especially EVs. Indian automaker Tata, which owns Jaguar Land Rover, says it will launch 10 EVs in India by 2027. One will be a production version of this concept, the Sierra EV. It’s a compact that features an overall boxy design with large white panels set off with black accents, which gives it a bit of a rugged look. The interior is simple with a multi-layered dash that houses two digital display screens. Tata says it will also feature connected technology to enhance the user experience. But we don’t have any specs on it yet. The production version of the Sierra EV is expected to launch sometime in 2025.
ARAMCO TO JOIN GEELY-RENAULT ICE JV
Last year, Renault and Geely formed a partnership to combine their operations to make internal combustion engines. And now Reuters reports that Saudi oil producer Aramco could take a 20% stake in the company. The goal is to produce more than 5 million “low-emission and hybrid engines and transmissions” annually. Aramco says it will help fund development of decarbonization technologies for ICE engines as well as development of synthetic fuels and hydrogen technologies. But we all know that Aramco wants to keep selling oil to make fuel for IC engines. If the deal goes through we believe this would be the first time a major oil producer has invested directly into a car company.
WHAT, A MACH-E HEARSE?
The UK’s leading limo and hearse manufacturer is going electric. It showed off these converted Ford Mustang Mach-E’s and is already taking information from interested parties. They’re based on the rear-drive version of the Mach-E with the standard battery pack, which has 68 kWh of usable space. It normally provides 440 kilometers or 273 miles of range, but the hearse and limo drag that down to 200 miles or 321 kilometers.
HERTZ PUTS 25,000 EVS IN EU
Hertz and Uber are expanding their partnership to Europe. The companies announced that Hertz will make up to 25,000 electric vehicles available to Uber drivers in European cities by 2025. Hertz says a wide range of EVs will be offered to Uber drivers to rent, including Teslas and Polestars. The program will first roll out in London this month, followed by other cities throughout the year. Hertz already offers EVs to Uber drivers in North America and says more than 50,000 drivers have rented a Tesla through the program.
CONTINENTAL’S EV BATTERY IMPACT DETECTOR
EV batteries are one of the lowest points on a car and that makes them susceptible to damage from rocks and debris on the road. Automakers try to protect the battery pack with metal plates, but those add cost and weight. So Continental came up with a battery impact detection system. It has sensors in the bottom of the pack that can identify how severe an impact was and exactly where it happened, including the front and sides of the battery. That can trigger a fire suppression system, warn the driver, or take other actions. Interestingly, Continental uses the airbag control module to run the whole thing. And it says this could allow automakers to get rid of the metal protection plate under the battery.
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Seamus and Sean McElroy cover the latest news in the automotive industry for Autoline Daily.