AD #3903 – ICE Could Be Around For Rest Of 21st Century; Dock Strike Could Hurt U.S. Auto Industry; Geely Readies Next-Gen PHEV

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

VW SLASHES OUTLOOK
We start out this week with our eyes on the European auto industry, which is reeling from one bad blow to another. For the second time in three months, Volkswagen cut its outlook for sales, revenue, profit, profit margin and cash flow. Investors took that as a signal to dump their automotive stocks and the sector fell 4% today, wiping out almost $10 billion of valuation. VW says its cash flow will be cut in half, partly because of payouts it has to make to Rivian for its software defined vehicle architecture and technology. 

STELLANTIS LOSES €6 BILLION IN MARKET CAP
Stellantis also cut its guidance, saying that its profit margins will be cut in half and that instead of enjoying positive cash flow, it expects negative cash flow of between €5 billion and €10 billion. Analysts say that puts Stellantis’ stock buyback plan and dividends at risk, and that gave shareholders a strong sell signal. Its stock plummeted 14% today, wiping out €6 billion in market cap. For the year, it’s down 40%, the worst of any major European automaker. 

ASTON MARTIN STOCK PLUNGES 28%
And the problems go well beyond the big, full-line manufacturers. Aston Martin said its sales will be 17% lower than expected, earnings will be below last year’s results, and it no longer expects to be cash-flow positive for the rest of 2024. Investors didn’t like hearing that and Aston’s stock fell 28%. Aston had been counting on the Chinese market to boost sales, but there’s something of an anti-wealth sentiment going in China right now, with a lot of social media posts bashing flashy displays of wealth, which is hurting all luxury brands, not just in the automotive sector.  

 

DOCK STRIKE COULD HURT U.S. AUTO INDUSTRY
While the news isn’t as bad in the U.S. as it is in Europe, things could be about to take a downturn. Dockworkers along the East and Gulf coast of the U.S. are threatening to go on strike tomorrow. If that happens it will have a big impact on the auto industry, especially for European automakers that export vehicles to the U.S. And it will also impact parts and components shipments coming in. The dockworkers want higher wages and less automation that they see as a threat to their jobs. Negotiations have broken off, and the Biden Administration has said it won’t interfere in the talks. So it looks like a strike is likely. Oxford Economics estimates that a strike will cost the U.S. economy $4.5-$7.5 billion a week.

GEELY READIES NEXT-GEN PHEV
Extended range electrics or EREVs are the hottest segment in China right now, but new, better plug-in hybrids are coming out and we wonder if they could start eating into some of the success that EREVs are having. Geely’s CEO says it will launch the next-gen version of its plug-in hybrid system, called Thor, before the end of the year that offers over 2,000 kilometers or 1242 miles of range in some applications. It’s likely to make its debut in the Starship 7 SUV with a 1.5L engine that boasts an impressive 46% thermal efficiency and 82 kW or about 110 horsepower and an LFP battery pack. BYD also launched its new-gen PHEV system earlier this year, called DM 5.0, which has similar specs to Geely. 

NEW CADILLAC XT5 DEBUTS IN CHINA FIRST
Cadillac is launching an all-new version of the XT5 in China that will also likely spread to wherever the model is sold. It rides on an upgraded architecture with three different chassis setups it calls Hummingbird. The standard chassis setup features a wheel track that is 42 mm or over 1.6 inches wider than before and ground clearance that has increased by 22 mm or nearly an inch. The Hummingbird Air chassis comes with more rigid springs and a self-sensing variable suspension. And the last setup is called the Hummingbird Max chassis, which features a twin-clutch AWD system, and electronic adjustable suspension and Brembo 6-piston front brake calipers. Powertrain appears to be the same as the outgoing model; a 2.0L turbo 4-cylinder engine paired with a 48-volt mild hybrid system and a 9-speed automatic transmission. But the styling is all-new. The headlamps appear to be LED-only fixtures that are now mounted horizontal and separated from Cadillac’s signature vertical DRLs. Designers also gave the new XT5 a floating-roof effect with a shark-fin rear pillar and showed how the roofline and rear side silhouette were inspired by a 1959 Cadillac. The interior was completely reworked as well with a few of the highlights being a 33-inch display screen and the elimination of a gear shift lever on the center console. Starting prices in China range from about $38,000 to $48,000.

WULING MPV EV UNDER $10,000
Speaking of GM brands in China, Wuling is launching the all-electric version of the Hong Guang MPV that debuted last month. It’s built on a new NEV platform that supports ICE, EREV and BEV setups. It didn’t say how big the EV battery pack is, but revealed that it has a 75 kW or 100 horsepower electric motor and can go 300 kilometers or 186 miles on the Chinese test cycle. Pricing starts just under $10,000, which is about $3,500 more than the starting price of the EREV version.

 

NIO GETS BIG CASH INFUSION
Chinese EV maker Nio announced that it received a nearly $2 billion cash infusion from its parent company and strategic investors. Partly because of the price war in China, the automaker has never been profitable. But thanks to that cash infusion, its stock jumped 16%, the highest increase Nio has seen in nearly five months. In fact, all the Chinese EV startups saw their stock prices shoot up. 

CALIFORNIA COULD MANDATE BI-DIRECTIONAL CHARGING
OK, over to California now, which is considering a mandate that would require bi-directional charging in all EVs. Governor Gavin Newsome signed a bill to study bi-directional charging that could eventually lead to a mandate. But there’s no timeline, so we don’t know if or when the mandate will kick in. The benefit is that bidirectional charging allows power to be sent from an EV back to the grid when demand on the electrical system is higher. California’s giant utility, PG&E, says bidirectional charging could help save the state’s grid by potentially eliminating blackouts and brownouts.

ICE COULD BE AROUND FOR REST OF 21ST CENTURY
The global slowdown in the growth of electric vehicles is breathing a bit more life into the internal combustion engine. That’s one of the findings at last week’s North American International Propulsion Conference organized by the Society of Automotive Engineers. ICE sales are declining 3-4% a year worldwide, but they were expected to decline 6-8% a year, so it’s not happening as fast as everyone thought it would. One major supplier predicts that the IC engine will be around for the rest of the century, maybe not in major markets like the U.S., EU and China, but certainly in some segments in developing markets. And just a few years ago, no one expected that to happen.  

And before I sign off, we posted a video over the weekend about a new wheel motor that uses an innovative design to fit a set of gears into the same space as the rotor and stator of the electric motor. I think you might find it pretty interesting if you haven’t already checked it out. But that’s it for this show. Thanks for making Autoline a part of your day.