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Runtime: 9:24
0:00 EU Overcapacity Poses Plant Closing Threat
1:12 Tesla Makes More $$$ Per Vehicle Than GM, Ford
2:49 France Chops EV Subsidies on Too Much Demand
3:34 Rivian Cuts MSRP As Price War Rages
4:50 7 OEMs To Build Charging Network to Challenge Tesla
5:40 Tesla Made $9 Billion In EV Subsidies
6:15 Aston Adds 152 HP To Vantage
7:06 BYD Supercar Boasts 1,200 HP
8:00 Joby To Start Operating eVTOLs In Dubai
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
EU OVERCAPACITY POSES PLANT CLOSING THREAT
Global car sales have still not recovered to where they were before the pandemic. Automakers sold 8 million more vehicles in 2019 than they did in 2023. And that means a lot of manufacturing sites are sitting around doing nothing. Reuters reports that automakers in Europe are running at only 60% of capacity, which is well below the 80% that most automakers need to break even. BMW is doing the best with 75% capacity utilization, with Mercedes at 73% and the Volkswagen Group at 71%. Stellantis is at 56%, Renault at 54% and Ford at only 39%. The problem is that Europeans are buying 5 million fewer new vehicles than they did just four years ago. And unless sales start picking up soon, we’re going to see those automakers under enormous financial pressure to start closing plants.
TESLA MAKES MORE $$$ PER VEHICLE THAN GM, FORD
Maybe you already saw this story from Reuters pointing out that Tesla doesn’t make as much revenue per employee as General Motors and Ford. It showed that Tesla generates $680,000 in revenue per each employee, while GM generates over a million dollars and Ford gets $937,000. But what this fails to take into account is the difference in vertical integration at each company. GM and Ford buy 80% of the value of every vehicle they make from suppliers. So, much of their “headcount” is actually in the supplier industry. Tesla is almost exactly the opposite, it makes most of its parts in-house. So, here’s a metric that we think is much more important to look at. Last year Tesla made $4,900 in operating profit for every vehicle it sold while GM made $1,600 and Ford made $1,200. So, Tesla makes far more profit per vehicle than GM or Ford. Here’s a bit of history to put this in perspective. Some years back, when Chrysler added a third shift to make Grand Cherokees at its assembly plant in Detroit, it made the plant’s efficiency look worse because it added so many workers. But the extra revenue and profits those third-shift vehicles added, swamped all the efficiency numbers. So the moral of the story is, keep your eye on the bottom line, because that’s where the most important numbers are.
| OEM COMPARISONS | |||
|---|---|---|---|
| Tesla | GM | Ford | |
| Revenue/employee | $680,000 | $1,054,000 | $937,000 |
| Profit/employee | $4,916 | $1,626 | $1,237 |
FRANCE CHOPS EV SUBSIDIES ON TOO MUCH DEMAND
France is halting a subsidy to make EVs more affordable for people with low incomes because there was too much demand for it. In the program, anyone earning under 15,400 euros a year was able to lease an EV for 100-150 euros a month. France set aside 1.5 billion euros to cover 20,000 leases but then boosted it to 50,000 leases because of huge demand. However, that still wasn’t enough because it’s halting the program for the rest of the year and will resume it again next year. For those in higher income brackets, France is also offering incentives of 5,000 to 7,000 euros for purchasing a new EV.
RIVIAN CUTS MSRP AS PRICE WAR RAGES
To help boost sales, Rivian is cutting the base price of its R1T pickup and R1S SUV by $3,100. The R1T now starts at $71,700 including shipping while the R1S starts at $76,700. Both models have a range of 270 miles and they also qualify for a $3,750 federal tax credit. Rivian added a new battery option as well with 315 miles of range, and they start at the previous starting prices. Rivian will start delivering those models in March. According to data from S&P Global, R1T sales fell nearly 10% from January to November last year because consumers started buying the R1S instead once its supply improved, which helped boost sales of the SUV.
7 OEMS TO BUILD CHARGING NETWORK TO CHALLENGE TESLA
Seven automakers that sell EVs in North America are banding together in hopes of building a charging network that would rival Tesla’s Supercharger stations. Last July BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz, and Stellantis formed IONNA, which aims to deploy at least 30,000 high-powered chargers. Well, it just got approval from authorities and is now officially kicking off operations with plans of building its first stations before the end of the year. First in the U.S., then in Canada. The stations will be able to accommodate EVs with either the NACS or CCS charging port and will have bathrooms, food and shopping there or nearby as well as canopies over charger wherever possible.
