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Runtime: 9:20
0:00 GM, Ford Hurt Most by Biden 100% China Tariff
0:46 U.S. Wants to Block China Imports Via Mexico, Vietnam
1:26 BYD Officially Launches Pickup in Mexico
2:20 8 OEMs Accused of Misleading Customers Over Data
3:21 Global Gasoline Demand Hits Pre-Covid Levels
4:38 Chevy Equinox EV Officially on Sale
5:17 Aiways Drops Out of Chinese Market
6:07 Genesis Opens More U.S. Stores
6:37 Inside Story: How Musk Fired Supercharger Staff
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GM, FORD HURT MOST BY BIDEN 100% CHINA TARIFF
The Biden Administration made headline news by slapping a 100% tariff on imported Chinese cars. But as the dust starts to settle on that announcement, it’s becoming clear that the companies that will be hurt the most are General Motors and Ford. They import the most Chinese cars into the U.S. The Buick Envision is made in China and is the second-best selling car in Buick’s lineup. The Lincoln Nautilus is the best-selling Lincoln by far, and it too is made in China. So now the question is, will GM and Ford raise the prices of those models, or just eat the tariff?
U.S. WANTS TO BLOCK CHINA IMPORTS VIA MEXICO, VIETNAM
Here’s another question about those tariffs. What happens if Chinese automakers start building cars in Mexico or Vietnam and start shipping them to the U.S.? Vietnam has a free-trade agreement with the U.S. So Chinese automakers could easily skirt those tariffs by making cars in Mexico and Vietnam and ship them to the U.S. Reuters and Bloomberg both report that U.S. officials are pressuring Mexico not to provide Chinese automakers with any kind of subsidies to build assembly plants there, and are looking at ways to block Chinese cars coming in from other countries.
BYD OFFICIALLY LAUNCHES PICKUP IN MEXICO
And right on cue, BYD officially launched its PHEV pickup truck in Mexico, priced at $53,400. Not only does the front-end kind of resemble a Ford F-150, it’s about $1,500 cheaper than a base Ford Lightning. BYD’s plug-in pickup, called the Shark, comes with dual electric motors, coupled to a turbo 1.5-liter IC engine. Combined they provide 429 horsepower. The truck has a 5,500-pound towing capacity and can carry an 1,841 pound payload. BYD says the Shark will compete worldwide against the Ford Ranger and Toyota Hilux, and the next place it debuts will be in Australia.
8 OEMs ACCUSED OF MISLEADING CUSTOMERS OVER DATA
Uh-oh. Did a bunch of car companies just get caught lying? Back in 2014, eight automakers signed a voluntary pledge for privacy standards and said they would only provide data to government entities with a warrant or court order. With cars becoming more connected and collecting more data, privacy is a real concern. Now, Democratic Senators Ron Wyden from Oregon and Ed Markey from Massachusetts, are accusing the eight automakers of misleading customers about giving vehicle location data to police. They say Toyota, Nissan, Subaru, Volkswagen, BMW, Mazda, Mercedes-Benz and Kia told lawmakers that they would provide data to police without a warrant or court order, and just with a subpoena. So the Senators are accusing the automakers of being misleading, and they wrote a letter to the Federal Trade Commission encouraging it to investigate the companies.
GLOBAL GASOLINE DEMAND HITS PRE-COVID LEVELS
Remember those pre-Covid predictions that EVs were going to cause a global oil glut by 2024? Well, it’s not happening. At least not yet. Bloomberg reports that global gasoline demand this summer will be higher than it was in 2019.
CHEVY EQUINOX EV OFFICIALLY ON SALE
Finally, the Chevy Equinox EV is on sale now in the U.S. The base version starts just under $35,000, not including destination charges. However, the base model won’t be available until later this year. The one you can order now starts just over $43,000. When Chevy first introduced the Equinox EV it promised a starting price around $30,000. But it does qualify for the full $7,500 federal tax credit, which drops the base price to about $27,500.
AIWAYS DROPS OUT OF CHINESE MARKET
The Chinese car market is so brutally competitive, that one car maker is throwing in the towel and is dropping out of the market. But it’s a Chinese automaker! Aiways. The company says it will now focus on Europe instead. Aiways sells two models, the U5 and U6 crossovers, but last year it stopped production because they weren’t selling very well. It also ran out of cash to cover operating and development costs. So, Aiways is planning to go public in the U.S. via a SPAC merger with Hudson Acquisition to raise money. But the company is only valued at around $400 million, which is chump change in the auto industry. And while Aiways won’t sell its cars in China, it’s still going to make them there.
GENESIS OPENS MORE U.S. STORES
Hyundai’s luxury brand Genesis, which is growing strongly in the U.S. market, is expanding the number of standalone dealerships it has. The brand recently opened 26 new dealerships, bringing its total to 35. By the end of the year, Genesis aims to have more than 40 standalone dealerships in the U.S. Genesis is looking to become more independent from Hyundai and the standalone dealers are part of that strategy. And undoubtedly, they will help boost sales.
INSIDE STORY: HOW MUSK FIRED SUPERCHARGER STAFF
There’s a fascinating story in Reuters that provides the inside story of how and why Elon Musk fired everybody involved with the company’s Supercharger network. It says those operations previously reported to Drew Baglino, a top Tesla executive who quit unexpectedly in late April. His replacement, Rebecca Tinucci, met with Musk to present her plan to greatly expand the charging network. When he demanded mass layoffs instead, she protested, so Musk fired her and the 500 employees in the business unit. Now, Tesla’s energy team, which handles solar panels and battery storage, will run the business. In the meantime, Tesla told vendors to stop breaking ground on any new construction for chargers and to halt buying any new materials. And it asked them to be patient during this period of change. Musk says he’s going to invest $500 million in his charging operations, but right now the whole thing looks to be a real mess.
