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Runtime: 11:18
0:00 Ford Won’t Create Any New UAW Jobs
1:22 Barra Wishes Software Effort Started Earlier
2:11 Tavares Says Stella’s EVs Already Profitable
2:57 Stellantis To Cut Inventory & Incentives
3:40 Rivians Teases Peek-A-Boo Look at R2
4:40 Scout Motors Starts Building U.S. Assembly Plant
5:18 S. Korea EV Subsidies Help Hyundai, Hurt Tesla
6:13 EV Sales Shot Up 23% In December
7:13 Tesla Uses Battery Age for Range Estimates
8:00 What If We Don’t Need A Hydrogen Infrastructure?
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
FORD WON’T CREATE ANY NEW UAW JOBS
Ford’s Jim Farley fired a warning shot past the UAW yesterday. Speaking to the investment community at Wolfe Research Global Auto Conference, he said Ford will now have to think very carefully about its manufacturing footprint. Here’s our own translation of what that means. Ford builds more vehicles in the United States and employs more UAW workers than General Motors or Stellantis. From a cost standpoint, that puts Ford at a competitive disadvantage. But from a union relationship standpoint, it’s paid off handsomely, with the company avoiding UAW strikes over the last 40 years. However, that all changed last year, when the union struck Ford’s most profitable plants which the company says cost it $1.7 billion in lost profits. So we think that going forward, Ford will rebalance its manufacturing footprint, with more production going to Mexico and Canada. And we would bet that the low-cost EV Farley’s been talking about is definitely not going to end up in any UAW plant. He says any new EV that Ford comes out with has to be profitable within 12 months.
BARRA WISHES SOFTWARE EFFORT STARTED EARLIER
GM’s Mary Barra spoke at the same conference that Farley did. She talked about a lot of things, but one that stands out is that she wished GM had spent more time in planning and risk assessment before it plunged into making electric vehicles. Barra also said she wished she had built up GM’s software team earlier. Right now, GM is running into a string of embarrassing glitches with the software in some of its EVs and even some of its ICE trucks. Last May, GM hired Mike Abbot from Apple, and he brought in a team of software engineers from Google, Apple and Meta to change the way that GM does software development. Barra says this will be a year of execution for GM, both with software and electric vehicles.
TAVARES SAYS STELLA’S EVs ALREADY PROFITABLE
Carlos Tavares, the CEO of Stellantis, wasn’t at that Wolfe Research conference yesterday. But he did have a lot to say to investors and the media after the company released its 2023 earnings. Unlike GM and Ford, he says Stellantis is not cutting back on its EV investments. He says they’re going full speed ahead. In fact, Tavares claims that the EVs Stellantis sells are already profitable. Not as profitable as the company’s ICE vehicles, he admits, but getting closer. Stellantis is only just getting ready to sell its first EVs in the U.S., but in Europe last year it sold over 144,000 electric Opels, Peugeots, Fiats and Citroens.
STELLANTIS TO CUT INVENTORY & INCENTIVES
Speaking of Stellantis, it has an inventory problem in the U.S., as in too much of it. According to Cox Automotive, the industry average days’ supply is 70 days but Chrysler and Dodge have at least twice that and Jeep and Ram are also well above the average. So, to help fix that, WardsAuto reports that Stellantis is aiming to reduce inventory by one-third through incentives and repricing some high-volume models. And the automaker says dealers are on board with this goal. Stellantis has already started lowering prices of models to help boost sales and it says it plans to do so for the models that make up the majority of Jeeps volume.
RIVIANS TEASES PEEK-A-BOO LOOK AT R2
Rivian teased its new R2 model that will be unveiled on March 7. It will open up reservations, which is a fully-refundable $100 deposit during the livestream reveal. Prior teaser images show that it will likely be a small SUV and Rivian has said the model will cost between $40,000-$50,000, about half of its current models. The R2 is also expected to qualify for the $7,500 federal tax credit, which means its starting price could be as low as $32,500. That’s about all the details we have for now but we’ll learn more about the R2 in just a few weeks.
