AD #3784 – Tesla Slashes Prices to Unload Inventory; Ford Delays Key EV Launches; 57 Global Sites = 80% GHG Emissions

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

FORD DELAYS KEY EV LAUNCHES
Ford is facing up to the fact that it overinvested in EV capacity and is going to delay two significant launches by at least a year. It is slowing construction of its giant new assembly complex in Tennessee called Blue Oval City. That plant will build next generation full-size electric pickup trucks, but the launch will be delayed by a year, and the ramp-up to line speed will be deliberately slow. It’s also delaying the launch of its 3-row electric SUVs in Oakville, Canada by two years. Ford says that will give the market for these vehicles time to develop. In the meantime, it’s making a big pivot to hybrids. Ford says it will offer hybrid powertrains across its entire lineup by the end of the decade.

TESLA SLASHES PRICES TO UNLOAD INVENTORY
Well here’s a headline we never thought we’d see. Tesla is offering big discounts to try and sell off excess inventory. As we reported on Wednesday, Tesla ended last quarter with more than 46,000 unsold cars, and so it’s slashing prices to move the metal. It’s cutting the price of Model Ys anywhere from $4,600 to $5,000. Tesla blamed its slowdown in sales on model changeovers and an arson attack on its plant in Berlin. But Bloomberg reports some Wall Street analysts aren’t buying it. They say that excess inventory is a problem of building too many cars and not getting enough customers, and is not related to any production problems.

TESLA TARGETS INDIAN MARKET
One way to boost sales is to get into new markets and Reuters reports that Tesla will start making cars in Germany with right hand steering that will be exported to India. Automakers can import up to 8,000 cars a year in India with a 15% tariff applied to them as long as they will invest at least $500 million in an assembly plant to start making cars there. Otherwise, the tariffs on most imported cars is 100%. Interestingly, up to now, Tesla has been exporting right hand steer cars from its plant in China. But India was probably not interested in importing Chinese-made Teslas. So they’re coming from Germany, instead. One source tells Reuters that Tesla is already sourcing parts made in India and wants to reduce parts coming from China.

INDIA EV SALES, SMALL BUT SURGING
And no wonder Tesla is turning to India. Sales of EVs there shot up 66% in the first quarter. Last year sales of 4-wheel EVs hit 75,000 units. That’s a modest number, but it’s growing fast. And India is going crazy over electric vehicles. When you include 3-wheeled vehicles and rickshaws, total sales last year hit 1.5 million units. So that’s getting people used to the idea of plugging in.

INSURANCE IS PRICEY FOR EVs IN CHINA
Sales of EVs are slowing in China and here’s something that could hurt demand even more. Bloomberg reports that many EV owners in the country are taking to social media to complain about high insurance costs. One owner says that their renewal premium increased even though they were never in an accident. And others say they’ve been rejected by insurance companies because long daily commutes are seen as a high-risk factor. Premiums are higher for EVs because they cost more to repair because the parts are more expensive. And there are fewer qualified technicians to repair EVs. According to S&P Global Ratings, EV premiums are anywhere from 20% higher to double insurance costs for ICE vehicles in China.

STELLA TO BUILD CHINESE EVs FOR MALAYSIA
At first China needed help from Western automakers to learn how to make good cars, but now it’s the other way around. Stellantis owns 51% of a new joint venture partnership it formed with Chinese automaker Leapmotor, called Leapmotor International. This will eventually land it shared EV platforms that produce vehicles with Stellantis brand logos on their grilles. But the plan for now is to make Leapmotor EVs in a converted Stellantis plant in Poland that will be sold in Europe and other parts of the world. Those other parts also include Malaysia. Stellantis revealed its plans for the country, which will see it introduce Citroen as a mass market brand, Peugeot will fill the Upper Mainstream segment and Jeep will be marketed as a recreational and lifestyle vehicle. But it showed it will also bring Leapmotor as an Affordable EV, which would likely be the T03, a small, A-class car with a starting price in Europe around 20,000 euros. Stellantis CEO Carlos Tavares has said tariffs won’t save Western automakers from their Chinese rivals, so they need to learn how to compete. One way he plans on doing that is by making cars with Chinese tech.

U.S. Q1 SALES UP 5.1%
All automakers have reported their sales for the first quarter in the U.S. and here are the final numbers. According to GlobalData, 3.75 million vehicles were sold in Q1, a gain of 5.1% compared to a year ago. General Motors was the top seller, with just over 590,000 vehicles sold. Toyota was second at 565,000 units, which is an impressive 20% gain. Ford was next with 504,000 sales. Then there’s a drop off to the Hyundai Group at 379,000 sales. And Stellantis barely eked out Honda with 334,000 sales, which was just 1,000 more.

DISNEYLAND AUTOPIA DUMPS IC ENGINES
Disneyland’s Autopia is an amusement ride designed to let little kids drive a car. It’s been around since 1955 when it first opened and Honda has sponsored the ride since 2016. The cars use an 8.5 horsepower version of its iGX engines and have a maximum speed of 6.5 MPH. Well that was then. Autopia announced it’s ditching the gasoline engines and going electric. Disneyland didn’t say when it will make the switch and it didn’t confirm if the cars will be fully electric or hybrids, but it’s the perfect application to go fully electric. The cars are always stopping and going and will bunch up as families wait to get on, which can get kind of stinky as you’re standing there. So, great move! 

57 GLOBAL SITES = 80% GHG EMISSIONS
The auto industry is heavily scrutinized over CO2 emissions and bears most of the brunt in government regulations. But a new report shows it’s other industries that produce the vast majority of CO2 emissions. The Carbon Majors report from the think tank InfluenceMap says a group of 57 fossil fuel and cement makers produced 80% of the world’s CO2 emissions between 2016 and 2022. The top three were Saudi Aramco, Russia’s Gazprom oil company and Coal India. And the report says most companies have increased fossil fuel production since 2015 even though governments and companies have set tougher emission targets and increased use of renewable energy.

BMW BRINGS M5 WAGON TO U.S.
If you live in the U.S. and are a fan of performance station wagons, today is a good day for you. For the first time ever the M5 Touring will be sold in the country. For now, we have a few camo pictures to go on and we can tell you it will feature a hybrid powertrain that’s closely related to one found in its V8 GTP race car. BMW says production starts in the 4th quarter of this year.

NIKOLA BEATS SALES ESTIMATES
While the numbers are still small, Nikola sold more versions of its hydrogen-powered semi-truck than analysts thought it would in the first quarter. Forecasts had it making 30 trucks, but Nikola said it built 43 at its plant in Arizona and sold 40 of them. And it says the remaining three have already been allocated and will be delivered this month. Plus, as it continues to build out hydrogen refueling stations, it expects sales to grow even more throughout the year. As for its battery electric trucks that it had to recall last year due to a fire risk with the battery, Nikola says it’s starting the return process back to customers. 

But that brings us to the end of today’s show and this week. Thanks for tuning in and I hope that you have a great weekend.