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Runtime: 8:30
0:00 U.S. Impounds VW’s Luxury Cars
1:00 Stellantis Did Really Well in 2023
2:03 Italy Starts Courting Other Automakers
2:52 Continental Makes Major Job Cuts
3:49 BorgWarner Gets Rights to Build BYD’s Blade Battery
5:11 GM Nearly Doubles Super Cruise Network
5:43 Electric Corvette Sports Car Coming in 2028
6:16 Ford Thinks Chinese Are Prepping to Enter the U.S.
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
U.S. IMPOUNDS VW’S LUXURY CARS
Thousands of Porsche, Audi and Bentley vehicles have been impounded by U.S. custom officials because they reportedly have an electronic component that was made with forced labor in China. VW says it is replacing the part and that it expects to get the vehicles delivered to customers by the end of March. The Financial Times reports that the component was made in “western China.” And it’s against U.S. law to import products that were made with forced labor in China’s western Xinjiang region. The VW Group, which those luxury brands are part of, is under immense pressure to sever ties with a plant that a subsidiary of its joint venture partner operates in the region. As we reported yesterday, VW is in talks with SAIC about ending its involvement at that plant because forced labor may have been used to build a test track near the plant.
STELLANTIS DID REALLY WELL IN 2023
Stellantis reported its full year’s earnings and we think it did really well. It sold 6.1 million vehicles, up 5.7%. Revenues came in at €189 billion, up 6%. It posted an operating profit of more than €24 billion, with a 12.8% profit margin. And its net profit was €18.6 billion. It also generated free cash flow of nearly €13 billion, which gives the company a substantial war chest. Globally, it handed out nearly €2 billion in profit sharing to employees. UAW workers in the US will get an average of $13,860, but that’s down from last year’s $14,760. So why did UAW members get less profit sharing? It’s because of the strike. That cut into Stellantis’s U.S. profits, and cut $900 from union members’ profit sharing checks.
| Stellantis 2023 Earnings | ||
|---|---|---|
| Vehicle Sales | 6.1 Million | +5.7% |
| Revenue | €189.5 Billion | +6% |
| Operating Profit | €24.3 Billion | +13.8% |
| Net Profit | €18.6 Billion | +11% |
ITALY STARTS COURTING OTHER AUTOMAKERS
The Italian government is butting heads with Stellantis over building more vehicles in the country. Italy wants Fiat, which is part of the Stellantis Group, to boost production to 1 million vehicles a year, up from 750,000 last year. But Stellantis wants more subsidies and incentives to increase that production. Italy has set aside 6 billion euros to support domestic auto production next year. And part of that funding is being used to lure another automaker to the country because of its battle with Stellantis. But in our mind the only viable options would be Chinese companies or VinFast. Many countries in the EU want to keep the Chinese out but governments are also courting them because they want to bring in more jobs.
CONTINENTAL MAKES MAJOR JOB CUTS
Here is something you should expect to see more of. German supplier Continental announced it’s laying off 7,150 workers to help cut costs. It’s axing 1,750 jobs in research and development, while the rest are administrative positions. And 40% of the cuts are in Germany. It’s also looking at merging sites in Germany and elsewhere. Last year, the company said it is looking to save 400 million euros annually starting in 2025. It needs to cut costs because ICE sales are dropping, EV demand is slowing and price cuts are forcing it to be leaner.
BORGWARNER GETS RIGHTS TO BUILD BYD’S BLADE BATTERY
BorgWarner expects to sell a lot more EV parts this year by supplying to a lot more Chinese companies. We think the most important is a partnership with a subsidiary of BYD, FinDreams, for LFP battery packs. Not only will BorgWarner get the cells to make the packs, it’s also getting the rights to its battery pack design and manufacturing process. Borg hopes to be the go-to supplier of LFP packs for Class 3 and above commercial vehicles in Europe, North and South America and parts of Asia Pacific. Another deal involves making electric motors for XPeng. The motors have an operating range up to 800 volts and can produce up to 300 kW or just over 400 horsepower. XPeng will use them on its X9 minivan and a new B-class sedan. Borg’s other deals involve inverters. It formed a joint venture with Shaanxi Fast Auto Drive Group to develop a high-voltage inverter for the Chinese electric commercial vehicle market and a deal with an unnamed major Chinese OEM to supply a more power dense inverter for plug-in hybrid and range extended electric vehicles. For the whole year, BorgWarner expects to sell 25-40% more eProducts than it did in 2023.
GM NEARLY DOUBLES SUPER CRUISE NETWORK
In 2022 GM doubled its Super Cruise network and now it’s nearly doing the same. The last expansion took it to over 400,000 miles of road where the hands free driving technology works and now it’s going to a total of about 750,000 miles by the end of next year. Many of the new roads include minor highways that typically connect smaller cities and townships. The expansion has already started going out to customers via an OTA update at no additional charge.
