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Runtime: 10:42
0:00 LG Halts Battery Plant Construction for GM
0:42 Stellantis Celebrates 1 Year with LG
1:21 BMW Sacrifices Sales for Profits in China
2:09 India Car Market to Hit 20 Million/Year By 2047
3:06 Stellantis Pays Fines for Missing U.S. Fuel Economy Standards
4:24 Xiaomi Wants Nurburgring Record for EVs
6:00 Tesla Offers Free Paint If You Buy FSD
6:54 Not Enough Lithium? No, There’s Too Much
7:39 Rivian Converts Old Gas Station to EV Station
8:05 Ford Extends Tesla Adapter Giveaway
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
LG HALTS BATTERY PLANT CONSTRUCTION FOR GM
Last week, GM CEO Mary Barra announced that the company is backing off its goal to sell 1 million EVs in the U.S. by the end of next year because the demand isn’t there. And now Bloomberg reports that LG Energy Solution is slowing construction of its third battery plant with GM because of that slowdown. The plant is being built in Michigan and construction of the $2.6 billion facility started in 2022. It was supposed to begin operations in the first half of next year. But now it’s not going to happen by then.
STELLANTIS CELEBRATES 1 YEAR WITH LG
Meanwhile, Stellantis is celebrating the 1-year anniversary of its joint-venture with LG called NextStar Energy. They’re building a battery plant in Windsor, Ontario and it’s on pace to begin making modules this fall, followed by cell production in 2025. Once it’s fully up and running it will have an annual production capacity of just under 50-GWh.
BMW SACRIFICES SALES FOR PROFITS IN CHINA
BMW is ready to sacrifice sales and market share in favor of profits in China. The German automaker and its Chinese dealers are raising prices on some models by as much as $6,900 or 6,300 euros. One reason BMW is giving up on slashing prices is that it really didn’t help sales much, they’re down more than 4% this year despite having deep discounts. And Bloomberg reports that Mercedes and Audi are considering doing the same thing. China was once a gold mine for the German luxury brands, but now they’re fighting to hold onto what they’ve got. And Porsche just replaced the CEO of its China operations after sales fell 33% in the first half of the year.
INDIA CAR MARKET TO HIT 20 MILLION/YEAR BY 2047
With 1.4 billion people, India has the largest population in the world. It has about 5 million more people than China. Of course, that has automakers dreaming of India becoming a major new car market. And it looks like that could happen, but not for several decades. Right now, about 4 million new cars are sold every year in India, which is about two million more than Germany, and about half a million less than Japan. The three largest automakers in India are Maruti-Suzuki, Mahindra and Tata. And Maruti-Suzuki is in a dominant position with 40% market share. It predicts the Indian market for new cars could hit 20 million units a year by 2047, which would put India ahead of the U.S. and Europe. And that makes India one the last great growth markets left for the automotive industry.
STELLANTIS PAYS FINES FOR MISSING U.S. FUEL ECONOMY STANDARDS
Stellantis had to pay some hefty fines for failing to meet U.S. fuel economy standards. NHTSA revealed the automaker paid nearly $191 million in fines for the 2019 and 2020 model years. And Reuters reports that the automaker owes another $459 million in outstanding penalties. Last year, Stellantis paid a record setting $235.5 million in fines for missing fuel economy requirements for the 2018 and 2019 model years. It said in a statement that the fines occurred before it existed when it was Fiat Chrysler, claiming the penalties “are not indicative of the company’s direction.” General Motors paid nearly $130 million in fines in 2022 for missing fuel economy targets and it’s the only other automaker that has had to pay fines in the last two years.
XIAOMI WANTS NURBURGRING RECORD FOR EVs
A Chinese EV startup wants to try and break the lap record for an electric car on the Nurburgring, which is currently held by the VW ID.R. Phone maker turned automaker Xiaomi unveiled a high-performance prototype version of its SU7 sedan, called the Ultra that it will take on the track in October. It features a heavily modified body with many carbon fiber panels that help lower the overall weight, but also help produce more downforce than the car actually weighs. The SU7 Ultra tips the scales at 1,900 kilograms or just under 4,200 pounds, but creates 2,145 kilograms or over 4,700 pounds of downforce. Power comes from three electric motors that generate nearly 1,550 horsepower and provide a top speed of 350 km/h or more than 217 MPH. They’re fed by CATL’s Qilin 2.0 battery, which is a LFP or Lithium Iron Phosphate pack. And it comes with a set of heavily upgraded brakes that includes 6-piston front and rear calipers. No word yet if there will be a production version of the SU7 Ultra. Currently Xiaomi only has the one model in its lineup and it only launched the SU7 in late March or early April, so it’s interesting to see how fast some Chinese automakers iterate.
TESLA OFFERS FREE PAINT IF YOU BUY FSD
Tesla is using a bit of a loophole to allow more customers to qualify for the U.S. federal tax credit for EVs. Car buyers can’t qualify for the credit if the MSRP for a car is over $55,000, or over $80,000 for trucks and SUVs. Right now, hardware options, like headlamps or paint upgrades, are included in the MSRP to determine if an EV is eligible, but software options, like FSD are not. So, Tesla is offering free paint options on the Model 3 and X as long as you sign up for FSD. Right now, FSD on its own costs $8,000 but paint options can cost up to $2,000. So, until Tesla made this change, picking out that perfect paint color might have put the MSRP over the limit.
NOT ENOUGH LITHIUM? NO, THERE’S TOO MUCH
Remember all those predictions about two years ago that the EV transition would fail because there’s not enough lithium in the world to make EV batteries? Well, those were way off. There’s actually so much lithium available now that prices have plummeted 80%. That’s partly because of a slowdown in the growth rate of electric cars, but it’s also because lithium production has grown so much. In fact, there is so much lithium available that big mining companies are thinking about delaying opening new mines, and are shutting down operations at some existing ones. That could force the price of lithium back up again, but mining experts don’t see that happening for at least another year.
