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Runtime: 11:25
0:00 GM Laying Off Workers in China
0:56 EV Sales Tank Without Incentives
2:03 Donald Trump Mellowing On EVs
2:56 VW Delays More EVs Again
4:26 GMC Gives New Terrain Truck Inspired Design
5:32 Global EV Sales Make Significant Gain
6:04 Nissan Dealer Profits Plunge
6:57 BYD Launching All-Electric Hot-Hatch
7:59 BYD Dominates China’s PHEV Market
8:33 Ford Offers Free At-Home Charging
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
GM LAYING OFF WORKERS IN CHINA
Two weeks ago we reported that General Motors was likely to start closing assembly plants in China due to a massive drop-off in sales. And while that hasn’t happened yet, GM is laying off employees in China. So far the layoffs only seem to be white collar staff, including R&D people. But Bloomberg reports that GM will start talks in a couple of weeks with SAIC, its Chinese partner, about reducing manufacturing capacity. GM has a 30 year contract with SAIC to make cars, which expires in 2027. But GM already lost $210 million on its Chinese operations so far this year and wants to restructure the business to make it profitable well before that 30 year contract expires.
EV SALES TANK WITHOUT INCENTIVES
When Germany yanked its subsidies for electric cars in January, sales fell off a cliff. Before that happened consumers got a €6,750 subsidy that was split between the government and the manufacturer. But when the subsidies stopped, BEV sales fell immediately and they were down 37% last month alone. The same thing happened in Sweden. It offered subsidies up to €4,600 for BEVs, but dropped that last November. And its sales are down 20% this year. Not only has that hurt automakers, it’s also hurting suppliers who invested to make EV components. That prompted Liam Butterworth, the CEO of the British supplier company Dowlais Group, to say the EU has to reinstate subsidies if it wants to meet its goal of eliminating ICE cars by 2035. And he may be right, but Germany and Sweden dropped those subsidies because of budget problems. So the question is, where will the money come from?
DONALD TRUMP MELLOWING ON EVs
And the same thing could happen in the United States. Donald Trump had been saying he will get rid of the EV mandate and all EV subsidies on Day 1 if he is re-elected. But lately Trump has mellowed a bit when it comes to EVs, ever since Elon Musk publicly embraced the former President. Yesterday, in a 2-hour conversation between the two that was broadcast on X, Musk pitched the idea that Tesla’s are sexy, and Trump said his cars are incredible. But Trump’s base of supporters are mostly anti-EV, and still want him to stop all government support for electrics. We think one thing is for sure. If Trump does get re-elected and does yank all government support for EVs, it’s going to financially damage the automakers and suppliers who have invested so heavily to manufacture them.
VW DELAYS MORE EVs AGAIN
Volkswagen is once again delaying the launch of its Trinity flagship EV. Germany’s Handelsblatt newspaper reports that production of the model is being pushed back from 2026 to 2032. The program was previously delayed by software issues and now VW is pushing it back further so its existing EV platforms, MEB and PPE, can be used longer, spreading out its investment costs over a bigger period of time. VW is also shaking up other EV launches. An electric Audi A4 is coming at the end of 2028. It will be the first model to use VW’s next-gen SSP platform. VW’s first model on that platform will be a fully electric Golf that arrives in 2029 or sooner. Then the next-gen ID.4 on the SSP platform will launch in 2030 instead of 2028. And the T-Sport electric is being pushed back from 2029 to 2031. We wonder if this might give VW more time to incorporate EV platforms from Rivian and XPeng into its lineups?
