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0:00 2023 U.S. Sales Best Since Pandemic
0:56 BEVs Sell Well in Certain Areas
1:45 Fisker, VinFast Give Up on Direct Sales
2:37 Chip Shortage Turns Into Chip Glut
3:25 U.S. Battery Production Surging
4:47 Ford Lightning Gets Both Price Hikes & Cuts
5:40 Ram Hikes Pickup Prices
6:18 GM Offers Rebate on EVs That Lost Tax Credit
7:04 Chevy Bolts Going for Under $20K
7:52 VW Says Solid State Battery Test Promising
8:43 Oil Prices Down Despite Global Turmoil
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
2023 U.S. AUTO SALES BEST SINCE PANDEMIC
Automakers are reporting car sales for 2023 and General Motors is once again the sales leader in the U.S. The automaker sold 2.6 million vehicles last year, up 14% from 2022. Toyota was number two with 2.25 million vehicles sold, which is a 6.6% gain. As of writing this, not all automakers have reported their sales but overall U.S. sales are expected to be around 15.5 million units compared to 13.9 million in 2022. And that’s the highest number since the pandemic. Electrified vehicles, including hybrids and PHEVs accounted for 17% of sales, with BEVs totaling about 8%.
BEVs SELL WELL IN CERTAIN AREAS
And according to a new report from Urban Science, BEV demand is growing in pockets around the U.S. California still leads the way in BEV sales. Last year, three out of the five top market areas for BEV sales by volume were in California. And four of the top five markets by BEV share are also in California. But sales are growing in other areas as well. The BEV share in Seattle-Tacoma was 20.4%, 13.8% in Las Vegas and 12% in Washington DC. And in two counties in Washington the share is 40% and one county in Texas and another in Georgia are at a 15% share.
FISKER, VINFAST GIVE UP ON DIRECT SALES
We’ve heard that EV startups can cut costs by avoiding franchised dealers and selling cars directly to consumers. Well, that was the theory. But Fisker and VinFast are throwing in the towel with their direct sales model and are turning to dealers, instead. Fisker was going to build its own network of showrooms and delivery centers, but it turns out that was more expensive than signing up with existing dealers. It found it didn’t have the money to buy all the land, pay all the sales salaries and have acres of inventory sitting around waiting for customers. It also found that it wasn’t very good at delivering cars to customers. Last year Fisker made 10,000 EVs, but was only able to get 4,700 of them into customers’ hands.
CHIP SHORTAGE TURNS INTO CHIP GLUT
After three years of the auto industry struggling with a chip shortage, guess what’s happening now? There’s too many chips. Mobileye, which makes cameras and chips for ADAS and autonomous vehicles, warned investors that it’s going to get hammered in the first quarter as automakers cut orders to sell off excess inventory. The Wall Street Journal reports that the stock prices of chip manufacturers NXP, Onsemi, Texas Instruments and Wolfspeed are all down on expectations of a chip glut. And so it goes. From famine to feast. The same thing will probably happen with EV batteries. Battery experts predict there will be a glut of EV batteries in the early 2030s.
U.S. BATTERY PRODUCTION SURGING
But it’s still all systems go for U.S. EV battery production. According to a study from the Environmental Defense Fund, the U.S. has already locked in enough battery capacity to outpace the anticipated demand for EVs in 2030, estimating over 1,000 gigawatt hours per year by 2028. It will be needed for an EV scene that’s revving up, hitting 12% of total U.S. vehicle production in 2023, up 70% from the previous year. 45 battery facilities are in the pipeline, boasting an average capacity of 23 gigawatt hours per year. This push has not only accelerated U.S. investments in EV manufacturing and job growth, tallying over $165 billion in the past eight years, but it could also create 179,000 direct jobs, along with 800,000 more in the broader economic landscape.
FORD LIGHTNING GETS BOTH PRICE HIKES & CUTS
Ford continues to mess with the pricing for the F-150 Lightning. The commercial version, called Pro, now starts at just under $57,000, including destination charges, which is $5,000 more than a 2023 model. XLT, which is the base version that a retail customer can buy, is almost $67,000, an increase of $10-grand. The Lariat trim line is also up by $2,000. But there are price drops for the top two trims of $7,000 and $5,000. Platinum trucks now start at $87,000 and Platinum Blacks start at $95,000. However, with price tags over $80,000 both models do not qualify for the federal tax credit, while the other versions do.
RAM HIKES PICKUP PRICES
And before we get into more news about the federal tax credit, I’d like to point out that it’s not just the price of electric trucks going up. ICE truck prices are on the rise too. Ram announced new MSRPs for the 1500 pickup and every trim is up. The increase is as little as $855 for the base Tradesman model but it steadily goes up from there to the Longhorn edition, which is just over $77,500, including destination charges, or more than $14,000 over last year’s price.
GM OFFERS $7,500 REBATE ON EV THAT LOST TAX CREDIT
Now back to those tax credits. New guidelines for battery sourcing requirements kicked in on Monday, which means a number of EVs lost access to the full U.S. tax credit. GM is one of those companies with its Ultium-based EVs, but it doesn’t want the change to dissuade people from buying its electrics. So, it told dealers that it would cover the $7,500 for eligible EVs. But it might not have to do this for too long. GM believes the sourcing requirements will change again, which will make its EVs eligible again sometime early this year. And while many vehicles have lost access to the full credit for purchases, it’s still available for EVs that are leased.
CHEVY BOLTS GOING FOR UNDER $20,000
The one GM vehicle that didn’t lose access to the credit is the Bolt. And it’s quite the bargain. With a starting price just under $27,500, including destination, someone could buy a Bolt for under $20-grand with the full credit. And GM is offering leases on the Bolt that start at $299 a month. But you better act fast. GM ended production of the Bolt in December, so once the existing models are sold, there’s nothing to replace them. A new Ultium-powered version of the Bolt will come back to the market, but it’s not expected to be out until 2025. The plant that made the Bolt is being retooled to make the electric Silverado and Sierra pickups.
VW SAYS SOLID STATE BATTERY VERY PROMISING
Solid state batteries for EVs could be a game changer in terms of range, charging time and cost. And VW says it’s extremely encouraged by the latest test results. It tested solid state batteries from its partner QuantumScape and found that after 1,000 fast-charging cycles the battery only degraded by 5%. That’s the equivalent of driving over 300,000 miles. The auto industry’s target for solid state batteries has been 700 charging cycles with an expected 20% degradation. Of course, it’s one thing to get results like this in a test lab. It’s another thing to make these batteries in high volume production. Even so, the results are very encouraging.
OIL PRICES DOWN DESPITE GLOBAL TURMOIL
Analysts expected oil prices to increase last year because of conflicts in the Middle East and Russia’s invasion of Ukraine. But that didn’t happen. According to the Wall Street Journal, oil and gasoline prices were down 5% and 24%, respectively last month. And that’s largely due to record fossil fuel production in the U.S. Oil exports reached 4.5 million barrels a day in November, which is more than Iraq, OPEC’s second largest producer. And U.S. LNG exports are also expected to hit a record in December.
OEMs POUR BILLIONS INTO SDV
Software defined vehicles, or SDVs, are one of the hottest topics in the industry today. Alix Partners says that OEMs are spending anywhere from 11% to 75% of their R&D budgets on SDVs. And that’s what we’ll be talking about this afternoon on Autoline After Hours. Mark Wakefield from Alix Partners will be on the show, and so will Sam Abuelsamid from Guidehouse Insights. So join John and Gary to learn why automakers and suppliers are pouring so many resources into developing software defined vehicles.
But that’s all for today. Thanks for tuning in.
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