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Runtime: 12:09
0:00 Rivian Delays Georgia Plant
2:15 U.S. New Car Inventory Grows To 2.8 Million Units
3:13 Huawei Rockets Up China Sales Charts
4:10 Tesla Owners Lose Class Action Lawsuit
5:24 Apple Spent $1 Billion A Year on EV Project
6:35 MG Takes on Toyota & Renault In Europe
7:31 Rimac Says Tesla Roadster 0-60 MPH Time Is Possible
8:22 VW, Honda & Nissan Launch New EVs
9:18 Generative AI to Have Huge Impact on Auto Industry
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
RIVIAN DELAYS GEORGIA PLANT
Rivian just bought itself another year of survival. About two weeks ago we dug into Rivian’s financials to find that it has $7.8 billion in the bank, but that it spent $3.7 billion last year, which means it would run out of cash in just over 2 years at its current rate. However, Rivian announced that it’s delaying its all-new plant in Georgia, which is going to save it $2.25 billion. Instead it’s going to build its new models at its current U.S. plant in Normal, Illinois. The site churns out the R1T and R1S right now and the company expects to make about 57,000 examples this year, but it’s boosting that capacity to 215,000 units. Those new models include the anticipated mid-size R2 SUV, but Rivian also had a bit of a shocker with a slightly smaller R3 model. Both vehicles have the same lighting signature as its current EVs and the R2 looks more like a baby version of the R1S, but the rear end treatment of the R3 is completely different, which we think looks more like an old European hatchback, like the Volkswagen Golf. Rivian is utilizing a new platform for these models that takes advantage of an all-new 4695 battery cell that will provide over 300 miles or 482 kilometers of range. That’s for versions with the bigger pack, which will also be able to do 0-60 in under 3 seconds. It’s not giving any estimates for the small battery, but Rivian does say the R2 will start around $45,000 and that the R3 will be priced below that. Other highlights include the NACS connector installed right into the vehicle and Rivian says they’ll have “dramatically enhanced autonomous capabilities.” While the company is taking $100 refundable deposits for the R2 today, it’s not starting production until the first half of 2026.
U.S. NEW CAR INVENTORY GROWS TO 2.8 MILLION UNITS
Well, it looks like they just can’t help themselves. Remember how Covid and the chip shortage led to a drop-in production, that led to tight inventory, that pushed up prices, that led to record profits? And remember how automakers said they would maintain production discipline and never let inventory levels go back to where they were before? Well, you and I remember, but apparently, the car companies do not. According to Cox Automotive, there are now 2.8 million vehicles sitting on dealers’ lots or waiting in marshaling yards to get shipped. That’s a million more than there were at this time last year, and it translates into a 78 days’ supply. The good news is that this means there’s plenty of product for car buyers to shop for, and that we’ll see more sales incentives to move the metal. The bad news for the automakers is, this will hurt their margins.
HUAWEI ROCKETS UP CHINA SALES CHARTS
Except for Tesla, EV startups in the U.S. are all struggling right now, and there’s a similar story going on in China. NIO and XPeng are having trouble selling cars and are losing money. But Huawei, the giant cellphone company that makes cars under the Aito brand, is rocketing up the sales charts. To give you an idea of how well it’s doing, last month Tesla sold, not made, but sold 30,000 cars in China while Huawei sold 21,000, and Huawei is just getting going. It’s kind of hard to figure out what’s really going on in the car market in China right now. Sales plummeted in February because of the Chinese New Year holidays. But they were also down in January. And we probably won’t have a clear idea of how things are going until we can compare the first quarter of this year to the same time period from last year.
