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Runtime: 11:32
0:00 Mercedes’ Q2 Earnings Drop
1:04 GM Takes $600 Million Hit from Cruise Origin
2:09 GM Could Start Closing Plants in China
3:16 Stellantis To Cut Production & Prices in North America
3:50 Tavares Warns Stellantis Could Drop Brands
4:39 Chevy Reveals All-New Corvette ZR1
6:21 China Boosts “Cash for Clunkers” Incentives
7:06 More Chinese OEMs Set Up Shop in Europe
7:53 Legacy Automaker EVs Outperform Tesla in J.D. Power Study
8:48 Tesla Warns Against Wet Towel Charging Trick
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
MERCEDES’ Q2 EARNINGS DROP
As they put Covid and the chip shortage behind them, automakers thought that 2024 would be the year when things sort of got back to normal. But it’s not turning out that way. Earlier this week Tesla reported a disastrous quarter. Yesterday we reported that Stellantis, Renault, Nissan and Ford had a sharp drop in earnings. And today we can add Mercedes Benz to the list. It sold just over 600,000 cars and vans in the last three months, down 5.5% from last year. Revenue also dropped 4% to €37 billion. And its operating profit plummeted 19% to €4 billion. While Mercedes Benz vans delivered a higher profit, its passenger cars, including electrics and PHEVs were down. Mercedes also blames a tough situation in China for the drop in earnings.
GM TAKES $600 MILLION HIT FROM CRUISE ORIGIN
Earlier this week we reported that GM was giving up on its Cruise robotaxi called the Origin. What most people don’t know is that vehicle was already fully tooled up, and GM actually built dozens and dozens of them. Walking away from that investment was costly, and GM had to take a $600 million charge to write it off. GM CEO Mary Barra blamed regulatory uncertainty. Since the Origin doesn’t have a steering wheel or other safety components like turn signal stalks, it doesn’t meet FMVSS regulations or Federal Motor Vehicle Safety Standards. She says GM needs a legislative change before the Origin can be legal. We wonder if Tesla, Waymo or Zoox believe their robotaxis are illegal but we’re willing to bet they do not. By the way, we want to thank Autoline Daily viewer Nick Thomas for sending us these pictures of Origins parked outside of a GM facility.
GM COULD START CLOSING PLANTS IN CHINA
Speaking of GM, is it going to have to start closing plants in China? In 2017 GM sold 4 million vehicles. Last year that was 2.1 million. And this year sales continue to drop. We figure that GM has at least 4 assembly plants too many in China. Mary Barra is reluctant to say what they will do because those plants are joint ventures with SAIC, which is a state-owned car company. And with China’s economy sputtering right now, it would be highly embarrassing to the government if GM and SAIC started announcing plant closings. But one thing’s for sure, GM has no intention of abandoning the Chinese market. Barra points out that it is a significant export hub for GM to markets in South America and Central Asia. And she sees a lot of opportunity with its Durant Guild retail brand that sells high-end vehicles in China, like Suburbans and Corvettes that are imported from the United States.
STELLANTIS TO CUT PRODUCTION & PRICES IN NORTH AMERICA
As we reported yesterday, Stellantis had a rough first half of the year with a 10% drop in sales and a 40% decrease in operating profit. And most of the losses came from North America, which had been the most profitable part of the company. So, Stellantis says it will cut production in North America this quarter to get more in line with demand. And it will also cut vehicle prices. It’s planning 500 million euros in savings across all of its operations in the second half of the year.
TAVARES WARNS STELLANTIS COULD DROP BRANDS
And if some of its 14 brands don’t start performing better, Stellantis CEO Carlos Tavares says it’s ready to start dumping them. During the company’s first half earnings call, Tavares said “If they don’t make money, we will shut them down. We cannot afford brands that do not make money.” We think Chrysler and Maserati are two obvious choices to get rid of, since their sales are so small. But what do you think, what brands do you think are on the chopping block?
CHEVY REVEALS ALL-NEW CORVETTE ZR1
A split window Corvette is back for the first time since 1963. Chevy revealed the all-new ZR1 version of the ‘Vette, which it claims has the most powerful V8 ever produced in America by an automaker. That engine is a twin-turbo version of the 5.5L flat-plane crank V8 found in the Z06, but instead of producing 670 horsepower, it generates over 1,050 horsepower and nearly 830 lb-ft of torque. It dubbed it the LT7 and made changes to the heads, valve train, intake system, cooling and more to make and handle all that extra power. The ZR1’s 8-speed dual clutch trans and braking system also had to go through upgrades. In fact, the 15.7-inch carbon ceramic rotors are the largest front brakes ever put on a Corvette. Magnetic Ride control dampers and a host of aerodynamic improvements are standard as well on the ZR1, but for those that want a little bit more, there’s the ZTK package. It adds more aggressive aero, including a big rear wing and underbody panels, different suspension tuning that comes with stiffer springs and Michelin performance tires. Chevy claims the ZR1 will do over 215 MPH or 346 km/h and run the quarter mile in under 10 seconds. It will be built in Kentucky and production starts sometime next year.
