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0:00 VW’s Q1 Profits Plummet
0:58 VW Cleans House at Cariad
1:36 Lamborghini Sets All-Time Records
2:18 EV Sales Jumping in Germany
3:05 GM Sticks with Indiana For Battery Plant
3:59 China EV Market Getting Saturated
5:29 Baojun Yep Gets EV Pickup Variant
6:27 Daimler Updates EV Bus
7:32 BYD To Manufacture in Vietnam
8:04 Vietnam Massively Boosts Rare Earth Production
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
VW’s Q1 PROFITS PLUMMET
Volkswagen’s profits plummeted in the first quarter as expenses shot up and payments from its Chinese subsidiaries dropped by 20%. The top line numbers all look good. The Volkswagen Group sold 2 million vehicles worldwide in the first three months of the year, up by more than 7% and its revenue shot up 21% to €76 billion. But the bottom line numbers were well off where they were a year ago. VW’s operating profit of €5.7 billion was down 31% and its net profit of €4.7 billion was down 30%. That was mainly due to a 48% drop in profits at Audi, and a 34% drop from financial services.
VW CLEANS HOUSE AT CARIAD
Volkswagen is firing all but one of its top executives at its Cariad software division, which has been a disaster. It has run into all kinds of development issues, which caused new models to get delayed and it’s losing money. In the first quarter, it lost 429 million euros. Reuters reports that VW will name Bentley’s head of production, Peter Bosch, as Cariad’s new leader. No doubt some of you will question why you would put a manufacturing guy in charge of software development.
LAMBORGHINI SETS ALL-TIME RECORDS
VW also owns Lamborghini, which reports its own earnings, and Lambo is having the time of its life. It sold 2,623 cars, an all-time record. Revenue hit €728 million and it posted an operating profit of €260 million. Not only are those all-time records, Lambo’s operating profit margin hit almost 38% which is a stunningly good number. To top it all off, Lamborghini’s production is completely sold out until the end of 2024.
EV SALES JUMPING IN GERMANY
EV sales are jumping in Germany. They shot up 34% in April, with German car buyers buying nearly 30,000 BEVs, which accounted for 14.7% of all new car sales. The market leaders were the Volkswagen brand with over 5,000 EVs, Tesla with around 2,400, Mercedes 2,320, Audi with 1,875 and BMW with 1,823. Meanwhile, sales of PHEVs dropped 45% to fewer than 12,000 cars for all brands.
GM STICKS WITH INDIANA FOR BATTERY PLANT
It looks like General Motors will still build its fourth U.S. battery plant in New Carlisle, Indiana. GM was originally going to open the plant with LG Energy Solution but that deal fell apart in January. Last month, GM announced it was going with Samsung SDI instead. GM had received tax incentives to open the plant but the city council needs to amend the incentives since GM is changing partners. The $3 billion plant is expected to start producing batteries in 2026.
CHINA EV MARKET GETTING SATURATED
We follow the Chinese auto industry because it has such an influential impact on the industry as a whole and it’s absolutely amazing to see the pace at which new vehicles come out, especially electric ones. Nearly every day there’s something new. For consumers, that’s great. But how many more brands and models can the market support? Reuters reports at least 20 new electric SUVs launched in China just in April. That’s on top of the 93 models already crowding the market. That growth has pushed electric SUV sales from about 3,000 in 2020 to 1.5 million last year. But here’s the problem, the top 10 brands accounted for 84% of those sales. Everyone else is fighting for scraps, which helps explain the EV price war in China. And buyers are going for electric SUVs as the price gap narrows with ICE vehicles. But it also means that profits are lower and some of the brands won’t be able to survive. That’s why they’re turning to exports. Some China experts believe the government will subsidize exports to relieve the pressure. And that means they could take their price war with them. That’s bad news for just about any other automaker that’s in the EV segment.
BAOJUN YEP GETS EV PICKUP VARIANT
So, it seems only fitting to follow that up with a story about a new electric car coming out of China. Baojun, which is part of the GM-SAIC-Wuling joint venture, revealed that its small, modern, electric vehicle, called the Yep, will also be sold as a truck. But it’s so short it’s more like a high-riding ute or insert your own favorite comparison here. As for powertrain, the Yep features a 50 kW or 68 horsepower electric motor, so speed tops out at 100 km/h or 62 MPH, and it also has an LFP or lithium iron phosphate battery that provides up to 303 kilometers or 188 miles of range. No word on pricing for the truck, but the SUV is said to go on sale this June with a starting price around $14,500.
DAIMLER UPDATES EV BUS
Daimler is making updates to the electric version of its large bus, called the Citaro, that first launched in 2018. We think the big news here is that it gets improved battery cell chemistry, an optimized pack layout and a new thermal management system. The NMC or nickel, manganese, cobalt cells have a new anode, cathode and electrolyte. Depending on the setup, a pack in the eCitaro can be as big as 686 kWh. It says an articulated bus with this setup will average 220 kilometers or 136 miles of range. The non-articulated version, which has a 588-kWh battery, will provide 280 kilometers or about 175 miles of range on average. Charging rate of up to 150 kW is capable out of a standard plug station or 300 kW if it uses a pantograph or charging rail.
BYD TO MANUFACTURE IN VIETNAM
BYD is expanding its business in southeast Asia. The automaker was the top selling EV brand in Thailand in April, with 1,744 sold, which accounted for 45% of all the EVs sold in the country. And Reuters reports that BYD will open a factory in Vietnam to build electric vehicles but it’s not known how much it will invest. It also wants to form a local supply chain in the country.
VIETNAM MASSIVELY BOOSTS RARE EARTH PRODUCTION
And speaking of Vietnam, mining of rare earth metals soared in the country with countries and companies wanting to reduce their reliance on China for the minerals. According to the U.S. Geological Survey, mining of rare earths increased from 400 metric tons in 2021 to 4,300 tons last year. That’s pretty small compared to China which produced 210,000 tons of rare earths in 2022. But Vietnam is estimated to have the second largest rare earth reserves in the world, so its production is expected to keep on increasing.
And that brings us to the end of today’s show. Thanks for tuning in.
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Seamus and Sean McElroy cover the latest news in the automotive industry for Autoline Daily.