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Runtime: 10:46
0:00 Windrose to Build Tesla Semi Look-Alike in U.S.
1:21 Optimus Could be Delayed
2:04 EV Production 40-45% Below OEM Expectations
2:38 Renault’s CEO Wants EV Regulation Delay
3:21 Tavares Says Stellantis Ready to Fight Chinese EVs
4:53 BYD & Forvia Also Team Up in Europe
5:36 Berkshire Hathaway Sells Off More BYD Shares
6:00 Bosch Looks Beyond the Automotive Industry
6:32 GM’s Q2 Earnings Up
7:12 GM Gives Up on Cruise Origin
7:55 Cadillac Sollei Could Be More Than a Concept
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WINDROSE TO BUILD TESLA SEMI LOOK-ALIKE IN U.S.
A Chinese EV startup plans to open a plant in the U.S. and start selling its vehicles in the U.S. next year. Windrose says it will open a plant in Georgia to build its semi truck from imported chassis components and other parts that are first made in China. The trucks feature a more than 700 kWh battery pack that provides over 400 miles of range when fully loaded and will cost about $250,000. Windrose hopes to serve existing clients that are also headquartered in the U.S., like Nike and says that it already has 6,400 orders, which it plans to make over the next three years. But could Windrose’s time in the U.S. market be dependent on how good Tesla’s design patents are? The Tesla semi looks awfully similar and we think there’s already precedent for copyright infringement when Jeep successfully lobbied against the Mahindra ROXOR in the U.S. So, we wouldn’t be surprised to see Tesla go after Windrose, but it did take Jeep years to win its case. However, Windrose will also open up shop in Europe with a plant in Belgium next year.
I, OPTIMUS
Optimus, Tesla’s humanoid robot could come out later than expected. A couple of months ago Elon Musk said the robots would be used to perform tasks inside Tesla factories and could be sold to other companies by the end of next year. Optimus will still be used internally next year and Musk says they’ll be “genuinely useful,” but also that high production for other companies won’t come until 2026 now. He didn’t say exactly when in 2026, so it could be anywhere from a month to a year. Could this be a warning sign that Tesla’s Q2 financials won’t be that good? We’ll know later today when it reveals its results.
EV SALES 40-45% BELOW OEM EXPECTATIONS
As we keep reporting, most automakers are scaling back EV plans because of the slowdown in demand. And now the CEO of French supplier OPmobility is quantifying just how much automakers overinvested in EV production. U.S., German and French OEMs are producing EVs 40 to 45% below their initial expectations, and OPmobility says they’re shifting to hybrids and plug-in hybrids instead because demand for them is much higher.
RENAULT’S CEO WANTS EV REG DELAY
Right on cue, Renault CEO, Luca de Meo, says the auto industry needs more time to meet Europe’s EV targets. The EU wants all new vehicles to be BEVs by 2035, but de Meo says Renault won’t meet that target and needs to cut the cost of its BEVs just to meet the goals. While de Meo wants more flexibility and time to meet the target, he says it should remain in place but not for 2035. He’s also critical of fines that kick-in next year if automakers don’t meet 15% CO2 emission reduction targets in Europe. He claims they’ll cost the industry $11 billion.
TAVARES SAYS STELLA READY TO FIGHT CHINESE EVS
But while Renault says it needs more time to cut the cost of making EVs, Stellantis CEO Carlos Tavares says he’s ready to “fight” the Chinese in the EV segment in Europe. Tavares made the comments at the opening of a new EV production line in Serbia. But he admits that Stellantis will be “brutally challenged by the Chinese offensive on the European market.” Stellantis also formed a partnership with Chinese automaker Leapmotor and will sell two Leapmotor EVs in nine European countries later this year.
BYD & FORVIA TEAM UP IN EUROPE
BYD is starting to build out its supply base for its first European plant in Hungary, which should be open within the next three years. It’s going to operate together in the country with FORVIA, the world’s 7th largest automotive supplier, but they didn’t say what FORVIA will supply to BYD. However, the two already have a joint venture in China where FORVIA operates 7 plants and an R&D center to provide BYD with things like vehicle interiors, seating, electronics and software. So, it’s likely to be much of the same. And if you’re wondering who FORVIA is, it comes from the 2022 merger of suppliers Faurecia and Hella.