GMC GIVES NEW TERRAIN MORE TRUCK INSPIRED DESIGN
GMC refreshed the Terrain to give it a more truck inspired design and help tie its entire lineup together. The two most noticeable changes are to the grille and C-pillar. The grille has straighter sides that plunge a little deeper into the bumper and the C-pillar looks more like a shark fin, rather than the roof and body-sides kind of clamping onto the side rear windows. But the biggest update is the interior, which is completely new and now comes standard with an 11-inch digital instrument cluster, a 15 inch infotainment screen and all-new switchgear. Power still comes from a 1.5L turbo 4-cylinder that makes 175 horsepower and can tow up to 1,500 pounds. Front-drive models come with a 9-speed automatic transmission, but GMC is adding an 8-speed auto to some AWD versions. The 2025 Terrain will start launching this year, followed by higher priced models like the more off-road focused AT4 and the more premium Denali, which come in 2025.
GLOBAL EV SALES MAKE SIGNIFICANT GAIN
Global electrified vehicle sales were up in July. According to market research firm Rho Motion, automakers sold 1.35 million BEVs and PHEVs last month, up 21% compared to a year ago. That growth was mostly fueled by China, which accounted for 880,000 of those sales, which is a 31% increase. In North America, sales were up 7% and over in Europe, EV sales were down about 8% in July.
NISSAN DEALER PROFITS PLUNGE
And speaking of car sales, Nissan’s slump in the U.S. is putting a huge dent in dealer profits. Automotive New reports that the average Nissan dealership earned 70% less profit in the first half of this year compared to last year. And even more alarming, nearly 40% of Nissan’s roughly 1,100 dealerships are losing money. Nissan’s dealer return on sales slipped from 3.2% last year to 1% this year. And the brand has lost eight franchised dealers so far in 2024. Nissan’s market share in the first half was just under 6%, about 2% less than the brand had five years ago. And dealers tell Automotive News that Nissan can’t sustain a retail network with that kind size market share and that the brand should have up to 40% fewer dealerships.
BYD LAUNCHING ALL-ELECTRIC HOT-HATCH
BYD is coming out with an all-electric hot-hatch and it will make its debut at the end of the month. In May it showed a sporty concept, called the Ocean-M, which looks like the inspiration for the prototype of the production model that will be shown off at the Chengdu auto show on August 30th. Several outlets are calling the model the Seal 06 GT, but Gasgoo reports that BYD has actually registered 4 different names for the car and will pick one before its debut. Rear-drive models are said to come with up to 165 kW or 221 horsepower and AWD models will produce up to 310 kW or 415 horsepower. Battery sizes are either roughly 60 kWh or 73 kWh and provide up to 605 kilometers or 375 miles of range. Starting price is reported to be around $20,000 and sales are expected to kick off in September.
BYD DOMINATES CHINA’S PHEV MARKET
The model will help BYD grab even more of the EV market, but it’s already dominating PHEVs in China. According to CarNewsChina, BYD had 9 of the top 10 selling plug-in hybrids in China last month and for the full year it has 7 of the top 10 selling PHEVs. That’s for wholesale, not retail sales and does not include extended range electrics. But even without those EREVs, PHEV sales in July accounted for almost 34% of the total New Energy Vehicle market in China.
FORD OFFERS FREE AT-HOME CHARGING
Ford is partnering with Texas’ leading retail electric provider to offer free at-home EV charging. TXU Energy will provide Ford F-150 Lightning, Mustang Mach-E and Escape Plugin Hybrid customers with a credit that will cover their charging costs between the hours of 7PM and 1PM the next day. They feel by incentivising EV owners to charge during off-peak hours will help make the electrical grid more stable. And customers can schedule the free charging through Ford’s app or from the screen inside the vehicle. They’ll also use this opportunity to gauge interest in future energy savings programs that helps support the electrical system in the state, which we think could include bi-directional charging that essentially allows an EVs battery to become a part of the grid.
But that brings us to the end of today’s show. Thanks for tuning in.
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There was an article here on ALD a few years ago from China that said the same thing. As soon as subsidies go away, EV sales tank. Tax payers are not bottomless pits of money so that well is going to dry up. It will dry up faster now that we are facing a potential global recession. The money spent thus far on incentives would have been much better spent on discovering technology that would have reduced the cost of BEVs Achilles heal: the battery and all the electronics/software associated with charging and maintaining that battery. Tackling that is how you reduce the price of BEVs. Not just subsidies with zero end in sight.