TESLA OWNERS LOSE CLASS ACTION LAWSUIT
Tesla owners who filed a class action lawsuit against the company accusing it of falsely advertising vehicle ranges, have to find another avenue to seek damages. The California judge that made the ruling said the owners must go through individual arbitration with the automaker instead of the class action suit because they had agreed to an arbitration process to resolve disputes when they bought their vehicle. The owners claim Tesla misled them by overstating how far its vehicles can drive on a single charge and they say driving ranges on the vehicle’s dashboard were inaccurate. Tesla says the claims don’t have any merit. But it’s not completely off the hook. The judge didn’t rule on the merit of the claims and didn’t dismiss the lawsuits and says an injunction can be filed against Tesla if owners win their arbitration cases.
APPLE SPENT $1 BILLION A YEAR ON EV PROJECT
Last week, it was revealed that Apple canceled development of its electric vehicle. And now Bloomberg is reporting some really interesting details about it. The biggest revelation was Apple had discussions with Mercedes, Ford, BMW, Volkswagen, Tesla, Canoo and McLaren about partnering up. But it ultimately decided to build the EV on its own. Called Project Titan, Apple spent about $1 billion a year on the program, which was launched in 2014, but it never got to the point of testing vehicles on public roads. The company had planned to launch the vehicle in 2020, but by that year, it was still at least five years from being production ready. And its price tag was higher than anticipated. Apple originally wanted to sell the EV for $85,000 but estimates put the cost of production at $120,000. One other interesting tidbit not related to the EV project that Bloomberg reported is that then CEO Steve Jobs proposed buying General Motors in 2008 when it was going through bankruptcy.
MG TAKES ON TOYOTA & RENAULT IN EUROPE
There’s a lot of talk about Chinese EVs flooding the EU car market but MG, which is owned by SAIC, says it’s aiming to take on the small hybrid segment in Europe. MG’s head of sales in Europe told Automotive News that “we aim to break the monopoly of hybridization in Europe.” By that, he means MG is going after Toyota and Renault which control 86% of the small hybrid segment in the region. MG is launching the MG3 this summer to take on the Toyota Yaris and Renault Clio hybrids. The MG3 will start at less than 20,000 euros, which is around 4,000 euros cheaper than the Yaris and Clio. MG says it expects to sell more than 300,000 vehicles this year in Europe thanks to the MG3. Last year it sold just over 231,000 vehicles, which was double the year before.
RIMAC SAYS TESLA ROADSTER 0-60 MPH TIME IS POSSIBLE
With one of the fastest EVs that you can buy, the CEO of Rimac knows a thing or two about electric performance. And he thinks it’s actually possible for the new Tesla Roadster to hit Elon Musk’s claimed sub 1 second 0-60 time. But Mate Rimac says it comes with a lot of downsides as well. His team has done the simulations and with thrusters it is possible to go from 0-60 in under 1 second, but it also requires extra tanks, compressors, valves, nozzles and the EV needs massive motors, inverters, gearboxes and driveshafts. So you would be carrying around a lot of extra mass most of the time. It’s going to be interesting to see what Tesla has in store for its end of year reveal as long as it’s not delayed again.
VW, HONDA & NISSAN LAUNCH NEW EVs
Several new EVs are launching. We’ve reported on all these models in the past, so we’re going to go through them kind of quickly. Volkswagen is kicking off sales of the new station wagon version of the ID.7 in Germany. It will carry a starting price of a little under 55,000 euros. Honda says both the Prologue and Acura ZDX will qualify for the full EV tax credit in the U.S. with deliveries starting in the next few weeks. Before those incentives, the Prologue starts at $47,400, while the ZDX starts at $64,500. And lastly, the NISMO version of the Ariya, which has up to 320 kW or nearly 430 horsepower, is now going on sale. Unfortunately, we only know of it being sold in Japan for now, where it has a starting price of about $57,000.
GENERATIVE AI TO HAVE HUGE IMPACT ON AUTO INDUSTRY
Affordability of new cars is one of the big issues in the auto industry. Everyone is complaining about how expensive cars are. So how can automakers find new ways to cut costs? That was the topic on Autoline After Hours yesterday, and Chris Thomas, now a consultant to automakers, pointed out that generative AI is already starting to have a big impact.