CHINA BOOSTS “CASH FOR CLUNKERS” INCENTIVES
China wants to get old, less environmentally friendly vehicles off of its roads, so it’s boosting subsidies for a “cash for clunkers” like program. Car buyers who scrap their old car for a new energy vehicle will now get a $2,800 incentive, double what it was before. Subsidies for buying a new ICE vehicle are now $2,100, also double. And there’s incentives to upgrade old commercial vehicles, agricultural equipment and buses as well. The vehicle incentives are part of a larger $41 billion program to upgrade large-scale industrial equipment and other consumer products in China.
MORE CHINESE OEMs SET UP SHOP IN EUROPE
More and more Chinese automakers are setting up shop in Europe to avoid tariffs on imported EVs. The EU is trying to prevent a wave of cheap Chinese EVs from flooding the market and hurting European brands. But while they don’t want imported EVs, several European countries are luring Chinese EV makers to build vehicles there. Chery will soon start operations in Spain, Leapmotor is assembling vehicles at a Stellantis plant in Poland, BYD is planning factories in Hungary and Turkey and SAIC and Zeekr are also looking for production locations in Europe. This will allow them to avoid the import tariff on Chinese EVs, which is up to 48%.
LEGACY AUTOMAKER EVs OUTPERFORM TESLA IN J.D. POWER STUDY
EVs from legacy automakers outperform Tesla, according to J.D. Power’s APEAL study. It ranks owner satisfaction of new-vehicle design and performance based on a 1,000-point scale. And this year non-Tesla EVs had a satisfaction rating of 877, which is an all-time high and also beat Tesla’s score of 870. And if Rivian had met J.D. Power’s criteria for the study, it would have come out on top of everybody, no matter the powertrain type, with a score of 900. The average score for a luxury vehicle, regardless of powertrain, was 870 and it was 838 for mass market cars. J.D. Power says improved battery range and better interiors is why other automakers passed up Tesla.
TESLA WARNS AGAINST WET TOWEL CHARGING TRICK
Speaking of Tesla, it says if you’re using a wet rag on the charging cable to speed up the charging rate to stop doing it. It has nothing to do with water getting between the plug and connector. Rather it says it can interfere with the temperature monitoring system, increasing the risk of overheating and damage. And it can make it harder for the system to determine if there’s actually a problem with the charging.
But that brings us to the end of this show and this week. Thanks for tuning in and I hope that you have a great weekend.
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The 2025 Corvette ZR1 will have the most powerful V-8 ever produced by ANYONE IN THE WORLD when it arrives for sale next year.
Chrysler is a legacy brand with a great identity heritage. Just give it product instead of killing it.
Nice to finally see a story about a very exciting V8 powered car. Wish I could justify a ZR1 Corvette purchase.
I wonder what idiot came up with the wet towel idea. I don’t own an EV and have never messed with the charging connection, but I would think common sense would tell ya that applying a wet towel over a very high-powered electrical connection isn’t probably a good idea. On top of that tricking the charger to charge faster than it should after seeing the battery fires that have already happened would also make you think it’s not a good idea, but I guess one is born every minute. Maybe let natural selection win for a while.
Stellantis has 15 brands; only 7 are sold in the US Marked with astrik.
Abarth
Alfa Romeo*
Chrysler*
Citroën
Dodge*
DS
Fiat*
Fiat Professional
Jeep*
Lancia
Maserati*
Opel
Peugeot
Ram*
Vauxhall1
I could easily see them cutting Chrysler since they haven’t given them anything to sell but the Pacifica. Moving that over to Dodge but I’m not sure why they are surprised after cutting so many vehicles from the line-up and then wonder why sales are down. Add up the volume of the Durango, Challenger, Charger, 300 and I bet thats another 100K vehicles.
I wonder why GM went ahead with the Origin when you would have to convince lawmakers to allow not only autonomous cars on the road but also vehicles that don’t meet basic standards. I am surprised it is that easy to get laws passed in your favour. A billion here, a billion there, For others that would add up.
I’d only consider the Corvette ZR1 if they offered it with this V8 as a hybrid. I care deeply about fuel economy.
The new GM robo taxis will be in thr new Bolt EV. So not all is lost.
@Albemarle’s Corvette: sure, and you would only buy it in green because you would like your 1,000 hp Corvette to be good for the environment 🙂
A couple of other notes on the GM Origin. The units in that yard have been built for awhile now. They were reported at least five months ago. I also believe I recall a report that some had been shipped to Japan where Honda was testing them in anticipation of launching their robo taxi fleet in major Japanese cities. Its hard to believe GM would engineer and tool up a vehicle for production that they knew did not meet the FMVSS standards. Its also not like GM to bet big dollars on those standards changing in a timely fashion. That is not how the government typically works, especially on vehicle standards. (Cue John’s story of how long it took NHTSA to approve rectangular shape headlights in the 1960’s and 70’s).
I think there is more to this story. And, the vehicles used by Waymo and Tesla still have steering wheels and blinker stalks because they use existing production vehicles. I am not sure about Zoox, but I recall they had a vehicle very similar to the Origin, but it was only meant for use on college and corporate campuses. At least that was the plan until the regulations were changed. Also, the Zoox and Origin could be used in many other countries where their regulations are not nearly so strict. So again, I think there could be more to this story.