TESLA MADE $9 BILLION IN EV SUBSIDIES
Tesla continues to cash in on other automakers needing to meet emission standards. Last year, the company earned nearly $1.8 billion selling EV credits to other automakers who exceed emission limits. Tesla has now made almost $9 billion since it started selling credits to other OEMs in 2009. Some people like to criticize Tesla for selling the credits, saying they wouldn’t be profitable without them. But that’s not the case anymore, Tesla would still be profitable even if it didn’t sell them.
ASTON ADDS 152 HP TO VANTAGE
The Aston Martin Vantage is getting the biggest-ever power bump in the company’s history. The car’s 4.0L twin-turbo V8 now makes 655 horsepower, which is a massive jump of 152 horsepower compared to the previous model. All that power comes from new camshafts, bigger turbos, better cooling and optimized compression. Mated to an 8-speed automatic trans from ZF, the new Vantage will do 0-60 MPH in 3.4 seconds. The chassis also required some reworking to handle all that power, including additional bracing, Bilstein shocks and an electronic rear differential. Throw in a refreshed interior and you’ve seen most of the highlights of the new Vantage, which will be out in the second quarter of this year.
BYD SUPERCAR BOASTS 1,200 HP
But it ain’t got nothing on the first EV supercar from BYD’s ultra-luxury division YangWang. The U9 features four electric motors that combine for a little under 1,300 horsepower and launch this electric rocketship from 0-100 km/h in under 2.0 seconds. It’s also supposed to be available with an active suspension system, called DiSus-X, that could make the ride pillowy-soft or sports car stiff as well as allow it to drive on 3 wheels and even hop. And YangWang just revealed that the U9 will officially launch on February 25th. No word on pricing yet, but the brand’s G-Wagon competitor, the U8 SUV starts at about $150,000.
JOBY TO START OPERATING EVTOLs IN DUBAI
eVTOLs are headed to Dubai. Joby Aviation signed a deal with the region’s Road and Transport authority to launch an air taxi service by early 2026, with initial operations starting as early as next year. Joby’s all-electric eVTOL can carry 4 passengers and a pilot at up to 200 MPH for up to 100 miles or 62 kilometers. At first it will operate between the Dubai International Airport and Palm Jumeirah island, which is normally a 45-minute trip by car but will only take 10 by flying. The deal gives Joby the exclusive right to operate air taxis in Dubai for six years.
And that brings us to the end of today’s show. Thanks for tuning in.
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Is it 100 kilometers for a range of 62 miles or as you said 100 miles which would be 160’ish kilometers? 62 kilometers is about 38 miles.
Sean, If Renault has surplus plants, why wouldn’t the French government sell some of them to the Chinese EV companies that want to sell in Europe so bad? Win win for everyone isn’t it? Anything to keep the plants open, right? Even Nissan might be interested. Isn’t their largest plant now outside the EU, In the UK?
Sure they make more, because megacastings are cheaper to produce. But, any accident is a total loss, and drivers cannot afford Tesla insurance. I read some OEMs are considering megacastings too. I really hope they abandon the idea. Only hurts the customer in the end. How good for the environment, is a car that cannot be repaired?
Is there any data on what percentage of cars are crashed during their lifetime, and what percentage are scrapped because of crash damage? Does it really matter a lot how much less “repairable” Teslas, or other cars using big castings are, compared to ones using sheet metal structures? If there is a big difference, then the “megacastors” should just have higher premiums for collision insurance.
I saw a video where a Rivian truck was repaired, and rather than replace an entire casting, they welded in a repair quarter. It was my understanding that the megacastings are supposed to initially be cheaper, more sturdy, lighter weight, and more efficient to build and operate, making it better for the manufacturer and the customer until a potential collision. In the off chance of an accident, I heard there are just different ways to repair (as in the Rivian video), where instead of an easy body panel replacement, they just cut and weld a section. Yes, that would make repairs more expensive, but the offset of the benefits and chance you might not need bodywork (supposedly) outweigh the repair cost. I’m sure someone more knowledgeable in autobody could weigh in on this.