Wow, what a day. Tariffs. Trade wars. Surging gasoline demand. Weak EV sales. Automakers lying about personal information. And continuing turmoil at Tesla. That’s a lot!
But it also brings us to the end of today’s report. By the way, if you haven’t done so already, would you please subscribe to our channel, or our daily email blast? Thanks, and we’ll see you tomorrow.
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OK, is the 100% tariff, or is it not only on EVs? Today’s show says it’s on all cars, but Automotive News said it’s on EVs.
John,
Is the tariff on new Chinese cars or does it also include used one. If the Lincoln or Buick involved is sold in Canada or Mexico, can it them be imported into the US as a used car? … asking for a friend :>
The BBC seems to say it’s EVs.
https://www.bbc.com/news/business-69004520
A tariff is a sales tax imposed by Presidential edict on us, the buyers. It directly boosts inflation and protects inefficient, uncompetitive companies.
As for Tesla, the 4680 team is next on the block because LiFePO batteries and chemistry have advanced faster, 20-30% cheaper per kWh, than the expected 4680 NMC cost savings. The only salvation would be a LiFePO ‘jelly roll’ in the can. The can has more useful properties than a flat cell that requires a much more expensive battery housing.
Kit,
Whitehouse website say EV.
FACT SHEET: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices
https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/
How many Envisions and Nautilus’s? What’s the damage?
Kate, Buick sold ~44,000 Envisions in 2023. Lincoln has been selling 20-30 thousand Nautiluses a year, but the new, Chinese one is an unknown.
All of that said, it appears that since Envision and Nautilus are not EVs, the tariff will remain what it has been, I think 25% for imports from China.
@John: great recap at the end of the show, John. And great show, as always!
Bob tariffs protect companies from others that dump goods at a loss to drive them out of the market. The Japanese did it in the 70s dumping cars on our shores at or under the cost to build them. Once they gained a good market share they upped the price . Tariffs keep predatory companies from just driving the competition out. We already know we can’t compete with their slave labor practices in China. Everybody wants cheap goods until it kills the company that they draw a paycheck from. I have already had that happen to my last job.
“Toyota, Nissan, Subaru, Volkswagen, BMW, Mazda, Mercedes-Benz and Kia told lawmakers that they would provide data to police without a warrant or court order, and just with a subpoena.”
Perhaps they are splitting hairs here. Since a subpoena has to be signed by a judge, and the requestor has to provide appropriate rationale, that seems very similar to a court order to me. I’m not a legal expert, but the companies may have a legitimate stance on this.
John raises the problem with the tax incentives for EV’s in his Equinox segment. GM said the vehicle would be 30K and maybe they could offer to sell it for 30K. However, with a 7500 tax rebate they’ll be asking 35K so the price still comes in at $27,500. Which yes is a reasonable price for a new vehicle. So is GM just inflating the price to let the rebate cushion their pockets or could they sell it for 30 and with rebates the base vehicle would be $22,500? Guess when the rebates run out we will see. When things got tight for Tesla they had no problem dropping a few grand off the price. Makes you wonder is the rebates helping customers afford EVs or manufacturers pad their pockets.
GM & Ford can build assembly plants in the US
I doubt if the Equinox EV will be a money maker even at $35K, with the sourcing requirements for the tax credit. I hope they can ramp up production better than they have for other GM EVs.
Kit, you’re right about the Equinox EV launch; GM needs to get this (one) right (after failed previous EV launches). It’s almost at a point that they don’t need to make that much money, just instill confidence again (that they can produce). Even Corvette production has suffered (granted, due to supple problems), but for goodness sakes; you’ve got to get at least some/most of your launches done correctly. And this being said that I’m a GM fan/enthusiast (since my youth; and I’m no ‘spring’ chicken). 😀
According to Bloomberg, There is a class action lawsuit against Tesla due to its claims that their vehicles are FULL SELF DRIVING. Tesla went on to say that the cars could drive themselves from LA to New York. The lawsuit states that because the requirement is that the driver stay alert at all times, it is not an autonomous system as Tesla was alluding to. The judge in the case has signaled that Tesla may be on the losing end of this lawsuit.
I for one am glad that people are taking Tesla to task over their inaccurate at best claims. Even more so over their wildly inaccurate marketing names like Full Self Driving which is meant to invoke that someone does not have to pay attention. Maybe Tesla will be ordered to rename FSD and AP as a result of this lawsuit. At least I hope it will. They can call it Fancy cruise control which is all it has ever been. I for one am tired of seeing dumb Tesla drivers sleeping, reading, fully immersed in their phones, and not even seated in the drivers seat because they were misled by Tesla that the cars can drive themselves. The fact that these people generally end up dead and hurting others in the process is not a good thing.
Toyota has a pretty nice looking EV truck coming out.
https://www.msn.com/en-us/autos/news/small-electric-toyota-pickup-looks-ready-to-take-on-ford-s-maverick/ar-BB1msY37?ocid=hpmsn&cvid=46e5eb8b9dcf463986257f0082dcecf8&ei=73#comments
My understanding is the quadrupled tariff applies to Chinese-made EVs. The Buick Envision and Lincoln Nautilus would not be impacted by this new EV tariff – though even if so, would it be business as usual applying the Duty Drawback program?