The number of anti-EV people is always over inflated. The reality is most people who are portrayed as anti-EV are really anti-mandate. Make an affordable car that is reliable and efficient and few people will care how it’s powered.
The trend is your friend.
Over the last 20 years BEVs have steadily gotten less expensive to buy and operate while ICE cars have done the opposite. Then what is going to happen over the next 20 years? What else will get invented or improved in the near future?
No mention here of the 2500 now former UAW workers that Stellantis just laid off as they close a ram truck plant. I wonder if Shawn Fain was there to hand them consolation checks as they carried their belongings home one last time? Doubt it. His genius plan to strike for higher wages but not secure any guarantees that plants stay in the US is unraveling for more and more of the dues paying members. Luckily Shawn will be fine. Meanwhile the Spanish CEO running DCJR seems intent on destroying not only the US sales but also production as payback.
So, who’s fault would it be if money will be lost if mandates and incentives are pulled? Maybe investments were made on hopes and dreams rather than market research. What you’re saying is that EV sales will tank without continued assistance? Maybe because it’s not a better product. Maybe because it cost more to get less. Either way the money loss wouldn’t the administrations’ fault. How long did they think the incentives would continue? You cannot force the public to buy something they don’t want. They will just hold onto the old ICE and the auto industry will fall like a wet sock. They need a realistic goal and allow the technology to improve along with the infrastructure. When it’s a better product it will sell itself.
I too think Tesla cars are amazing. Appreciating them and wanting one is totally different. But the media tends to take any kind words Trump has as being leaning in favor. Likely just a simple compliment to Elon/Tesla.
Daily Driver- The layoffs at the warren plant was covered on yesterday’s show.
In 2022 the U.S spent 3.2% of its GDP of 25.44 trillion USD on energy subsidies, mainly oil, gas and coal. It’s normal to support changes that the government wishes to encourage. A small amount in comparison to encourage EV adoption is money well spent.
Oil companies are amongst the world’s wealthiest businesses. A more important question is to ask is how can we subsidize them and let new technology (that’s an advantage to society in clean air and less pollution) fend for itself?
Thanks Lambo, and I agree with your take on the EV losses as well. They all deserve whatever comes their way because they bought into The Message over common sense about human behavior. As each new bankruptcy or massive loss is announced I chuckle because it always seems accompanied by the new projection or poll saying that EVs will be 90% of sales in some ridiculously close timeframe. The disconnect is as massive as the money pile that has been burned at their altar.
Lambo, there is nothing “amazing” about Teslas, except design for manufacturing efficiency. The operator interface of the 3 and Y is awful. The ride and road noise of the 3 is more Corolla/Civic than Camry/Accord, if that good. Yes, the powertrains are more efficient than most EVs, but not by a lot in many cases.
There are what look like hundreds of Ram trucks at the local dealer. I don’t know if most are ’24s or ’25s, but there is a lot of money sitting there in unsold vehicles. There are also a lot of various Jeeps, but few Pacificas. Maybe vans are making a comeback.
Albemarle, yeah, it’s crazy that there are still subsidies for oil, gas, and coal. If anything, there should be more subsidies for wind and solar, and maybe nuclear energy.
@Albemarle on U.S. government subsidies to fossil fuel industry. The figures I found in different sources are divergent:
1 the EESI (Environmental and Energy Study Institute) estimate is $20 billion per year.
2 There are other estimates of $10 – 60 billion/yr.
3 Yale estimates globally the fossil fuel industry is subsidized with $5.9 trillion annually
4 The IMF estimates $7 trillion in 2022 globally
All in all very different numbers, albeit all are very high. So stating that a couple of billion dollars of subsidy to help establish EVs is unfair competition to the fossil fuel industry does not take into account reality.
