AD #3836 – D3: Get Out of China, ASAP!; Ferrari EV To Cost €500,000; Tyromer Can Recycle Any Tire

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

D3: GET OUT OF CHINA, ASAP!
Detroit’s automakers should get out of China ASAP says Wall Street Bank of America analyst John Murphy. He says the price war there, the surge in Chinese EV automakers and other factors mean that GM, Ford and Stellantis will struggle to make a profit. Murphy says they’d be better off concentrating on areas where they can make money and invest that money in electric vehicles. China used to be GM’s largest market. It sold more vehicles and made more profit than anywhere else. But not anymore. GM’s sales in China have plummeted and it actually lost over $100 million there in the first quarter. Ford lost $600 million in China last year. And Stellantis only sold 69,000 vehicles in 2023. But it’s unlikely the Detroit 3 will abandon China anytime soon. GM says it’s an important part of its growth strategy. Stellantis is using Leapmotor as the core of its EV offensive. Ford is likely to leverage its relationship with Changan for lower costs. And they’re all using China as a major export hub.

AKIO TOYODA SEES SLIPPING SHAREHOLDER SUPPORT
Toyota chairman, Akio Toyoda, easily won re-election from shareholders. But he’s losing support. In 2022, 96% of shareholders supported his election as chairman, last year that dropped to 85% and this year it slid to 72%. While any politician would call 72% approval a landslide, it’s shockingly low for any Japanese chairman, and especially one named Toyoda, who is the grandson of the company’s founder. Analysts say it’s foreign investors that are unhappy with Akio’s leadership. And some of those investors recommended against re-electing Akio due to governance concerns and vehicle certification testing scandals in Japan.

CHINESE OEMs CALL FOR EU IMPORT TARIFFS
Not surprisingly, Chinese automakers are not happy about the EU slapping tariffs on their EVs made in China. And now state media reports out of China say that Chinese OEMs are urging the government to retaliate. They want higher tariffs on imported European vehicles with larger gasoline engines. Last month, the Global Times reported that China was considering a 25% tariff on vehicles with engines 2.5L or larger, which would be up from 15%. Last year, European automakers shipped 196,000 vehicles with engines 2.5L or larger from the EU to China and that was up 11% from 2022. But through the first months of this year, shipments of the same vehicles have dropped 12%.

CHINA BUILDING LFP SUPPLY CHAIN IN MOROCCO
And China is already developing work-arounds to any European tariffs. In Morocco, it’s building a supply chain for Lithium Iron Phosphate batteries, where there’s an abundance of phosphate. Europe doesn’t currently have an LFP supply chain. Morocco also has free trade agreements with Europe and the U.S. so that supply chain could easily support those markets. And Chinese automakers already have a big cost advantage. Bloomberg New Energy Finance says Chinese battery companies can make LFP batteries for half the cost of the global average.

  

NEW BMW X3 GOES HYBRID ONLY
Just like the BMW 3 Series sedan, the X3 is going hybrid-only. Both the 2.0L gas and diesel engines and the 3.0L straight six now feature 48-volt technology. That six cylinder in the X3 M50 sends nearly 400 horsepower to all 4 wheels, helping it go from 0-100 km/h in 4.6 seconds. There’s also a plug-in hybrid version that uses the gas 2.0L engine and when combined with an electric motor makes nearly 300 horsepower. Its roughly 20 kWh battery pack returns a WLTP range of about 80-90 kilometers or 50-55 miles. Styling is another big update for the new X3, which hadn’t seen a major update since 2017. And it gets BMW’s latest operating and infotainment systems. That’s highlighted by large digital displays for the driver and in the center of the dash. The model will be made in the U.S. and South Africa and sales start kicking off in the fourth quarter of this year. Eventually there will be an all-electric iX3, but it will be built on BMW’s Neue Klasse platform, so it’s completely different from ICE-based models. Those Neue Klasse EVs are scheduled to start production sometime next year, which we think will be the iX3 and it will likely have some styling inspiration from the Neue Klasse X concept.

LAND ROVER FREELANDER BECOMES CHINA-ONLY BRAND
The Land Rover Freelander is being revived as an electric-only brand in China. The Freelander SUV was built between 1997 and 2015 and succeeded by the Discovery Sport. But Jaguar Land Rover and its joint venture partner in China, Chery, are reviving Freelander to create a lineup of electric vehicles based on Chery’s EV architecture. The models will be produced at the joint venture’s existing plant in China. At first, the EVs will be sold in China but they’ll roll out to other global markets in the future.

TO HELL WITH EMISSIONS FINES, WRANGLER V8 COMES BACK
To hell with emission fines, Jeep is bringing the V8 Wrangler back for another year. Rated at 14 MPG combined, the Wrangler 392, the quickest and most powerful Wrangler ever made, will get a second model year thanks to “popular demand.” But it’s only bringing back the Final Edition, which has a number of upgrades and a hefty price tag and probably the real reason it’s bringing it back. The 2024 Final Edition had a starting price over $100,000, so the 2025 model should be about the same, which probably also makes it the most expensive production Wrangler ever made.

FERRARI EV TO COST €500,000
Speaking of hefty price tags, Reuters reports that Ferrari will charge at least 500,000 euros for its first electric car that will launch late next year. The average Ferrari price in the 1st quarter was about 350,000 euros, but even with the price gap it expects a big bump in sales, from less than 14,000 last year up to about 20,000. The electric Ferrari will be built in a new building dedicated to the model at its factory in Maranello.

TYROMER CAN RECYCLE ANY TIRE
A Canadian company called Tyromer has figured out a way of recycling tires that doesn’t use any chemicals or additives. Instead it de-vulcanizes used tires and turns them into a new rubber compound that can be used to make new tires. And this isn’t some idea that needs to be developed, it’s already in production with factories in Canada and the Netherlands, which can recycle 1,000 kilograms an hour. Plants in the US and India are also being built. The recycled rubber can be used to make a variety of products as well, including conveyor belts and shoe soles. 75% of all rubber comes from Asia and Tyromer says its process can provide supply chain stability, lower costs and slash CO2 emissions. It’s currently looking for other companies that want to license its technology.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.