Also, I know a few people who have complained about their non-mega bodied vehicles, that all insurance companies want to do nowadays is “total” any vehicle after a crash, if there is more than minor damage. Two friends in particular told me of their two different instances where they would have rather kept the vehicle and gotten it repaired, but the insurance gave them a “totaled” check that wouldn’t even cover an equal replacement vehicle.
Ernie, I understand your concern. The severity of the concern depends on the questions posed by Kit. Crash data is subject to change and becomes less of a factor as we reach a saturation of vehicles equipped Automated Emergency Braking.
Drew, rather than having concern, I’m thinking that there is no reason for concern about the reparability after a significant crash. In my 60-some years of driving, I’ve never had a crash, other than my ’57 Chrysler being rear ended by a Corvair, at probably 10 mph.
A few years ago, my sister had a ~one year old Subaru Forester, without “megacastings,” totaled after someone turned left in front of her. No one was seriously hurt, but her car was totaled because the air bags blew, and the cost of rebuilding the interior, along with fixing the front end damage would cost more than the value of the car.
Kit, You are so right about the cost of repairing a car. A while back, I was considering buying a used 2016 BMW Z4 3.5i that was advertised as having had a minor fender bender. The seller told me that a tow truck had backed into the front corner of the car when it was parked. He still had the repair details and sent them to me. It was over $20K even though the repair was only front bumper and cover, left hand front fender, hood, windshield and one headlight. The things that made it so expensive was extra crap like headlight washers, and a number of sensors of various types. Things like oil coolers and radiators that are mounted too close to the bumper also contributed. I trusted him that the repair was done correctly, but the ridiculous repair costs made me pass on the car.
Ernie and Kit, while I don’t know those scrappage numbers they are much higher today then even 10 years ago. Insurance companies are quick to just write off a car with minimal damage rather than repair it and have it’s value 1/2ed . Example I was looking at a Fiat 124 Spyder Abarth it had 57,000 miles and is now 5 years old and it was for sale at a price of 13K and has been for sale for months . I looked at the car Fax and it is a rebuilt title from being a insurance write off. The damage was listed as minor to moderate and it was written off as scrap. Once a car has a rebuilt or reconstructed title it all but ensures the value is worthless in resale. Car fax while a great tool for buyers has killed car values for owners involved even in minor accidents you as the owner are better off having the insurance company total the car unless you plan to drive it until it dies a death of old age.
I think that the mega castings may play an outward role on minor incidents that would otherwise be repaired.
In the case of a major incident, the mega castings are not going to change things too much. Modern cars are designed to dissipate energy via the crumple zones in a major accident. So they are going to crush more than older cars that were stronger and did not dissapate engergy. Thusly, modern cars will be totaled at a higher rate than older cars in a major accident. The mega casting on its own is not going to make a difference in these types of crashes.
Now, a parking lot bump that may damage the mega casting, that could be problematic. The old 5MPH bump into a pole test that has been around since the 70s is still a valid test after all these years. That is the kind of incident that is going to raise rates as that is a scenario that plays far more often than any major incidents in terms of insurance claims. Will a 5MPH bump take out a mega casting? Maybe, maybe not. I have not seen any data either way. If it does, then a minor bump could be in the $10-15K repair level versus the more typical $1-5K repair cost of modern cars with sensors and other items on the front/rear.
Over in Motor Trend, it reported that IONNA hired Seth Cutler, to head up operations of this new joint venture. former of Electrify America. Yet, as some said on the comments on that site, it “seems like a weird idea since EA is constantly being criticized for the lack of maintenance of its charging stations. I would have preferred that they would have picked up someone associated with Tesla’s charging operation.” I guess some experience is better then hiring someone with no experience!
My other concern is, here you have seven automakers, who rarely agree on anything, having to agree on this one thing! I would if one or two are taking the lead and the others offering putting up money, with their thoughts on what and how they feel it should work. I mean like they said in the article, you would be able to schedule reservations. How would that work? Let’s say someone reserves a charger port at already busy station. If the reservation holder gets there on time, or a few minutes late, and someone else is already using the charger, would they have to wait or the person currently using it, have stop, so that the person who had scheduled the reservation could use it? If you pull up to a charger, and someone has already reserved it and they’re not there, or they’re running late, but you really need to charge, what are you going to doing? Wait to see if they show up, or start charging? In either situation, it could get pretty ugly. Or, what’s the point of making a reservation, if you have to wait to use it when you get there, or you can only make a reservation during none peak times?
