AD #3882 – Hyundai Taking Tesla-Like Approach; Brand Loyalty Up 2%; JD Power Lowers EV Sales Forecast

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

CHINESE EV STOCK PRICES TAKE A NOSEDIVE
The EV movement ran into a buzzsaw of bad news today from all over the world. Let’s start in China where the stock prices of most EV automakers took a nosedive. Li Auto dropped over 9% on worries triggered by its 52% drop in profits in the last quarter. XPeng and NIO were down more than 5%. Even BYD, which just posted a 33% jump in profits, saw its stock fall almost 2%. The Wall Street Journal reports that investors are worried that car sales are falling in China and that it could spread to the EV segment.

POLESTAR POSTS ANOTHER BIG LOSS
Polestar reported another big loss of $242 million because it’s having a hard time selling its EVs despite big price discounts. Polestar’s shares are down 90% since it was spun off of Volvo last year. Lotus, which is owned by Geely and only makes high-end EVs, cut its sales forecast by 54%, largely triggered by higher tariffs in the U.S. and Europe on imported Chinese electrics.

EV REGISTRATIONS DOWN SHARPLY IN EUROPE
Speaking of Europe, EV registrations dropped nearly 11% last month, and they plummeted almost 37% in Germany after the government there stopped offering sales incentives when the money to do that ran dry. EV market share in Europe is down to 12.1%, several percentage points below where it had been hovering. PHEVs were down 14%, while hybrids shot up almost 26%. Overall, the total EU market was up, but only by 0.2%.

JD POWER LOWERS ITS EV SALES FORECAST
Now, over to the United States, where the EV situation doesn’t look any better. JD Power lowered its sales forecast for electric vehicles for 2024. At the beginning of the year it thought they’d account for 12.4% of all sales this year. Now it believes they will account for 9%. While that would be better than last year’s 7.6%, automakers across the board are cutting back on the volume and timing of the EVs they planned to launch in the American market. A couple of them are also offering blow-out Labor Day sales. Elektrek reports that Honda will slash the price of the Prologue by $14,250, making it cheaper to lease than a Civic. And Vinfast is cutting the price of its VF9 by $14,550. Even though these are holiday deals, they come off as desperation moves to try and get more customers looking at EVs.

Even with all that said, we still believe electric vehicles represent the future of where the auto industry is headed. But everything we’ve reported here shows that the transition is going to be difficult and slow.

CHARGEPOINT IMPROVING RELIABILITY WITH AI
While public EV charging is improving, there’s still too many issues unless that charger has a Tesla logo. So, ChargePoint is turning to technology for help. It announced it’s implementing an AI tool that can identify problems with chargers and send a report to ChargePoint’s Network Operations Center, which then comes up with a fix. One of the few things I could see holding back its effectiveness is that it requires the user to report the problem and post pictures on the company’s app. I’m not sure how many people will be willing to do that.

HYUNDAI TAKING TESLA-LIKE APPROACH
The big news to come from Hyundai’s Investor Day is that it wants to increase global sales by 30% and plans to do that with more hybrids and range extended electrics. But its Investor Day event was over two and a half hours long, so there were a number of other announcements that we think are important, but just didn’t have the time to cover. (45:00ish) That includes cell-to-vehicle technology, where it eliminates the floor and the battery pack becomes a part of the body structure. Like Tesla first started doing with the Model 3. Hyundai says that will allow it to cut the cost of the battery by 30%, not including the cells and chop overall weight of the pack by 10%. (51:00ish) It’s also developing software defined vehicles that will use a new zonal electronic architecture and high-performance computer. It will first come out with a test vehicle at the end of 2026 before rolling the technology out to future models. (55:00ish) And lastly, Hyundai plans to offer autonomy from Level 2+ to Level 4. To help accelerate those efforts it’s creating a new business venture that will sell an AV platform to AV software companies with the aim of speeding up development. Not only will this be applied to customer cars but also Hyundai’s robotaxi business, called Motional. It currently uses IONIQ 5s, but plans to apply what it learns from the new business venture to make a new 3rd-gen robotaxi platform.

BRAND LOYALTY UP 2%
Americans are becoming more loyal to the car brands they already own when shopping for a new car. According to S&P Global Mobility, the auto industry’s brand loyalty is at 52.5%, about 2% higher than it was a year ago and the first year-over-year increase since 2020. More than half of all brands saw a 1% or better increase. One reason brand loyalty is going up is there’s more cars in inventory with the chip shortage mostly over. When inventory was tight, some shoppers had to look at other brands to get what they wanted. Among individual brands, Tesla has the highest loyalty in the industry. 67.8% of Tesla buyers come back and buy another. The Model 3 has the highest loyalty of all, 72.1%. And General Motors is the highest rated multi-brand OEM with a 67.7% loyalty rate. But with customers more loyal than ever, it’s harder for automakers to go out and find new ones.

TECHS CAN HELP SELL MORE SERVICE REPAIRS
According to a study by Reynolds and Reynolds, dealer service departments can make more money if the technicians, you know the actual people working on your car, help in the sales process. It’s not saying techs should replace the service advisor, but rather use digital tools that allow them to provide insight into the work they’re recommending as well as do things like cross-checking to make sure all the parts are available. It says even busy shops that write over 1,200 repair orders a month can increase profits this way.

2 TELLURIDES COME WITH A TICKET TO JAIL
Well here’s a wild story. A guy walked into a Kia dealership in Tennessee ready to buy two Tellurides for nearly $160,000. But the customer was actually a scam artist. He had stolen a dead man’s identity, and when the salesperson realized this guy was using a fake driver’s license, he called the police. But to stall him until the cops got there, the sales rep played along as if nothing was wrong, going through all the paperwork in the sales process. There’s a Tik Tok video of it all, which has racked up more than 15 million views. It shows the thief shaking hands with one of the sales people and getting a round of applause as they do with all customers about to take delivery of a new car. Then it abruptly cuts to the guy getting cuffed by the cops and charged with forgery and attempted theft. Crazy stuff and I hope that salesperson gets a raise.

And on that note we wrap up today’s report. Thanks for watching Autoline Daily.