AD #3706 – Telsa Model 2 May Be Built in China; Republicans Attack Biden EV Mandates; Stellantis Jumps Into Battery Swapping

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TESLA MODEL 2 MAY BE BUILT IN SHANGHAI
Tesla may start making its $25,000 car at its plant in Shanghai. A media outlet in China called Late Post reports that Tesla will boost production at the plant to 2 million cars a year, up from 1.1 million today and that extra production will likely be for a cheaper car, which many are calling the Model 2. Late Post says that Tesla really needs a new model in China because it’s losing market share to Chinese EV makers who are growing faster. It says that the Model 3 and Model Y just aren’t as competitive as they were when they launched. And that’s why it believes that additional production capacity will be for the $25,000 car.

STELLANTIS JUMPS INTO BATTERY SWAPPING
Well, here’s a fascinating development. Stellantis wants to get into battery swapping for its electric vehicles. It’s working with a Bay Area startup called Ample to swap batteries in the Fiat 500e’s that are part of Stellantis’ free2move car sharing service in Europe. They’re also talking about expanding that to its other EV models in other regions, presumably North America. Ample says its charging stations can be built quick and cheap and can be located just about anywhere. Ample uses a modular battery that it says can fit any EV, and that it can swap out batteries in less than 5 minutes. The first swapping station opens in Madrid next year to service one hundred Fiat 500e’s.

STELLANTIS FILES PETITION AGAINST CARB
Speaking of Stellantis, it’s really upset with the California Air Resources Board. It accuses the agency of favoring several of its competitors, which is leaving it at a competitive disadvantage. It accuses CARB of retaliating against it with an “underground regulatory scheme.” CARB formed separate, more flexible emissions agreements in 2019 and 2020 with Ford, BMW, Honda, Volkswagen and Volvo. Stellantis says it was excluded from getting a similar agreement because it joined the Trump Administration’s effort to revoke CARB’s waiver from the EPA that allows it to set stricter emission standards than the federal government. Stellantis says CARB violated state law by not giving public notice about the agreements and not allowing the public to comment on them. The automaker is also accusing the agency of violating its first amendment rights, so it filed a petition with the California Office of Administrative Law for it to take legal action against CARB. And we’ll have to watch and see how far it gets with this.

REPUBLICANS ATTACK BIDEN EV MANDATES
To show you how political EVs are becoming as we get closer to next year’s presidential election, Republicans in the U.S. House of Representatives want to revoke the Biden Administration’s EV mandates. 216 Republicans and 5 Democrats voted to prevent emission regulations that would result in two-thirds of vehicles being electric by 2032. The White House has threatened to veto the legislation which says it would “catastrophically impair” the EPA’s ability to issue auto regulations. Automakers, dealers and the UAW have also urged the Administration to set less stringent standards. And this is clearly going to be a hot button topic in next year’s election.

RENAULT SAYS AI WILL TRANSFORM MANUFACTURING
Renault says artificial intelligence is going to completely transform its industrial base. Right now the Group uses over 300 AI applications, mostly for the analysis of images and sound, which is done for things like predictive maintenance. It says this has already helped it save 270 million euros and cut energy consumption at industrial sites by 20%. However, by 2025 Renault wants to bump its number of AI applications to 3,000. It says that will reduce energy consumption at industrial sites by 20% more by 2025, result in production costs per ICE vehicle dropping by 30% and 50% for EVs by 2027, allow it to cut vehicle development time by a full year, slash vehicle delivery time by 60% and cut the carbon footprint of vehicle production by half.

HONDA TEASES NEW EV
Looks like Honda is going in a bold styling direction with its future EVs. It showed this teaser image of a new EV model series that will debut at CES in about a month. I would guess this is the front of the vehicle, which has a very steep slope, and also notice how far forward the wheels are shoved. But this is all we have to go on right now. We’ll learn more on January 9th at CES where Honda will also reiterate its plans to introduce 30 new EVs by 2030 and go fully electric with its automotive sales by 2040, which will include both BEVs and fuel cells.

CAR DEALERS LOSE SERVICE BUSINESS OVER LACK OF TRUST
Higher new car prices are causing owners to hold onto their vehicles longer. And that means more trips to the repair shop. According to Cox Automotive, owners had to take their vehicle in for service 2.5 times on average this year, which was up from 2.3 times in 2021. Worse, they’re paying 45% more for that work than they were in 2021. The average trip to the dealer cost owners $258. You might think that would be a contributing factor to more people going to independent repair shops for work, but the average price to go to a non-dealer service center was $249. So, less than a $10 difference. Cox says the biggest reason for total dealership service dropping from 35% down to 30% is a lack of trust. And because of that, chain stores like quick oil change places and tire replacement centers now control nearly the same amount of the repair market as dealers. But one advantage for dealers could be EVs. They’re hiring more technicians that know how to work on electrics and Cox’s study showed that EV owners actually had to go in for service more than ICE owners, an average of 2.8 times for EVs versus 2.3 times for ICEs. I think this is probably related to automakers still working out kinks with new EVs, which should get better in time, but for now it could be a way for dealers to gain an advantage.

TOYOTA ANNOUNCES BATTERY RECYCLING DEAL
The only way that EVs make environmental sense is if their batteries get recycled at the end of their lives. That’s why Toyota is joining forces with Cirba Solutions to greatly expand its battery recycling network in the United States. Cirba will collect batteries from used Toyota hybrids, PHEVs and battery electrics, and recycle them at one of its facilities in Lancaster, Ohio. That plant will concentrate on recycling batteries from the East coast and Midwest. Cirba says it can recover 95% of the materials in a battery and process them to go back into the supply chain to make new batteries.

GM HYDROTEC LANDS DEAL WITH AUTOCAR
GM’s Hydrotec business unit, which makes fuel cells, is going to supply them to a company called Autocar Industries. It makes customized work trucks like cement mixers, dump trucks and tractors for depots. Autocar will start installing fuel cells in a Class 8 semi and a front end loader at its plant in Alabama in 2025, while the fuel cells will be made by Hydrotec in Michigan. Each fuel cell will produce 77 kilowatts of power. Charlie Freese, the executive director of Hydrotec, says fuel cells are better suited than batteries for towing, hauling heavy loads and driving more than 500 miles at a time. Hydrotec also says it has a major announcement coming next Monday and we’ll let you know more about that as soon as we get the info.

BYE-BYE LOW COST CARS
The number of low-cost models in the U.S. and Europe is dwindling. According to S&P Global Mobility, the number of vehicles priced under $30,000 fell from 50% in the U.S. market in 2017 to about 25% today. The same thing is happening in Europe, where the number of A- and B-segment models dropped from 190 in 2014, to 160 today and will probably go to 124 next year. We think it’s because it’s so difficult to make a profit on those small cars. But S&P says it could open the door for more low-cost Chinese vehicles.

But that brings us to the end of this show. However, don’t forget to check out Autoline After Hours which goes live at 3PM EST on our website and YouTube channel.