ELECTRIC CORVETTE SPORTS CAR COMING IN 2028
Speaking of GM, its first all-electric Corvette sports car will likely go into production in 2028. Autoforecast Solutions reports that the Corvette Stingray EV will start rolling down the line at GM’s Lansing Grand River plant in February of 2028. But it’s possible this won’t be the first electric Corvette. The Corvette SUV could take that crown. It’s supposed to launch next year sometime, initially with a V8 engine, but it could also go electric.
FORD THINKS CHINESE ARE PREPPING TO ENTER THE U.S.
The head of Ford’s EV group warns that Chinese automakers are preparing to enter the U.S. market and they represent a massive competitive threat. Marin Gjaja, the head of Ford Model e admits that Chinese automakers have a technological lead, especially when it comes to electric cars. He predicts that they’ll establish assembly plants in Mexico to gain access to the U.S. market without having to pay a 25% import tariff on Chinese made vehicles. Ford is particularly concerned about cars like the BYD Seagull which has a base price under $11,000 in China. It estimates that the BOM, or bill of material of all the components needed to make the car, is only $8,000. This is exactly why Ford launched a top secret skunk works to develop an electric car that significantly slashes costs. Marin Gjaja says the U.S. auto industry better get fit now or it doesn’t have a future.
He created the first EV skateboard, pushed the development of hydrogen fuel cells, and was one of the pioneers of autonomous technology. So what’s he up to now? Larry Burns is the former head of R&D at General Motors and is a fountain of information on the future of automotive technology. He’s also our guest on Autoline After Hours today, and we invite you to sit in to hear what he has to say. Frank Markus, from Motor Trend, will also be on the show, so join John and Gary to learn about the latest tech trends in the automotive industry.
But that brings us to the end of today’s show. Thanks for tuning in.
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Continental is just the tip of the iceberg. Unless traditional automakers can produce affordable EVs or the government eases up in the EV proliferation requirements then the auto industry is going to take a huge dive. We have basically walked away from the passenger car market and if Gas prices spike to try and help push EVs the truck market will also take a dive. We have set ourselves up to hand over the auto market to China and the Japanese. The government can pass all the requirements it wants but you can’t force consumers to buy something they don’t want. They will just hold onto what they have or buy used. Expect more cuts within the auto industry.
The Stellantis UAW folks got that $5000 signing bonus for the new contract but it cost em $900 in profit sharing. I guess thats still a win for them.
As long as we have cheap gas in the U.S., I suppose millions of people will keep buying huge vehicles they don’t need. Cheaper EVs won’t change that too much, though more people might buy an EV as a 2nd or 3rd car, if they have home charging.
BYD’s building the plant in Mexico will be a big threat to every car company selling in the U.S., if they use enough North American content to avoid the 25% tariff. They will not only have less expensive cars, but most indications seem to be that they are also good products, not the Yugo of the 2020s.
It’s amazing to me how much you look and sound just like your dad. Keep up the good work! I’ve been a watcher since you guys were on Speed Vision!
When the Chinese auto companies come to the USA and sell inexpensive vehicles, ICE or BEV, they will clean up because the current vehicle prices in the US are ridiculously expensive, especially trucks. The Chinese will be the VW Beetle and Toyota Corolla all over again but this time they will touch all segments, and the other automakers will suffer considerably unless they bring their prices down to more reasonable levels, their profit margins are testament to how much they have been gouging the American consumer these past years. You can blame the UAW, but it was management that agreed to those fat contracts. I for one can’t wait for the domestic automakers to get smacked down by the Chinese and brought into line like when the Japs came and showed them up in value and quality back in the 70s. Time for a reboot in the US auto industry.
Hydrogen. Going nowhere?
https://www.autoweek.com/news/a46791348/shell-closes-hydrogen-stations-california/
Ziggy, even though they quit selling cars, and sell a lot of expensive trucks, GM’s and Ford’s profit margins are not much, ~2.5% for Ford and 5.9% for GM in 2023. The can’t lower prices much, and even break even. The companies are spending money developing EVs, and need to pay for that with money made from F150s, Suburbans, etc., and even without the Chinese, both companies will be in deep trouble if the market for big pickups and SUVs dries up.
#2 yes some people will buy big vehicles they don’t need as long as gas is cheap in the US, but why is it anyone’s business as long as I can afford to drive what I want, it’s no different than people have a place for the winter months in Florida and leave a house in the colder climates set empty, it still has to have some heat to keep pipes from freezing. When someone makes the payments on a vehicle for me then they can have a say what drive. Some people worry what other people are doing when they should just take care of their own business.
Danny, in addition to the damage to the environment, the 6000 pound trucks, and now 7000 pound electric pickups make it more dangerous for the rest of us road users. Also, the heavier the vehicle, the more damage is done to the roads. Listen to today’s AAH. The topic was discussed a little there. Yes, you can drive what you can afford, but the ridiculous vehicle mix in the U.S. is everyone’s business, more than my house that is barely heated.
Kit- it does seem quite hypocritical to always complain about the trucks you see that are being driven with nothing in the bed. Meanwhile you are retired with at least three vehicles one un-needed being a Corvette, and one SUV, two homes so one certainly is not needed. Doesnt maybe damage the road but its still a carbon footprint not needed.
