AD #3935 – VW Boosts Rivian Investment By $800 Million; UAW Scales Back Organizing Efforts; Hertz Accelerates EV Selloff

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VW BOOSTS RIVIAN INVESTMENT BY $800 MILLION
Rivian just landed another $800 million from Volkswagen. VW had already committed $5 billion to Rivian to get its software defined vehicle technology. But now it’s investing a total of $5.8 billion. The two automakers are forming a joint venture called Rivian and VW Group Technology LLC that will be headed up by Rivian’s chief software engineer and VW’s chief technology officer. It will employ about 1,000 engineers who will work in Palo Alto and at several other locations. VW decided to go with Rivian after the startup converted an Audi to run on its compute-stack in less than 12 weeks, something that VW spent years and billions of euros trying to do on its own. Even so, VW’s first cars with Rivian’s technology will not hit showrooms until 2027.

ELON MUSK JOINS TRUMP ADMINISTRATION
DOGE is the trading symbol for Dogecoin, a crypto currency that competes with Bitcoin, and something that Elon Musk has tweeted often about. In fact, he was even sued over allegations of manipulating the price–a lawsuit that a judge later dismissed. Well, DOGE is also the name of a new semi-official government department that will be run by Elon Musk and entrepreneur Vivek Ramaswamy. But in this case, DOGE stands for Department of Government Efficiency. President-elect Trump says the two entrepreneurs will “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures and restructure federal agencies.” DOGE will partner with the White House’s Office of Management and Budget and the aim is to conclude their work on July 4, 2026, which is also the 250th anniversary of the nation.

EU AUTOMAKERS SOUND ALARM OVER CO2 REGULATIONS
The ACEA, or the Association of European Automakers, warns that the EV market in Europe is going from bad to worse and that the industry needs immediate regulatory relief. Using data from S&P Global, it forecasts that EV market share will only reach 21% by the end of next year, down from the 27% that was originally expected. Automakers in the EU face billions of euros in fines for missing harder CO2 regs that kick in next year. The ACEA says that to reach those targets, European automakers may have to pool their emissions with Chinese and American EV companies, meaning the European auto industry would be paying money to foreign automakers who compete against them. So it’s asking for urgent relief from the fines and an expedited review of the regulations. 

FORD CUTS EV PRODUCTION IN GERMANY
As if to put an exclamation point on that, Ford announced its cutting production of EVs in Europe because of significantly lower demand than it expected. Ford invested $2 billion to make the Explorer and Capri EVs at its plant in Cologne, Germany. Those two EVs are built on Volkswagen’s MEB platform. 

  

HERTZ ACCELERATES EV SELLOFF
Hertz is increasing the number of EVs that it wants to sell from its fleet because it’s losing too much money on them. If you didn’t know, rental companies don’t make most of their money from renting cars. That money helps offset the depreciation before the vehicles are sold after a few years of service, which is where the real money comes from. But when Tesla, Hertz’s largest EV provider, and other automakers started cutting prices in 2022 and 2023, it wiped out massive amounts of value from Hertz’s EV fleet. In the third quarter of this year the rental car company reported that its vehicle depreciation was up by 89%. So, instead of getting rid of 20,000 EVs this year, it wants to dump 30,000 and will continue to sell more through the end of next year as well. Some of those vehicles are already being sold at a discount, which will likely hurt the used value of those vehicles even more. And here’s an interesting little tidbit to this whole story. It was former Ford CEO, Mark Fields, who was interim CEO of Hertz at the time, that made that original announcement to buy 100,000 Teslas. It’s not clear if that many ever entered the fleet and then following CEO Stephen Scherr made deals with Polestar and GM, who eventually resigned over this whole EV fiasco.

XPENG LANDS 2,000 ORDERS FOR VTOL
Chinese automaker XPeng has people waiting in line for its Land Aircraft Carrier. This is its large 6-wheeled vehicle that can launch what is basically a small human-sized drone out of the back. It just demonstrated how the aircraft is removed from the vehicle and then it performed its first public flight for the world to see. It’s quite the dance to get the personal VTOL out of the carrier, using its air suspension system and automatic landing gear, to slowly slide it out. The arms holding the propellers can then be opened up and it looks like it’s pretty much ready to fly after that. Test versions of the all-electric craft currently have a flight time of about 35 minutes and a top speed of roughly 80 MPH or 130 km/h. The carrier is also capable of charging the VTOL from 30-80% in 18 minutes, so owners could juice up and fly more. But once they’re done the vehicle can automatically scoop the aircraft back up, similar to how it slid out, just in reverse. And in case you’re wondering, we saw a report that says this takes about 5 minutes to complete. XPeng says it got just over 2,000 orders for the Land Aircraft Carrier after its latest demonstration. And while that’s not a big number, with a starting price of $280-grand it would represent well over half a billion dollars in sales. 

WAYMO OPENS ROBOTAXI SERVICE TO PUBLIC IN LA
Speaking of mobility, Waymo is opening up its service to everyone in LA. It’s already given out more than 100,000 paid rides to people in the city, but that was slowly rolled out to customers who signed up to be on a waiting list. They gave an average rating of 4.7 out of 5 stars, which is what helped give Waymo the confidence to open the service 24/7 and to anyone that downloads and uses the app. It also currently offers paid autonomous rides in San Francisco and Phoenix, Arizona. 

UAW SCALES BACK ORGANIZING EFFORTS
The UAW is scaling back efforts to organize other plants in the U.S. After the union secured historic deals with GM, Ford and Stellantis last year, President Shawn Fain ratcheted up efforts to unionize the transplants and EV startups. And while the union did succeed in organizing Volkswagen’s plant in Tennessee, its efforts to unionize more plants slowed after Mercedes workers in Alabama rejected the UAW back in May. Since that vote, the union hasn’t sought recognition from a new automaker. Part of the reason interest in joining the UAW has slowed is non-union automakers have raised wages and increased bonuses for workers in response to the UAW’s wins last year. And with most non-union plants located in the South where unions aren’t as favorable, it’s making it more difficult for the UAW to gain support.

CATL OPEN TO BUILDING U.S. PLANT IF TRUMP ALLOWS IT
Chinese battery maker CATL says it’s open to building a factory in the U.S. if President-elect Trump allows it. The company’s CEO says the U.S. government has denied allowing it to invest in the U.S. And the Biden Administration has also prevented Chinese battery companies from receiving EV subsidies as well as raised tariffs on Chinese EVs to 100%. But during the campaign, Trump said he is open to allowing Chinese companies in the U.S. as long as they build plants in the country. And CATL says it will consider doing so, if it’s allowed. While CATL doesn’t operate its own plant in the U.S., it does have licensing deals with Ford and Tesla, providing them with its technology to make batteries but it will not own the plants where they’re produced.

FORD RANGER GETS NEW, MORE POWERFUL ENGINE
Sales of the Ford Ranger in the U.S. are recovering from last fall’s crippling UAW strike that shut down the plant for 41 days. They’re up a healthy 12% so far this year. And sales could get a healthy boost from the new 2.7-liter Eco-Boost V6, which is also used in F-Series pickups as well as the Bronco. In the Ranger, the engine generates 315 horsepower and 400 pound feet of torque. That’s up from the 270 horsepower and 310 lb-ft that the base 2.3-liter turbo four makes. And the new engine is mated to a 10-speed automatic transmission, compared to the 6-speed that comes with the turbo four. The EPA rates the 2.7 liter at 20 miles to the gallon, compared to 22 mpgs for the 2.3-liter engine. 

But that’s a wrap for this show. Thanks for tuning in.