An amazing amount of Ram trucks at the local dealer and some very base looking models which they never.seem to have
While it may seem that Trump has mellowed on EVs, I wouldn’t be surprised if he still eliminates all EVs subsidies if he’s re-elected. Though that might hit Musk where it hurts, to soften that the blow, he might give him a cabinet position for his support. While such a change would also hurt those in the auto industry, I believe the local legacy OEMs, might be preparing for such a thing, with such a possibility another reason for their hesitation on full EV adoption. With the UAW putting their support behind the Harris camp and Trumps comments during that interview with Musk, voicing his approval with keeping unions out of Tesla, if this change in EV policy hurts those companys, I didn’t think Trump will feel in pain in conscience if they suffer. With the words “too big to fail”, coming no where near his lips! I’m not saying his position is wrong or right, but it seems that he seeings things his way and if your not with him, your on your own! If he does win, IMHO, the legacy OEM that might be the most vulnerable may be the VW Group.
I’ve had 4 VWs over the years, most recently a pre-scandal TDI Jetta wagon. In “Americanizing” the brand, with 3 or 4 different so-so CUVs, but dropping the regular Golf and Jetta wagon, they don’t have much left that appeals to me. The GTI is about it, but it is now automatic only. The Golf R is cool, but $45K is a lot of money for a VW Golf. VW sold 329K units in the US in 2023, behind every other “mainstream” brand except Mitsubishi, if they count.
Gm still has underwhelming suvs under 65000$. Buick, chevy, gmc. Every segment should have an ss or performance vehicle that actually has more power, better 6 piston brakes, better suspension, larger fuel tank for improved range, and interior that feels the price of the vehicle. It would bring more people back to brand. Similar to Ford Explorer ST, but without an inflated cost. Similar pricing to Honda Ridgeline. It won’t change the fleet mpg all that much. Ford Explorer with 400hp still gets good mpg on the highway.
What I I meant by the VW Group being possibly the most vulnerable, is that they of all the legacy OEMs, were the organization that was going the hardest toward EVs the US. I’m sure that was as a result of their diesel scandal, with the current admins EV incentives no doubt easing their transition. While a government has the right to change their position and direction on a matter, since that answer to the people they govern, that does not mean that after years of promises, a swift policy may come across as unfair to some. Yet, that is the nature of politics! That does mean VW can’t continue with their plans, it may just not be as “easy”, like making vehicles that people want to drive, ever was!
That said, it does seem a little uneven and somewhat hypocritical, to back of incentives to help with EV adoption, while billions are paid to support oil and gas, which need no help and already has a stranglehold on the general public for their use. The EV incentives are a drop in the buck, compared to to the public dollars spent in support of of oil and gas! Should EV incentives go on forever? Many be not. Yet, if they should stop, then the same support should end for oil and gas, right?! ‘While then prices for those goods will go up!” How is that any different with the price of EVs? Problem with that, though, we currently have a choice to purchase or lease an EV, but with gas and oil, we are just STUCK with whatever they want and they still make billions either way!
Seems like the simple solution would be to pull all the financial assistance to oil and gas and make it a more level playing field. Certainly, if that happened prices would go up, but that might also make EVs look more attractive. One of the reasons I think they are doing better in other countries is that they have much higher gas prices. Not that I would like to see gas prices go up, but I do believe subsidizing the oil industry seems ridiculous.
Kit my comments about Tesla’s being amazing is strictly from the accomplishments of so many firsts and the fact that starting an automotive company is difficult let alone being successful at it. The fresh look approach and willingness to do things different than the legacy motor manufacturers is admirable. Tesla is arguably the reason AV has been a big push by all automakers, the electrical architecture is impressive as well as willingness to use mega-castings and a 48V system. Some of those things may not work out as I have my reservations with AV and mega-castings, but the pioneering spirit of Tesla is impressive to me. I currently have no desire to buy one, but I can still appreciate pushing the envelope. There is nothing more frustrating in the auto industry than to do something simply because that’s the way it’s been done for years. Tesla seems to be willing to look at every aspect of car making and ask is there a better way to do this. For that reason I find them Amazing.