BERKSHIRE SELLS OFF MORE BYD SHARES
But back to BYD for a moment. Warren Buffett’s Berkshire Hathaway now owns less than 5% of the Chinese automaker. Two years ago it controlled more than 20% of BYD shares, but a recent sale dipped it to the new mark. However, since that initial investment, BYD’s shares are up 2,000%.
BOSCH LOOKS BEYOND AUTOS WITH ACQUISITION
German supplier Bosch is diversifying its business beyond automobiles. It’s acquiring Johnson Controls’ and Hitachi’s HVAC business for residential and small commercial applications for $8 billion. Bosch says the deal will boost sales of its Home Comfort division from 5 billion to 9 billion euros and strengthen its presence in the U.S. and Asia. But it’s also a way for it to expand beyond the automotive industry, which is currently going through a lot of change.
GM Q2 EARNINGS UP
General Motors reported its second quarter earnings and they’re a lot better than they were a year ago. GM sold 1.43 million vehicles, up 6.3%. It brought in $48 billion in revenue, up 7.3%. Its operating profit of $3.9 billion was up more than 39%, and its net profit of $2.9 billion was up 10%. GM’s net profit margin improved but sits at 6.1%, which is a fairly modest return. But it raised its guidance for the rest of the year, so maybe that margin will improve.
| GM Earnings Q2, 2024 | ||
|---|---|---|
| Sales | 1.43 million | +6.3% |
| Revenue | $48 billion | +7.3% |
| Operating Profit | $3.9 billion | +39% |
| Net Profit | $2.9 billion | +10% |
GM GIVES UP ON CRUISE ORIGIN
In her letter to shareholders GM CEO Mary Barra also announced that GM Cruise will give up on the Origin robot taxi, citing regulatory uncertainty over its unique design. Instead, Cruise will concentrate on using the next generation Chevrolet Bolt EV, which Barra says will have a much lower cost. That makes us wonder what’s going to happen with GM’s partnership with Honda to use the Origin for a ride hailing service that was going to launch in Tokyo in 2026. Those plans are probably out the window because we think it will be highly unlikely that Honda would use Chevrolet EVs for a ride hailing service in Japan.
CADILLAC SOLLEI COULD BE MORE THAN A CONCEPT
Yesterday Cadillac pulled the cover off this beautiful 2-door convertible concept car, called the Sollei, that is clearly built off the all-electric nearly $400,000 Cadillac Celestiq. We think if there’s enough customer interest, GM could fairly easily put this car into production because it would use the same low-cost tooling approach as the Celestiq. The 2+2 seating arrangement provides plenty of rear seat leg room, something you don’t see on a lot of convertibles. Some of the interior touches are exquisite, like those seat backs. And Cadillac is pioneering the use of a bio-based interior material called MycoWorks that is actually made from the mycelium that comes from the roots of mushrooms. But for some reason Cadillac is really fixated on attracting bird watchers to the Sollei. Get this, Caddy says the car comes with “A custom brushed metal and leather-wrapped case (that) houses 3D printed acrylic bird calls, a leather-bound journal with hand painted bird illustrations and a leather tool roll for pens and pencils, made to custom match the vehicle interior, allowing enthusiasts to capture their bird-watching experiences.” If this car ever does go into production, we think the asking price will be somewhere around half a million dollars.
But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.
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Windrose- What a Chinese firm that may infringe on patents. I’m shocked! Again, to think that business with China is going to be fair is a fool’s errand. They have copied and replicated goods from all over the world from vehicles designs to Rolex watches. This is nothing new and won’t be the last time. They have a long history of duplicating products on the cheap with substandard components. Some that were proven to include toxic or carcinogenic materials. Child toys with lead paint as recent as 2007. Hopefully Tesla does sue and if it takes 4 years, they collect any and all revenue Windrose has made in that entire time plus damages.
It was crazy how just 15 years ago after the 2008 crash all automakers were concerned with plant optimization. Trying to get to 80% utilization by closing plants shutting down brands and consolidating assembly lines. Now in an effort to meet regulations and customer demand they are probably back to a utilization below where they were before 2008. Marketing teams are really sucking to develop a plan that is off 40-45% of the actual demand. Seems just a quick survey would have let them know the demand wasn’t there.