How could lack of turn signal stalks be an issue with the Origin robotaxi, when Tesla somehow gets by without them in regular cars?
As Victor West says, what Chrysler needs is product, not elimination. How about a new 300, and a “luxury” oriented version of the Grand Cherokee for Chrysler.
Then, why was Ram ever a “brand” at all? Ram pickups are a Dodge model, not a brand. Why not say so?
As far as the Euro-only brands, is there a reason for DS? Also, since Opel/Vauxhall are badge engineered Peugeots, is there a reason for them? Maybe they still have “brand equity” in Germany and the UK.
Let get this straight…Stellantis said they will close brands that don’t make money, right?! Wasn’t that the reason many of those brands were case off and they bought them on the cheap in the first place?? What’s changed? Especially, since Stellantis, in the case of North American side of the FCA brands, was the reason they stop selling the Renegade, Cherokee, 300, Charger, Challenger and other models! They have taken money from the side of the company what was making the most most, discontinued models from that side and used that money to support the other side, which aren’t selling as well as they would like. So what do the leader who made these decisions do? As always, take it out on the Rankin file by shattering plants and laying off personnel! Then when they lay people, right sizing the company, they stock price goes up and leaders make more money and they go at it again! Give each of the brands good, reliable products, as so many have side and everybody will prosper!
I’m helping Cadillac stay with ICE, just bought a ’25 CT5 (which has Super Cruise). I got the 3L twin-turbo engine, and while not as quiet or smooth as my trade-in CT6, I’m hoping for an excellent experience with my new choice.
Chuck, that is a cool car, much “sportier” than the CT6. What color?
While the styling was ‘interesting’, I always thought that with the CT4 and CT5, Cadillac fielded two great vehicles for the compact and subcompact luxury market! What gets me, going back to the Sollei from a couple days ago, why could GM/Cadillac do interiors for the mass market vehicles, like they have done for the Celastiq, Sollie and the Escalade IQ? I’m not talking materials, but the styling of the interiors. The look of the Sollie’s interior, in the CT5, CT6 or XT6, would go a long way in recommending them in looks alone, even if the vehicle’s performance was just mediocre or just another all-so-ran, IMHO.
Speaking of GMs EVs, I have seen a number of Silverado’s, Blazers and a couple of Escalade IQs with customer plates on them, as well as pre-production examples of both the Escalade IQ and Optiq and a Vistiq, as well as the dozens and dozens of Lyriqs on the roads today. That’s why I was special in the report from the other day, that GM was pausing/stopping EV production, when it seemed that they were off to a really good start in the pass few months?!
Excited about the ZR1. The exterior is still a little on the coarse side for me, but I’m sure the supercharged flat-plane V8 will deliver a surfeit of excitement and mellifluous sounds.
I just saw a hopped-up Fiat 500 painted in lilac (black rims) and sporting LA Lakers emblems.
Wee.
Does anyone have an idea why the stock of Ferrari has seen a marked upswing since about the turn of the year? I confess to not following the company’s activities.
Yeah Kit, got the white pearl (officially crystal white) sierra beigh interior. Yep, sportier for sure, a little smaller (run flats a little harder ride) but still smooth. Haven’t ‘gotten on it’ yet (needs some break-in) but can tell it is going to be peppy.
I would be remiss not to mention the phenomenal ZR1, great job, Corvette.
Chuck, sounds nice. I think you have the right engine. About all reviews say the base 2.0t is underwhelming, and not right for a sport sedan, but that the 3.0t works well. I wish I had a chance to do back-to-back test drives with run flat and regular tires on the same car. I’ll consider regular tires for my Mini, mainly because I hear that they have less road noise, but also, better ride.
It may be a while before I see or hear a ZR1, but there should be a Z06 or two at a local Corvette show in a few weeks.
The Z06 and ZR1 might sound substantially different, with the latter’s turbochargers.
I just saw than Russell was DQed from the Belgian GP for being underweight after the race. It could be an expensive mistake for the team, if 20-some points changes constructor placings.
I really hope Albemarle’s comment was sarcasm. Would be like saying I’m not buying a supercar unless it can tow 7000lbs. lol
Chuck that CT5 twin turbo 3.0L has to be a mover. The TQ is 405 but I’m surprised the HP is only 335. My 3.6L has like 305HP non-turbo. The boost must be fairly low.
I was about to order a CT5 to replace my Mini, but I see that premium gas is “required,” not just “recommended” like with the Mini. I don’t know why premium should be “required” for the Cadillac. 3.0 Ford turbos of similar power specify regular. In reality, I’m sure the Caddy would be ok on regular for anything resembling normal street driving, but they have their reasons for “requiring” premium.
No, I wasn’t serious about being ready to order a CT5. I have more than enough cars already, but I like the CT5.
I just read that the CT5-V Blackhawk has a hand-built 6.2L 668 HP Supercharged V8. That might be too much power, and it is between double to triple the base price. I’m sure you made the right choice with the 3L. Looks really nice, I like that interior.