RIVIAN CONVERTS OLD GAS STATION TO EV STATION
We’ve heard of gas stations adopting EV chargers but Rivian decided to restore an old abandoned gas station in California with charging stations and solar panels and open it to the public. It has a lounge, small library, snacks, apparel in the building, which is open 7-7 and outside there’s activities for kids, water, bathrooms and EV chargers that are always open.
FORD EXTENDS TESLA ADAPTER GIVEAWAY
Ford is giving its EV customers more time to order a free Tesla adapter. The NACS or North American Charging Standard adapter allows Ford EV owners to charge at Tesla’s Supercharger stations. Ford’s EVs, like all others, are equipped with CCS plugs. Originally, the deadline to order the adapter was June 30 but now it has been extended to August 31 due to supply constraints. After the cutoff date, owners will have to pay $230 to get a Tesla adapter.
And that brings us to the end of today’s show. Thanks for tuning in.
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Stellantis and GM have to add about $50-$100 on every vehicle just to cover their fuel economy fines. As if we don’t pay enough in taxes already the Government sets a standard that forces the automakers to build cars that are not selling. In turn they build vehicles people do want and we pay more to get them. Who wins in this scenario? As always Uncle Sam. I don’t know what the answer is but any limitation on the quantity or efficiency causes the price to go up. It’s easy to say GM build small efficient cars when you don’t have to try and sell them. That segment has the lowest profit margin and fierce competition from Japan. In addition to the fines, I believe automakers still buy and sell carbon credits to try and offset regulations. Something that helped Tesla succeed until they became profitable. Either way it costs us the consumer more in the end. So, these fines sound punitive but actually just get passed onto us.
We don’t pay enough taxes, or maybe especially, the Elons and Jeffs don’t pay enough taxes, or the deficit and debt wouldn’t be so high.
GM and Stellantis have determined that the fines, which add a trivial price increase to a $50-80K vehicle, are part of the cost of doing business. Remember cars, like Cruze, Sonic, 200, Dart, etc.? Selling those would probably keep the companies from paying the taxes, but adding $50-100 to the price of each big truck or SUV is a better business proposition.
Will India really become that car-centric in the future, with about 1/3 of the land area, and more than 4 times the population of the U.S.?
Kit, Great question on India, it will be interesting to watch.
On taxes…..I can’t say I can conceptualize having a billion or trillion dollars, but I think taxing the wealthy more is not a solution, Congressional Budget Office (CBO) projected a 2024 deficit of $1.9 trillion. (https://www.cbo.gov/topics/budget)
Forbes 400 (https://www.forbes.com/forbes-400/) list of billionaires top 25 for 2023 had a total combined net worth of $1.8549 trillion. So if the wealth of the top 25 were confiscated, it still would not cover the 2024 deficit.
That said, between 1954 and 1963 top tax rate was 91% (Eisenhower Kennedy years)
Maybe we should look at spending as well as taxes. But we also need to focus on all taxes as well as regulations. Car insurance for instance, In Michigan auto insurance reform is an issue. Per Money Geek (https://www.moneygeek.com/insurance/auto/michigan-vs-ohio/) cheapest insurance is $774 a year in MI and $274 in OH. https://www.moneygeek.com/insurance/auto/michigan-vs-ohio/ What do I get for the higher rates? Regardless, I’d consider that a tax as well. And MI politicians are always working on getting insurance rates down. Maybe Ohio politicians are smarter?!?
Kit- Maybe you don’t pay enough taxes but I think I pay more than enough in taxes. Lots of little couple bucks here and there added to things so people dont make a big fuss. Its only a couple bucks but it adds up. Take flights for instance. Just 40 years ago (1984) these taxes didnt exist for flights. $2.50 911 security tax, Ticket excise tax – 7.5% on domestic flights, Flight segment tax – $3.70 within the U.S., Arrival and departure fees (taxes) $8.00 per flight / U.S. Thats an additional $36.70 on a $300 ticket or 12%. It’s worse for International flights. Ever look at your cell phone bill and the level of additional taxes added to it?
You could solve world hunger or global warming and win the Noble Peace Prize. Thats now taxable. The biggest tax change since 1960 is the growth in Social Security and Medicare taxes. They now take our money claim it’s for our retirement but then use SS as part of the general fund.
Oh and your claim that the rich need to pay more. The top 1 percent of taxpayers paid a 25.99 percent average rate, more than eight times higher than the 3.1 percent average rate paid by the bottom half of taxpayers. The top 50 percent of all taxpayers paid 97.7 percent of all federal individual income taxes.
https://taxfoundation.org/data/all/federal/summary-latest-federal-income-tax-data-2023-update/#:~:text=High%2DIncome%20Taxpayers%20Paid%20the%20Majority%20of%20Federal%20Income%20Taxes,of%20all%20federal%20income%20taxes.
The bottom half pay taxes, just not income tax at the rate of the top 1% of course, low wage earners pay SS tax on all of their income, while the very wealthy pay it on a tiny percent of their income. Also, low income people pay sales tax on all of their income because they spend all of it, while wealthy people do not.
I’m with Robert- The Gov needs to operate like we all do within our own incomes. They Do not allow local and state governments to run in the red. They have to have a balanced budget while our Federal government just spends like they have a no-limit credit card. Time to cut spending and not SS or Medicare or the things we already paid into. They need to cut the size of Government. Get within your income. But doubtful that will ever happen.