Chris Thomas: “Generative AI is probably going to make as big a difference in the automotive industry as computer aided design did, and going from drafting tables to designing on the tube. And probably as big as the internet. Probably as big as those two things combined. I know suppliers today who are using generative AI to do quotes. So it used to be, an OEM puts out a request for quotes, and a sales guy will spend three days putting together a quote. And then he goes to his boss and there’s a bunch of stuff wrong, and he goes back and forth, and three weeks later they come up with this quote. Well now, with generative AI, you can point to the last 300 quotes you’ve done, that went out the door, and you say ‘Do a quote for company X, at this volume, for this part, and it will be made in this plant.’ And generative AI will take everything that’s been taken into account in the past and do that quote. And it will be 99% right in 10 seconds. So think of all the improvements that are going to be made through the supply chain. I mean, there’s so many places it’s going to be used.”
You can watch that entire show right now on our website and YouTube channel, and while the conversation goes all over the place, there’s some great insight into how the auto industry will work on ways to make cars more affordable.
But that’s the end of this show and this week. Thanks for tuning in and I hope you have a great weekend.
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So much inventory, but no Priuses or Siennas at the Toyota dealer near me.
It’s looking like it will be another very boring F1 season, at least at the front of the pack.
The capacity of the Rivian plant when it was operated by Mitsubishi was 240,000 cars per year. It is amazing that with 3 shifts and three times the workforce, Rivian was only able to build 57,000 vehicles last year. Yes, they will make great progress if they can build the same 57,000 units this year using only two shifts, but even with the differences in the build process between ICE and EVs, its amazing that the company has not been able to build more vehicles per year after all of the work they have done to increase capacity. And, now yet another investment in order to build the new R2 and R3 models. It’s hard to see how long it will be before they can break even.
Climbing inventory levels: I recall those stories of automotive executives that had seen the light and would never allow inventory levels to approach those old levels again. Their claims of newfound discipline were admirable, if not very believable. I also recall my comment at the time that they will never really have that type of discipline. So, I hate to say I told you so, but . . . I told you so.
Don’t UAW workers get paid, even when laid off? They did years ago. That could be part of why they keep building vehicles, letting them pile up. The trouble is, someone has to pay “floor plan” on them, and the more inventory there is, the more incentives they need to pile on. At some point, everyone would be better off if they’d cut production.
I looked up inventory at the Ford dealer nearest me, and they have 40 F-150s, 6 Lightnings, 6 Mach-Es, and surprise, surprise, zero Maverick hybrids.
The R2 looks great, but on another site, it has pictures of the open front trunk, which today’s report doesn’t have. The only issue I ever had was with the front trunk. It had a high lift over! Instead of addressing it with the R2, they kept and moved the frunk deeper into the body of the vehicle, closer to the base of the windshield. Noe you have to not only reach up and over, but now farther back into the vehicle as well! This is just a small quibble and knit pick, but with a new, clean slate design, it’s hard to miss. Maybe this was done for trash test worthiness, but the Lightning, REV and the Silverado BEV was able to address this with no problems. I sure no one is loosing any sleep over this and this will not keep another from purchasing or leasing a R2!
Today’s report and other outlets have called the R2 a midsize vehicle, implying that the R1 series, are full size vehicles. To my eye, the R1 series are closer to, if not in fact, midsize and the R2, with it being close in size to the Model Y, a compact vehicle. The R1S looks to cover the space of the GLS, X5, EX/XC90 and other vehicles of that size, which are midsize vehicles.
It seems that Rivian caught a number of individuals by surprise with the R3 and R3X! I’ve read a number of articles about the R2’s introduction, with a lot of auto journalists thinking (hopefully), that they would produce a pickup, or R2T, along with the R2. IMHO, it was better that they went with a smaller vehicle (subcompact?) then a four door truck version of the R2. For one reason, the smaller, less expensive truck would no doubt steal sells from the R1T, with them being marketed to much the same customer base. With that being the case and the R1S going to eventually be the stronger seller of the two R1 series, an R2T would only hurt the R1T even more. Twinning the R2 with the R3, would seem the logic choice, for a smaller SUV would sell more the an R2T and put much need cash flow to Rivian’s bottom line. Once the R3 comes to market, perhaps Rivian will direct attention to adding an R2T and R3T.
