AD #3550 – Tesla Earnings Healthy, But Down Sharply; CATL’s New 500 Wh/Kg Battery; What? A Mustang Raptor?

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

TESLA EARNINGS HEALTHY, BUT DOWN SHARPLY
Tesla reported its first quarter earnings and they really show the impact of all those price cuts. Tesla sold over 422,000 vehicles, which was up a healthy 36%, but that was down significantly from the 50% increases we’ve come to expect. Revenue hit $23.3 billion, up 24% from a year ago, but its operating profit of $2.6 billion was down 26%, and its net profit of $2.5 billion was down 24%. Its operating margin fell to 11.4% which is healthy, but is no longer the best in the industry. Free cash flow dropped 86%. Tesla says it ended the quarter with a 15 days supply of vehicles, which is low, but that’s a 400% increase from a year ago. Elon Musk says they’re going to concentrate more on growing sales than on growing profits and the stock dropped 2% on the news.

TESLA FACING TOUGHER COMPETITION
Here’s our Autoline Insight. These numbers show that the EV segment is getting to be a lot more competitive. And while Tesla is ready to play hardball, it doesn’t have a choice. It has to cut prices to maintain its strong growth rate. That’s not going to please investors, but it’s probably a good long-term strategy–at least until it can add more products to its lineup, and until it can develop its new assembly process that can slash costs significantly.

WHAT’S ON THAT CYBERTRUCK?
One more item before we leave Tesla. The company always likes to tease us with some pictures in its quarterly reports. Take a look at this shot of the pilot line for the Cybertruck. It clearly shows gigacastings used on the front and rear of the truck. In fact, the rear casting looks huge. But notice the big cylinder that the line worker is carrying. What the heck is that? We think it’s probably part of an air suspension system for the Cybertruck, but we don’t know for sure. And we’d sure like to hear your opinions of what it might be.

CATL’S 500 Wh/Kg BATTERY
The world’s largest battery maker keeps making it harder for the competition to catch up. At the Shanghai auto show, CATL introduced a new battery, what it calls a condensed matter battery, that is perfect for applications that need high energy demand, like an all-electric passenger airplane. It’s a semi-solid state battery with a condensed electrolyte as well as new anode and separator materials. CATL says it offers an energy density of up to 500 Wh/kg, which is nearly double the energy density of its current cell-to-pack Qilin batteries, which are only just making their way into vehicles right now. But CATL says it will make these condensed matter batteries for cars before it makes them for planes, and mass production will start before the end of the year.

NEW LINCOLN NAUTILUS COSTS A LOT MORE
That new Lincoln Nautilus we showed you on Tuesday is going to cost a whole lot more than the one it replaces. It starts just under $52,000 including destination charges in the U.S., which is about $5,600 more than before. And the top Black Label trim line with all the options tops out around $82,400. The big price increase isn’t too surprising since it now comes standard with all-wheel drive and more features. But it’s also because it will be hit with a 27.5% import tariff in the U.S. since it will be built in China and then imported to the U.S. For comparison, vehicles from other countries only face a 2.5% import tariff. Deliveries of the new Nautilus begin early next year.

HYUNDAI PLUNGES AHEAD WITH LUNAR ROVER
We were amused when the Hyundai Group announced last year that it was developing a lunar rover. We thought it would just be a cool design exercise. But now Hyundai is actually building a prototype. The autonomous vehicle is designed to explore the moon and will be equipped with advanced technologies to help handle a variety of payloads. Hyundai says it expects to complete the initial test next year and it’s aiming to have a fully functional model by 2027.

WHAT? A MUSTANG RAPTOR?
The Ford Mustang has conquered just about everything you can on pavement and now Car and Driver reports the pony car is going to go off the beaten path. It says Ford is developing an off-road version of the Mustang and will call it the Mustang Raptor. It’s similar to what Porsche has done with the 911 and Lamborghini with the Huracan. The Mustang Raptor would be powered by Ford’s 5.0L Coyote V8 tuned to 500 horsepower and paired with a 10-speed automatic transmission and an electronically controlled center differential. Other goodies are said to include a 2-inch lift kit, Fox Live Valve dampers, underbody skid plates and all-terrain tires. The off-road Mustang is expected to arrive in 2026 with a price around $90,000. And that it would be followed by a 700 horsepower Raptor R version.

FORD SHIPPING LIGHTNINGS TO NORWAY
Will Europeans really buy full-size American pickup trucks? We’re about to find out. Ford is going to start shipping F-150 Lightnings to Norway. It will be offered exclusively in the Super Crew Cab body style with blue metallic paint and only in limited numbers. Ford didn’t reveal pricing but deliveries start next year. Ford already sells the Mustang Mach-E in Norway which is kind of a jab at General Motors. Remember that Super Bowl ad GM ran two years ago called “No Way Norway” with comedian Will Ferrell? GM implied it was going to return to the European market but now Ford has two EVs on sale in Norway while GM is nowhere to be seen.

HONDA CIVIC R SMASHES FWD LAP RECORD
When front wheel drive became popular in the late 1970’s and early ‘80’s some engineering experts said you would never be able to have a front wheel drive car with more than 150 horsepower. They said that anything more than that would overwhelm the car with uncontrollable torque steer. Well, that was then. Honda just smashed the lap record for front wheel drive cars at the Nurburgring with the all-new Civic Type R. It set a time of just under 7 minutes and 45 seconds. And the only change to the car was a set of Michelin Pilot Sport Cup 2 Connect tires, which any owner can order from a Honda dealer. Honda stole the record from the Renault Megane RS Trophy-R, which stole the record from the previous-generation Civic Type R. The new Civic also holds the FWD lap record at Suzuka in Japan.

AAH COVERS SHANGHAI & TOYOTA NEW EV BUSINESS UNIT
Auto shows aren’t what they used to be. Most automakers have pulled out of them, and the most famous shows in Frankfurt and Geneva don’t even exist anymore. But there is one auto show that is as big and bold as they ever used to be: the Shanghai auto show. It’s been going on this week and that’s going to be one of the topics on Autoline After Hours this afternoon. Tu Le, from Sino Auto Insights, will be back by popular demand to talk about the most important cars that were revealed at the show. And Jeff Stout from Yanfeng will also be coming on. He’s one of the most insightful and fun guests we’ve ever had. John wants to talk about the new EV business unit that Toyota is scrambling to get going, and we invite all of you to tune in when John and Gary get it all going at 3 pm eastern time later today.

But that brings us to the end of today’s show. Thanks for joining us.