AD #3566 – Car Dealers Losing Market Share To EV Startups; Linamar To Open Gigacasting Factory; Baojun Yep Gets Cool Accessories

  

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

CAR DEALERS LOSING MARKET SHARE
Car dealers in California lost out on nearly $700,000 in gross profits last year thanks to EV makers, like Tesla, Lucid and Rivian who sell direct to consumers. That’s according to a study conducted by Automotive News. California has about 1,300 dealers and collectively they missed out on $900 million in gross profits. That’s prompting some dealers to invest more in their stores to sell more EVs. But others believe it’s unrealistic to think that dealers selling traditional brands will win over Tesla or Tesla-like buyers. There’s now thirty-five states that allow at least some kind of direct to consumer sales model, and Automotive News reports that dealers in Colorado and Washington are already losing market share.

MUSK STEPS AWAY FROM TWITTER, TESLA INVESTORS REJOICE
Tesla investors are rejoicing. Elon Musk tweeted out that he is stepping down as CEO of Twitter in 6 weeks. The Wall Street Journal reports that NBCUniversal’s head of advertising, Linda Yaccarino, was in talks to be the new CEO. Musk said he will transition to become executive chairman and chief technology officer. Tesla investors welcomed that news. They worried that Twitter was diverting Elon’s attention away from the automaker. And Yesterday, Tesla’s stock jumped 2.1% when the news broke and was up another 2.4% this morning in pre-market trading.

GERMANY SCORES BIG BATTERY PLANT
Europe and Germany just scored a major victory with Swedish battery maker Northvolt announcing it will build a new battery plant in Germany. It will invest several billion euros to open the plant, which will produce enough cells a year to power 1 million EVs. Construction could start later this year and Northvolt is aiming to begin cell production in 2026. The German government, and the state government where the plant will be located, were able to lure Northvolt with subsidies that were developed by the European Commission to compete with the U.S.’s Inflation Reduction Act. The subsidies still need approval from the EU Commission but if it does, it will be the first incentives granted under the framework.

 

VINFAST TO DO A SPAC
We thought that SPACs had kind of lost their luster. EV startups have watched their market caps melt away over the last year. But VinFast, the Vietnamese car company, is going to use a special purpose acquisition company called Black Spade, to get listed on the New York Stock Exchange. VinFast says that will give it a market cap of $23 billion. Now the question is, can Vinfast hold that market cap? When Rivian went public through a SPAC its market cap hit $100 billion. Lucid hit $89 billion. Now both are worth about $13 billion.

HYUNDAI-KIA FACE INSURANCE LAWSUIT
Hyundai and Kia are about to get sued by insurance companies. And that’s because they decided to not equip past models with engine immobilizers, which makes them easy to steal. It could cost the automaker millions of dollars. A wave of car thefts broke out after social media videos showed how vehicles could easily be started without the key. Automotive News reports a group of U.S. insurance companies filed a lawsuit against the automaker and are seeking reimbursement for money paid to owners who have had their vehicles stolen. The suit claims it can cost more than $3,000 per vehicle to repair cars that have been broken into. It can cost another $10,000 to fix any property damage caused by thieves taking joyrides. And if the vehicle isn’t recovered, the loss can be as much as $20,000. All told, the thefts could cost insurance companies as much as $600 million. Hyundai claims the lawsuit is unnecessary and that it followed federal anti-theft requirements. The automaker did introduce a software fix but earlier this week the AP reported the rollout has been slow and thefts continue to rise.

MERCEDES AXES CLS
One of the prettier cars on the market is getting the axe. Mercedes is going to stop making the CLS in August after 19 years in production. The current generation has smooth lines and good proportions, which seems to resonate with a lot of people. But Mercedes has too many cars in its lineup and it’s getting rid of the CLS a couple years ahead of time to make room for the all-new E-Class at its plant in Germany. And the new E-Class will be on sale before the end of the year.

HONDA TO EXPORT MIC EVs TO EU
It looks like Honda is going to start shipping Chinese-made EVs to Europe. It revealed that its second all-electric model for the European market will be the e:Ny1, which it calls a B-segment SUV. But it’s identical to the e:NS1 that Honda builds and sells in China with its joint venture partner Dongfeng. It rides on Honda’s e:N Architecture F, features a nearly 70 kWh battery pack and an integrated drive unit with up to 150 kW or 201 horsepower. On the WLTP cycle the e:Ny1 is capable of 412 kilometers or 256 miles of range. The e:NS1 is already on sale in China, but no word on when the e:Ny1 might launch in Europe.

LINAMAR TO OPEN GIGACASTING FACTORY
More gigacasting capacity is on the way, this time in Canada. The supplier Linamar is building a new plant that will have three 6,100-ton high-pressure casting machines. For reference, Tesla’s casting machines are 8,000 tons. Linamar’s plant will get built on a brownfield site in Welland, Ontario, not far from Niagara Falls, and it will start production in early 2025. What we want to find out is, who will Linamar make parts for? GM, Ford and Stellantis all have assembly plants within about an hour of where Linamar’s gigacasting facility will go. Toyota has two plants and Honda has one. Linamar will not say who its customer is, but that it’s getting a lot of interest from automakers.

   

SHIPPING SHORTAGE DUE TO CHINA CAR EXPORTS
China is on an export binge for cars and that’s causing a shortage of cargo ships. Mazda is running into problems finding ships to export its all-new CX-90 from Japan to the United States. China is expected to export 4 million vehicles this year, up from 3 million last year. And keep in mind that pre-Covid, Germany made 4.7 million vehicles. So that’s almost the equivalent of China exporting the entire German auto industry every year. 

BAOJUN YEP GETS COOL ACCESSORIES
When your profit is only $22 on every vehicle you sell, you’ve got to come up with other ways to bring in money. That’s the amount we calculate Wuling earns for every Mini EV, but if you’re a regular viewer of the show you know we hardly ever show the plain-Jane Mini EV. It’s almost always some wild-looking one with bright colors and I especially like to use this one with big unicorn-like wings. These models, like the GameBoy Edition, bring in more money, sometimes thousands. And now it’s doing the same to the Baojun Yep, which like the Mini EV, comes from under the GM-SAIC-Wuling umbrella. One version with a two-tone paint job, roof rack, white wall wheels and chrome hubcaps reminds us of a retro beach buggy. Many of you have said the Yep looks like a baby Bronco or Suzuki Jimny. But now it’s even more so. Sales are said to kick off in May and with affordable starting prices – about $4,700 for the Mini EV and $14,500 for the Yep – buyers are more willing to spend extra to personalize their car. 

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day and I hope you have a great weekend.