SCOUT MOTORS STARTS BUILDING U.S. ASSEMBLY PLANT
Scout Motors broke ground on its brand-new plant in the U.S. and we’re learning more details about the company’s plans, but it’s probably still going to be 3 years before we see a production vehicle on the road. The plant in South Carolina is located near highways, shipping ports as well as major cities and will produce premium off-road trucks and SUVs for the VW-owned brand. At its peak, it will be able to make up to 200,000 vehicles a year. Actual production is targeted to start at the end of 2026 and retail sales will kick off soon after.
S. KOREA EV SUBSIDIES HELP HYUNDAI, HURT TESLA
South Korea changed up its policy for EV subsidies and it helps out Hyundai and Kia. Part of the new requirements go after higher prices, lowering the cap by $2,000 to $41,000. But several companies, including Tesla quickly slashed prices to still qualify for some of the incentives. But South Korea also slashed subsidies for EVs with low-performance batteries, like LFP, which are used by Tesla and BYD. The maximum incentive is roughly $4,800 and in some cases Hyundai and Kia EVs now have a cost advantage of thousands of dollars. However, if this really has an impact on companies like Tesla and BYD, it would be naive to think that they couldn’t just easily make the switch to a different battery type.
EV SALES SHOT UP 23% IN DECEMBER
Despite the slowdown in EV demand, it is still the fastest growing segment in the U.S. market. According to S&P Global, EV registrations were up 23% in December and accounted for 8.8% of the overall car market. But that growth didn’t come from the top three EV brands in the U.S., Tesla, Ford and Chevy, it came from other brands. Tesla registrations were up just 11% in December, Ford was up 13% and Chevy was down 26% because it stopped building the Bolt. Meanwhile, Hyundai’s EV registrations shot up 62%, Rivian was up 73% and BMW’s increased by 86%. Those three brands are now 4th, 5th and 6th in EV registrations. Overall, last year EV registrations in the U.S. were up 52% and accounted for 7.7% of the market.
TESLA USES BATTERY AGE FOR RANGE ESTIMATES
There’s a ton of factors that determine your actual driving range, no matter what powertrain type your vehicle has. And EV makers continue to make improvements to their range calculators, so owners can more accurately game plan their charging. In addition to adding things like headwinds, crosswinds, humidity, ambient temperature and tire pressure into its calculation, Tesla recently updated the system so it considers the age of the battery as well. The update also added a new feature that shows how much pre-conditioning time the battery needs before going to a charging station, which could be a response to all those owners in Chicago who thought their cars were broken when they tried charging in below freezing temperatures without pre-conditioning.
WHAT IF WE DON’T NEED HYDROGEN INFRASTRUCTURE?
Hydrogen fuel cell vehicles will never catch on until there’s a hydrogen infrastructure to supply the fuel. But what if you didn’t need a station on every corner? On Autoline After Hours yesterday, Larry Burns, the former head of R&D at General Motors, talked about a radical new way of delivering hydrogen that doesn’t need much infrastructure.
(The AAH clip is only available in the video version of today’s show.)
By the way, when Larry talks about the 700 bar of pressure used in today’s hydrogen fuel tanks, that translates to 10,000 psi. And the 50 bar of pressure in these new graphene tanks translates to 720 psi. You can catch that entire interview right now on our website and YouTube channel, and we talked about a lot more than just hydrogen.
But that brings us to the end of today’s show and this week. Thanks for tuning in and I hope you have a great weekend.
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Larry’s been drinking the kool-iad again!
As great as the R1S and T are, the one missed opportunity it seems, was the high reach over in the frunk (the Volvo EX90 it would seem missed that boat too!). Hopefully, the R2 and future versions of the various R1 models will address the oversight with the engineering expertise that the company is known for!
If new graphene tanks can be perfected and made cheaply it would simplify the storage and transportation of hydrogen, but it still does not solve the underlying problem. We do NOT have an efficient and cost effective way of making hydrogen.
Then there is the problem that hydrogen proponents don’t want to talk about. Hydrogen is the smallest atom. No matter what you do there are going to be seepage/leaks. If we start to make massive amounts of hydrogen those leaks add up. Hydrogen interacts with methane and makes it last a lot longer. Methane is a global warming gas that is worse than CO2.