Step outside your little view of the world and understand that families have limited choices when it comes to vehicles that can meet all their needs. A truck like any new vehicle is an expensive purchase so not something many can buy and just park when needed. So, if they have snowmobiles, dirt bikes, a camper or boat or tow anything even only twice a year they likely need a full-sized vehicle. Nothing may ever get placed in the bed. You have to remember that there are no V8 sedans anymore. You can’t tow much with today’s unibody vehicles. Not to mention the engines have dropped to capabilities that don’t allow for much more weight than the vehicle itself. Then if you’re a family of 5 with car seats and seatbelt laws you need a full-sized width vehicle or must go up to a third row. With 4 kids a third row is basically mandatory to be legal. I doubt you’ve tried to sit in the back seat with a child car seat lately, but they are huge now and take up a full seat. Unlikely an 8-year-old can sit in the back seat of a CRV with two child seats.
So, although there are lots of trucks bought and you don’t see them haul or tow anything the laws are different from when you had kids and the selections have changed. You can’t hook up the camper to the Crown Vic it doesn’t exist. There are almost no station wagons. You can’t let 6 kids pile into the backseat. You do that today you ‘ll have Child services at your house threatening to take your kids from you for endangering them.
So, if you really want to blame people for the large vehicles they drive. Maybe consider their options are limited. and can’t afford to do like you and have multiple vehicles they can allow to just sit for only when they want to drive it. Sure there are a few childless couples that still prefer a truck but just like your Corvette they likely can afford it and just prefer that over other choices. How is that any different?
Lambo and others, it’s not just that I see a lot of trucks never hauling anything, but I know a number or people with trucks who haul things that could be hauled much more conveniently in a minivan or crossover, or station wagon, if you could buy one. They never tow, and do not have kids at home. If they did have kids, other vehicles would transport them more efficiently than a pickup truck. Face it. It’s the “truck culture,” as it were. I certainly agree that with a family of 5, especially if any of them need child seats, you need a third row.
Yes, I have more cars than I need, but in a few years, my cars in perfect condition will be sold, with the result that the same number of new ones will not be sold. In that regard, I guess I have borrowed future sales. BTW, I sold the Corvette recently. One sports car, the manual transmission base Cayman is enough, and the Mini is kind of sporty, and is an automatic, better for stop-and-go driving. Also, I sold the ’89 van about a year ago.
As far as towing, an Equinox has a tow rating of 3500 pounds. Yeah, it would be seriously sluggish towing that much, but would be fine for towing two dirt bikes on a trailer, with a weight of barely over 1000 pounds. My van, with a tow rating of zero has worked fine for towing a pop-up camper weighing over 1000 pounds.
OK, I guess I don’t understand how so many people “like” pickup trucks they have no use for. The now-ubiquitous “crew cab” trucks are almost 20 feet long, and have a hard time even making turns on some city streets. They don’t fit in a lot of older garages. They don’t fit in some parking places very well, and, of course, they are thirsty. The new ones are quiet and comfortable on the highway, and with the long wheelbase, tend to ride well. I understand the appeal of that.
I understand why Corvettes and Caymans don’t appeal to everyone. When people find sedans hard to get in and out of, they would find sports cars REALLY hard to get in and out of. Also, they ride kind of stiff, and are noisier than most other of today’s vehicles. The are fun to drive, though, especially in cornering, and I think they look good. Also, from my experience, they hold their value very well, though I guess pickups do too.
Kit- I have a Cadillac and a Ram and if going on a trip the wife and I actually prefer the truck. It is more spacious which helps the wife’s claustrophobia and rides just as nice and actually has more options being that its newer. The higher seated position gives a nice view of the road and on scenic drives provides a view over the now common cement wall barrier replacing the see through guardrails. Plus, if we happen to run across a great deal on something large we can likely fit in the truck and take it home.
Obviously, the truck is a preference for many, not out of necessity, that’s pretty obvious by the ever-shrinking bed size to accommodate the larger passenger cabin. Some trucks only have a 4.5′ bed now. However, for people like me I do tow an 8000 lb boat, I haul my fallen branches and yard waste to the nearby nursery and get topsoil by the 1/2 ton not by the bag. So mine gets used as a truck should. I’ve often thought about a smaller SUV and buying a trailer when I am hauling something messy or dirty like dirt or stone. But then I have to slip the boat and store a trailer and dont really gain anything. Considering the cost of a slip and gas I would save its cheaper to keep the truck.
Just saying it really depends on the situation and around the Michigan Ohio area most everyone I know with a truck has a boat, camper, sleds or bikes or they work in a profession where the truck is really needed.
Kit- You sold the Vette already? Oh how I wish I could get a C8. I’m hoping I can in the next two years.
I had the C8 about 2.5 years. It is a great car, but between the cost of insurance, etc., and that it will probably start depreciating at some point, and having the Cayman, it just made sense to sell it. I might end up getting another one sometime. There still seems to be a 6-12 month wait to order one at MSRP, probably much longer for a Z06.