AD #3498 – BYD’s EVs Outsell Tesla in China; Ford Back in F1 With Red Bull; Chinese OEM Building Cars in Russia

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

FARLEY FRUSTRATED WITH FORD EARNINGS
A couple of days ago General Motors presented its earnings from last year that won instant accolades from Wall Street analysts. Yesterday, Ford presented its earnings and Wall Street was not at all impressed. There is some good news in the numbers. Ford sold 4.2 million vehicles last year, up 7%, and that brought in $158 billion in revenue, up 16%. And it posted a $6.2 billion operating profit. But then things went south. It lost $7.4 billion on its investment in Rivian, and wrote off $2.8 billion of its investment in Argo AI, the autonomous car company. Recalls, warranty costs, the chip shortage and other supply chain problems were also a drag on earnings, and Ford posted a nearly $2 billion net loss for the year. CEO Jim Farley said he was frustrated by the results and vowed to do a lot better this year.

FORD BACK IN F1 WITH RED BULL
Maybe to take our attention away from the poor numbers, Ford announced this morning that it’s returning to Formula One with Red Bull Racing. Starting in 2026 Ford will co-develop hybrid engines that run on low carbon fuels along with Red Bull. Its sister team, Alpha Tauri, will also use them. Ford will specifically develop battery cells and a 350kW electric motor as well as power unit control software and analytics. This gives Ford a leg up on crosstown rival General Motors, which announced it wants to get into F1 with Andretti Motorsport. But Andretti is struggling to get F1 to allow a new team to enter the series. 

FERRARI POSTS RECORD EARNINGS
Meanwhile, at Ferrari, they’re popping the champagne corks, but not because Ford is getting into F1. 2022 was a wildly successful year for the prancing horse. It sold a record 13,221 cars, up 19%, powered by the Portofino M and the SF90 Stradale and Spider. The company brought in €5 billion in revenue, also up 19% and dropped €939 million of that to the bottom line, giving it an impressive 18% net margin. Ferrari’s sales were up all over the world, up 8% in Europe, up 22% in the US, and up 73% in China. Benedetto Vigna, Ferrari CEO, says they expect to do even better this year.

BYD’S EVs OUTSELL TESLA IN CHINA
Tesla’s price cuts in China are paying off, but they might not be enough–not if it wants to be #1 in EV sales. Tesla sold 66,000 cars in China last month, up 10% compared to a year ago. But BYD sold over 71,000 pure EVs, up 53%. BYD has a more comprehensive lineup of vehicles with fresher styling than Tesla offers. But Tesla is going to crank up production a lot more in China over the next couple of months, so the race is on and it’s going to be a battle royale to see who can sell the most EVs in the world’s biggest car market.

ALFA’S PLANS FOR NEW MODELS
Alfa Romeo sold less than 13,000 vehicles in the U.S. last year, but it’s planning to introduce more models in hopes of turning sales around. According to the head of Alfa in North America, Larry Dominique, the brand will have 5 key models in the region. Two will fit into the C-segment, two are D-sized and one is an E-segment vehicle. One of those C-segment vehicles is the Tonale, while Dominique says the other will be more car-like than the Tonale. The Stelvio and Giulia fit into the D-segment, but we’re unsure if they’ll stick around. Alfa previously said the Tonale will be the last vehicle it develops with an IC engine and from 2025 onwards all models will be BEV. There’s no details on the larger vehicle that will go above the Stelvio and Giulia; Alfa doesn’t currently have anything like it in its lineup. 

SNEAK PEEK AT ZEEKR’S SLEEK X
Geely’s premium EV brand, Zeekr, is going to enter the European market this year and is showing off a new vehicle that seems more right-sized for its roads. It revealed the Zeekr X, which rides on Geely’s SEA platform and is roughly the size of a Mini Countryman. Geely’s SEA platform is also used by the smart brand and Lotus and eventually Volvo and Polestar. Other models that ride on this platform have both rear- and all-wheel drive capability and Zeekr says a performance version of the X will be able to do 0-100 km/h in 3 seconds. The only real family resemblance we see compared to Zeekr’s other models is in the headlight design, otherwise, the Zeekr X has much more angular body surfacing. Price is expected to be around $30,000 and sales kick off in China in the second quarter, followed by Europe.

SOFTWARE DETECTS LOOSE LUG NUTS
Early tire pressure monitoring systems detected a low tire by using the wheel speed signal. A tire with low pressure turns at a different rate of speed than a properly inflated tire and that difference in speed would trigger a low tire warning light. Now a company called NIRA Dynamics is applying a similar philosophy to detect a loose wheel. It’s able to detect differences by recording the energy levels generated through the ABS tone ring. As you can see in this chart, a loose wheel, highlighted in green, has a higher energy level than a properly secured wheel. One of the best parts of this system is that it doesn’t require any extra hardware. NIRA Dynamics says it can detect a loose wheel before it ever falls off and just launched the system in China on the Zeekr 009.

CHINESE OEM BUILDING CARS IN RUSSIA
When all the Western auto companies skedaddled out of Russia after it invaded Ukraine, Chinese automakers rushed in to fill the void. Now, Kaiyi Auto, which is part of Chery, just started building its E5 sedan in Russia this week in cooperation with Russian automaker Avtotor, which previously assembled cars for BMW, Hyundai and Kia. The Kaiyi E5 will officially go on sale in the first quarter of this year and the company says it will also be sold in Eastern Europe. That must be an inside joke because every Eastern European country put up trade sanctions against Russia after its invasion. Of course, there is one Eastern European country that is still pals with Putin, and that’s Belarus. So the E5 will be sold in Russia and Belarus, but we think that’s it. Look for more Chinese companies to make cars in Russia. Avtotor has agreements with two other Chinese automakers.

GM GETS EVs ON NETFLIX SHOWS
General Motors is turning to Netflix to get more exposure for its electric vehicles. The two of them formed a partnership to showcase GM’s EVs in some of the streamer’s TV shows and movies. Over the next year, the Chevy Bolt, GMC Hummer EV and the Cadillac Lyriq will be featured “where relevant.” And to get the word out, the two companies will air a commercial during the Super Bowl with comedian Will Ferrell, which will showcase how the EVs will show up on Netfilx. The GM must really like Will Ferrell. Two years ago, they used him in a Super Bowl ad called “No Way Norway.”

THE RICH ARE NOT BRAND LOYAL
High income car buyers aren’t very loyal when it comes to car brands. That’s according to a study from McKinsey. It surveyed 351 owners from around the world who earn at least $400,000 and more. McKinsey defines a luxury vehicle as one that costs over $200,000. It found that 95% of luxury buyers are ready to switch brands and that 44% of owners who own an ICE vehicle, are ready to switch to a pure EV. McKinsey says the luxury segment will outgrow the rest of the industry until 2030 and EVs will make up 50-60% of the segment.

But that’s all we’ve got for today. I hope you have a great weekend.