The UAW seems determined to regain the unreasonable wage and benefit levels that it had when it drove the Big 3 to bankruptcy (even though Ford narrowly avoided it). With the Chinese queing up just south of our border and soon ready to flood our market with inexpensive EVs, once again the UAW has its market blinders on and is not working WITH the auto companies that it likes to call partners to achieve a winning strategy. Mr Fain may not have the corruption trappings of past UAW leaders, but he carries forward with the “UAW win at all costs” attitude that will be their undoing. I hope the members are investing their bonuses and higher wages well so that they have a nest egg when their plants begin to close.
It’s too bad the Scout will likely be a very expensive SUV. Hopefully they offer something to compete with the Wrangler and now Bronco like a removeable top otherwise it will just be another retro-styled vehicle that drowns in the sea of SUVs. Sales will peak its second year and then drop off until its canceled by its 5th year.
The Larry Burns roundtable was fascinating and thought-provoking. He is indeed one of the best auto industry futurists or “imagineers”. John also came out with some very interesting stats and trends that give one pause, and should make anyone wonder about the future viability of the US automakers.
I agree. From what we know about the Scout business plan so far, it seems like it will be too little, too late and too expensive. Scout made its reputation as a basic truck or SUV that was tough as nails. Luxury was not their brand. I’m not saying that brand character cannot be changed or modified, but the luxury SUV EV space is pretty crowded already and will only be more so by the time they are ready to start production. This could end up as another industry lesson in what not to do from the team in Wolfsburg.
I hope VW has plans for that Scout plant after the first year or two. I suspect Jeep and Bronco have the off-road, and off-road poser market pretty well covered, and not many people even remember Scout. If they have a small, less expensive version with removable top and doors, that would separate them from Wrangler and Bronco non-sport.
I just saw an update that the UAW has set a strike deadline for Feb 23 at Ford’s Kentucky truck plant. Its Ford’s most profitable plant and one that the UAW struck just a few months ago. They have been negotiating for five months on some local issues that fall outside of the national contract but have not reached agreement yet. I’m sure two strikes in one year at that plant won’t improve Ford management’s view of their relationship with the UAW.
VW has done everything they can to reinvent themselves, at least for the US market. I’ve had several VWs over the years, an air cooled beetle, a GTI VR6, a Passat wagon, and most recently, a Jetta TDI wagon. Now, all they have in the US market that appeals to “traditional” VW fans is the GTI, and I’ve read that it will now be automatic only. They have the Golf R, but ~$46K base is a lot for a Golf. We shall see what happens with Scout, and the new microbus, if it ever actually arrives.
The best is when you fill up in your garage and leave with a “full tank” every morning. Nothing will top that convince and low cost.
Norm- Id say NOT adding 6 hours to a trip to Florida will top that.
Norm,
That is a benefit for those who have that option available. Those in apartments, which is a vast majority of people, do not have that option available to them. Thus it is not a selling point for those people as they will need to go to a central charging station just as they do today with ICE.
I would not want to use an EV for my trips between Indiana and Florida, but while I’m in Florida, an EV would work for essentially all of my driving, even with just a 120v outlet providing 3-4 miles per hour of charge. Most days, I drive between 3 and 15 miles. Twice a week, I do a round trip of about 50-60 miles. My condo, like many in my area, does not have charging available. A 200 foot extension cord from my 3rd floor apartment is not practical, so no EV for me.
I take it US EV growth was YOY, but it would be good to expressly say so. Thanks!
Interesting that Stellantis makes a profit on EVs – in Europe, its companies are solidly mass-market, skewed towards the affordable. On the other hand, I’ve been wondering how it seems that some legacy companies struggle so hard, given the cost of a decent-size battery pack, plus motors and ancillary components, must come in below $10K now.
Addendum: 10K Euros more like it. For a US mid-market EV like the Model Y, I’m guessing closer to $15K. And trucks take that significantly higher again.
Sean, aren’t Stellantis’ best selling EVs in Europe Fiat 500, Opel Corsa and similar? I’m surprised they make money with them. They’d be inexpensive to buy, but must have small batteries, keeping the cost down.