Lambo, yeah, the success and innovation of Tesla are “amazing.” They are the first new US-based car company since Chrysler in the 1920s to last more than a few years, and make more than a few thousand cars. The cars, themselves, are far from amazingly good, at least from my perspective. I liked the Model S, though, until they deleted the turn signal stalk.
I’ve been saying for years, no, decades, that the oil subsidies should end. Also, I’ve said for decades that gas tax should be much higher, like in Europe. I voted for John Anderson in 1980 because he proposed that. Then, we wouldn’t have the obscenely inefficient vehicle mix we have, and the extra money could have brought us into the modern age with high speed rail, and better public transit in general. Yeah, I know I’m in a small minority on this.
To me, one of the biggest mistakes regulators ever made regarding autodom was making special, looser regulations for “trucks,” like everything from RAV4 to Suburban, passenger vehicles that are less efficient than sedans and station wagons. Those rules are a lot of why there are no longer any large sedans or car-height wagons in the US market.
Just here to say be careful with data on oil and gas subsidies. Especially the IMF and Yale studies. Those 2 use completely made up data based on perceived environmental damage from using gas and that is how they get to the multiple trillions of dollars. Of course that will be zero difference when talking about EVs because that manufacturing process is not exactly environmentally friendly either.
Then there is the 20B that studies have stated that the USA gives to the oil and gas companies. Lets set aside that the subsidies for EVs is far higher than the oil and gas subsidies for the moment, especially with the passing of inflation increasing, oh I mean reduction act. The 20B has a mix of direct subsidies but the lions share of the “subsidy” in those studies classifies asset depreciation as a “subsidy”. That is something unique to oil and gas studies as it makes the number higher and supports the claim that the environmentalist like to make. Asset depreciation is something every single business does including even real estate offices that depreciate something as small as a laptop computer. Oil and gas industries are extremely capital intensive so the asset depreciation is going to be very outsized compared to say a real estate office. Actual direct subsidies are small in comparison and way smaller than what EVs are currently getting, including incorrectly classifying asset depreciation. Asset depreciation is also why Kit has never seen movement on “subsidies” for oil and gas. To eliminate all things classified as a “subsidy” for oil and gas, they would have to eliminate asset depreciation which is never ever going to happen as that is standard accounting practice. So unless politicians want to put the entire accounting world in a freefall, those “subsidies” will remain….even though they are not a true subsidy.
Maybe what needs to change is studies that effectively lie by manipulating data and incorrectly classifying things. Especially the IMF and Yale studies that just make stuff up out of thin air and publish it like it is fact.
Kit- I think part of the problem with US cars is our interstates where some states have speed limits as high as 80mph. A large majority are at least 70mph. In addition to that add in the seatbelt laws and child safety seat requirements and it’s very difficult to get a family of 5 into anything without a third row that’s safe enough to travel at those speeds. So, the very tiny fuel-efficient vehicles popular in other countries just won’t sell here outside of major cities. So even with price hikes in gas it would likely kill the truck market but have little effect on the SUV’s. It would probably create a new market for minivans again and help push HEVs. But vehicles like Fiat 500, Mini or Smart car just are not that practical. Especially when the fuel economy is marginally better than something a lot larger. Take the Mini that gets 25-31mpg. The much larger Toyota Highlander gets 22-29. The hybrid gets 35-36. So, it wouldn’t even make sense to consider a small car for the 2 mpg gain.
Increasing gas prices would be devastating to the Ford and GM with their absence of car offerings and so heavily invested into trucks. It would have to be a gradual increase anyway or the economy would tank. It probably makes sense but as you point out it’s not a very popular opinion.