Bosch like many suppliers is smart to try and diversify right now as the auto industry is going to be extremely volatile for the next couple years. This is what happens when you try and force a product.
Is Cadillac suggesting the new car is for the birds? Sounds almost like an April Fools announcement.
I have to call BS on Euro-OEMs that claim they cannot reduce CO2 by 15%. Expanding production of existing hybrid models should make a decrease greater than that. With lithium cheaper and batteries very available, maybe they should switch all of their ICE models to hybrid! Should be no problem selling those in Europe.
Also, if they can’t sell their BEVs then why aren’t they designing range extenders that could be added to them, making them into long range hybrids. They already have factories and car designs, they even already make the small ICEs.
If Tesla sues, it should not take anywhere near as long as the Jeep case did. That case was much more involved due to a previous production agreement and licensing agreement with the Indian company. In this case, its just an outright copy, at least of the Tesla styling.
Honda was going to put their brand on the front of the Origin anyway. Seems like they have two options. Use the new Bolt and put Honda logos on it, like they do with the Prologue. Or, work with GM to make a self-driving technology package that they can integrate into the Honda vehicle of their choice in Japan.
Don’t be too hard on the marketing teams. Especially since they don’t make the product or production decisions. They simply provide the best available information to the top execs that decide what products they will make, how many they will make, and what the appropriate production capacity of the plant should be. And with all-new technologies, changing regulations, vaguely forecasted and changing federal and state incentives, and pressure to build enough units that will allow them to make a profit sooner, these are very difficult decisions to make.
In the past, the “legacy” dealers haven’t been good at selling EVs, and have even discouraged buying them. I’ll check out Lyriq and/or Equinox EV at the local dealers and see what I encounter.
I recently got a little more insight about Elon’s politics of the last year or two. His foray into right wing politics seems to coincide with his kid’s coming out as trans. Maybe lack of active parenting would have had more to do with that than political forces.
As far as the styling of the EV trucks, is styling of something like that proprietary? I guess we may find out.
Windrose’s design is clearly very derivative, but the salient point is where will massive batteries on wheels come from in the very near future? I’d caution from deriding Chinese vehicles, the way to compete is sustained investment in attractive products.
Speaking of attractive, kudos to Cadillac for coming up with a catchy name outside its, er, qomfort zone. Very nice interior too, though the wood appliquée might benefit from less wild diversity up close. Say by just varying the colors.
As for transitioning to lower emissions transportation that doesn’t benefit select foreign petro (crime) syndicates, I’m generally in favor of less technologically deterministic (ie. rigid) and more market-friendly approaches. Revenue-neutral levies that increase by regular, small amounts over a long time, for instance.
It’s not too hard to decrease emissions, be it merely by de-tuning engines. I think ultra-cheap EVs (or battery packs) from China are the real source of OEM angst here. Storied German battery manufacturer Varta is in deep trouble already, and may get a cash infusion from Porsche or VAG.
What is interesting to me is that, with EVs, when it comes to emissions, the expectation is that it has to net zero from beginning to end of the assembly process, battery assembly included. Yet, with ICE, hybrid and plug in hybrids, the consideration seems to focus on “just” the vehicles themselves. Such a imbalance puts a lot more pressure and cost on the OEM of EVs, then it does on the other before each of their vehicles hit the road!
wmb- I think the comparisons of ICE and EV emission are including the manufacturing and battery assembly due to the obvious shift of those emissions. Before when comparing an ICE to an ICE it was quite simple to just measure what came out the tailpipe and see which vehicle was better. With the introduction of EVs we now have vehicles that have just moved their emissions from the tailpipe to a charging location that gets its power from a power plant that creates emissions. Also oil production is used for lots of things other than just gas where battery production is specific to that vehicle. Which is why the comparisions are so difficult to do a fair apples to apples comparison.
More than 85% of crude oil is refined into fuels, including gasoline, diesel, jet fuel, heating oil, and liquefied petroleum gas (LPG).
The largest consumer of lithium-ion batteries is the EV industry, which accounted for around 64% of all such batteries in 2015 and 2016. Most of the rest was phones, laptops, tablets, etc. I couldn’t find any newer information, but I suspect by now, EVs would account for 3/4 of the lithium batteries.