The R1S is about midway in size between the mid-size Highlander and XL Tahoe in exterior and interior size. As far as liftover for the frunk, maybe you are supposed to put your water softener salt in the back, and lighter weight stuff in the frunk. I don’t find the liftover for the frunk in my Cayman to be a problem.
@Kit,
As I get into F1 more and more and ignoring (and recognizing) the lack of racing at the front, the mid-pack shuffling still interests me (like NASCAR used to). If they let Andretti in, I would be even more ensconced; so, I’m still hoping for a reversal on that poor, self-serving decision.
Kit — First of all let me say this, as was mentioned before, it was just an observation at a potential missed opportunity and by no means a complaint or marks against the R2. As much as the frunk is a “wow” factor at what automakers can do with EVs that can’t be done with ICE vehicles, the truth of the matter, they are unnecessary! What I mean by that is, if you are not driving a vehicle with a rear mounted internal combustion engine, in most vehicles today, there is no ability to store things under the hood, but the engine. That said, when you compare the lower reach over of most trunks and hatches areas of vehicles today, especially those that are big, wide and deep, having a lower entry pointy is a plus! Especially, for those with lower upper body strength, needing to pick up a somewhat heavy bag, to put in or take out of a vehicle with a high reach over could prove be annoying to some, or a challenge for others. As great of an opportunity a frunk could be, in demonstrating all that could be done with this new type of transportation, in this case there was the potential to make it that much more convenient for its users. I am sure it will not be a deal breaker for those wanting this vehicle! It also provides rivals an opportunity to build on with there vehicle, too! When competition is good, the consumer wins!
Chuck, yeah, their not letting Andretti in is truly self-serving, as if there is something sacred about 10 teams. There were 12 teams when I first started following F1.
wmb, I agree that low can be good. That is why an A/C contractor I know got a Promaster van over a Transit. The floor of the Promaster is much lower, an especially good thing if you are going to walk in and out of the van, sometimes carrying heavy items. As far as the frunks in EVs, yeah, lower would be more convenient some of the time, but I suspect there are structural compromises. We’ll see how it sorts out as more EVs hit the market.
Re: UAW workers getting paid when laid off – Not sure if it’s still the same, however, as you advised they used to be. I would always consider labor as a semi-fixed cost since there was a labor cost whether they were building vehicles or not.
Heck of an F1 race this weekend, and while I don’t like street circuits as a whole, this one provided a lot of racing action. The most lauded event in my opinion was Bearman’s performance for Ferrari; eighteen-year-old, first-time racing in F1 and scores points with a 7th place finish. Heck even Haas scored a point for a tenth-place finish. Pretty good racing in the mid-pack for sure.
Another race for this weekend:
Out of Spec doing a Cybertruck vs. R1T vs. Lightning vs. Silverado EV cross country race. Who wins?
[@tesla motors club] https://tinyurl.com/mr2e256n
I only saw part of the race, and on a very small screen, but yep, Bearman was very impressive. I can think of a couple drivers he should replace immediately, but, of course, that can’t happen. Good racing mid-pack. I wish someone could compete with Red Bull at the front. Maybe next year. Alpine sure seems to have gotten something wrong with their new car.
Sean, am I missing something about the EV truck “race”? I can’t find anything about the route or much else, just a twitter, er. ecks thread with peoples’ predictions about the outcome. Is there a link about the actual event? Thanks.
First look from Top Gear on the Cadillac Celistiq: video (approx. 20 minutes), if interested: https://www.youtube.com/watch?v=SnkIVRSshJA
Kit, I haven’t found anything of the like, and updates are pretty sparse. A pity.