The story on measuring Tesla revenue per employee revenue vs. GM and Ford’s metrics, should also include the new car dealer workforce and not just workforce at parts suppliers.
Tesla operates its own direct salesforce and a good part of service activity with factory employees. Meanwhile GM and Ford continue to surrender a good margin per vehicle to their franchised dealers, to fund sales and service activities need for their vehicles.
Cheers
HANK BONUTTI
I just watched a youtube cybertruck video by a couple British sounding guys. It was interesting. It was noisy and rattly, had awful visibility, and didn’t ride as well as a normal pickup, but they said the drive-by-wire 4 wheel steer felt good, especially on the highway. It was the $100K perforance version so was very quick, as expected.
While the BYD supercar can hop and drive on three wheels, as impressive as that is, of what real benefit does that provide? Jumping over speed bumps? A smooth three wheeled drive to the tire repair shop? Talking/bragging points? It just seems like tech for the sake of tech! That engineering, IMHO, would have been better spent on increasing vehicle range, reducing battery weight and addressing things that drivers of ICE vehicles complain that they are loosing in the transition to EVs. I applaud what Toyota (with their stick shift for EVs) and Hyundai with their paddle shifters on the Ionic 5 N series) are doing to increase driver involvement! While it might seem fake or unnecessary to some, the spoilers and skirts on many of the vehicles today are more for making a vehicle look faster, then those vehicles will ever be driven! The element that I think works best, as I believe is the case with the Ionic 5 N, is the ability to turn the system off when not chasing apexes and hustling through curves, and around bends. Like when running errands, the grocery runs and picking up precious cargo from school. Gullwing doors on family SUVs, or super sport cars that hop (unless it’s hopping over potholes), unless your one of the Dukes of Hazzard, just seems like a waste of time and valuable resources.
wmb, the complexity for complexity’s sake that bothers me is not BYD doing crazy stuff with their expensive exotic, but Hyundai’s using a 6 speed DCT in their hybrids, with the result being that they are slower and thirstier than Toyota hybrids with a simple single speed power splitter arrangement, with no clutches and gear changes.
They put paddles in almost everything, because it is cheap to do, and a few people think it’s cool. I almost never use them. They are just a gimmick, with no useful purpose in normal driving. It is even stupider to have them with EVs and CVTs, except a few cases of using paddles for adjustable regen braking of EVs. The absolute stupidest thing is fake shifts with CVTs in normal automatic mode.
I remember the first car I drove with paddle shifters and I thought it would much cooler than it was. After a few minutes the interest was gone and I hardly ever used them again. Even my 2012 CTS has a manual mode where you push the shifter over to the right and then a bump forward or back will take the transmission through the gears manually. Ive used it maybe 5 times.
These price cuts on EVs are another concern I would have if I was in the market (which I’m not). Everyone already is aware of the horrible depreciation of driving a new car off the lot. Add in a few more thousand from a manufacturers price cut and I would have to believe it’s going to leave some customers with feelings that they got taken advantage of. Or do they just chalk it up to the cost of being first?
Lambo, I’ve used the paddles in Corvettes about as often as you’ve used manual mode in your CTS. The same applies with the Mini.
Hertz really got the hurts with their Teslas, which saw an extra few thousand of depreciation due to the price cuts. There’s probably no good way to know when prices of EVs will bottom out, and then start going back up.
Kit- Yeah, the technology used in today’s automatic transmissions are pretty hard to beat. Even drag racers use them now because they get very consistent times. So, although manual shifting can be fun its more of a gimmick than a necessity. The only time I really ever override my automatics gear selection is typically on my truck when I’m towing. Aside from shutting off the overdrive, there are times the transmission selects a gear for economy when I need more power and prefer a lower gear. Other than that, most vehicles can detect a heavy foot and adjust the shift points accordingly. Really not much need to manually shift an automatic. Made even more obvious by the fact that many now only offer PRND. With 8 to 10 speed transmissions the need to select a specific gear becomes less important. The ability to force it into low first or second is still a nice feature. But also rarely used.
The C8 and Mini just have PRND and manual modes. They also have multiple drive modes affecting shifting, throttle mapping, and steering feel. You can “mix and match” some of that with the C8.
Sean,
In Story 2 comparing Tesla to GM and Ford, you first show numbers for revenue per employee. Then you go on to point out that Tesla makes more profit per vehicle, while the table shows “profit / employee”. Which is it? Profit per employee, or profit per vehicle?