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Runtime: 10:28
0:00 Trump to Kill $7,500 EV Tax Credit
1:16 U.S. Infrastructure Bill Will Lead to Higher CO2 Emissions
2:05 Hyundai Promotes Jose Munoz to CEO
2:36 NHTSA Fines Ford $165 Million Over Backup Camera Recall
3:37 Toyota Shares Insight on How to Improve Productivity
4:51 2nd Activist Investor Buys into Nissan
5:45 Nissan Reveals New N7 EV Sedan
6:35 Acura Introduces New ADX Crossover
7:08 Chery Unveils Funky Van Concept
7:40 Yelp Expands Auto Business
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
TRUMP TO KILL $7,500 EV TAX CREDIT
Well, we knew this was probably going to happen and now it’s official. Reuters reports that President-elect Trump is going to kill the $7,500 consumer tax credit to buy electric cars. That could cripple EV sales in the U.S. which are already running well below where the industry thought they would be. And it will financially damage automakers like GM and Ford which have invested tens of billions of dollars to make EVs. In the short term, it may not hurt Lucid and Rivian too much since their high-income customers probably didn’t qualify for the subsidies. But could hurt their efforts to move down market with more affordable vehicles. This will also impact Tesla to some degree. But if it cripples the competition Tesla will come out ahead, and even Elon Musk has admitted that. One thing’s for sure. This is going to make it nearly impossible for the U.S. auto industry to catch the heavily subsidized Chinese industry to make electric cars.
U.S. INFRASTRUCTURE BILL WILL LEAD TO HIGHER CO2 EMISSIONS
This may sound counter-intuitive, but the Biden Administration’s $1.2 trillion Infrastructure Investment and Jobs Act from 2021 will actually increase CO2 emissions by nearly 190 million metric tons by 2040. That’s according to a new study from Transportation for America, which says emissions will go up because a quarter of those funds are going toward expanding highways, which will lead to more car use. It says the worst offender is Texas. But interestingly, the researchers also say that rural, more conservative states are simply repaving existing roads, not expanding them, and that will actually lead to fewer emissions.
HYUNDAI PROMOTES JOSE MUNOZ TO CEO
Big news at Hyundai today. For the first time ever, it’s appointed someone who is not Korean to run the company. Jose Muñoz was named CEO and President of the Hyundai Motor Company. Prior to this he was COO and also ran Hyundai’s operations in North America. Muñoz is 59 years old and was born in Spain but is a U.S. citizen, and earlier in his career he worked at Toyota and Nissan.
NHTSA FINES FORD $165 MILLION OVER BACKUP CAMERA RECALL
Ford has the dubious honor of having more recalls than any other automaker in the past three years in the U.S. And now it’s being fined $165 million by the National Highway Traffic Safety Administration or NHTSA for dragging its heels on settling recalls. That’s the second largest civil fine ever issued by NHTSA since it fined Takata $200 million over its defective airbags in 2015. The safety agency said Ford didn’t recall 2020 model year vehicles with faulty backup cameras in a timely manner and didn’t provide accurate and complete recall information. In addition to the fine, Ford must develop a way to monitor safety data, build a documentation platform and testing lab, create a system for tracking components, review past and current recalls and it has to meet with officials from NHTSA every single quarter.
TOYOTA SHARES INSIGHT ON HOW TO IMPROVE PRODUCTIVITY
If you work at an automotive supplier or are involved in Purchasing at one of the car companies, I highly recommend you take a look at a series of articles that Toyota published in the Toyota Times, its in-house magazine. It’s all about how Toyota and its Tier 1 suppliers work with their Tier 2s and 3s to improve productivity. These smaller companies typically don’t have the knowledge or training to do this, even though it usually takes some fairly simple procedures to make changes. The idea, of course, is to lower cost, ensure on-time delivery, get rid of defects and eliminate waste. Toyota calls the effort Group Collaborative Activities, and the articles give some really good insights on how to improve productivity. You can find the stories on Toyota’s global media website, or look for the link in today’s transcript or description box.
2ND ACTIVIST INVESTOR BUYS INTO NISSAN
Executives at Nissan might be more worried about their future than we originally thought. Earlier this week it was revealed that an activist shareholder company bought 2.5% of Nissan’s shares, which sent its stock price up. But the problem is, the activist shareholder, Effissimo, is known for investing in distressed companies and demanding structural changes. And now reports are coming out that another activist investor, Oasis Management, has taken a minority stake in Nissan and it’s actually held shares in the company longer than Effissimo. The automaker recently cut its operating profit for the year, said it’s getting rid of 9,000 employees and slashing global production by 20%. And if things don’t start turning around, the calls for changes are only going to get louder and louder.
NISSAN REVEALS NEW N7 EV SEDAN
New product like the N7 electric sedan can help and we feel like it’s been fast-tracked for that very reason. Sales kick off in China in the first half of next year and the N7 is the first model to ride on a new modular architecture that it developed with its joint venture partner Dongfeng. It calls it a medium to large sedan and it’s actually about the size of a Nissan Maxima. But features some of the newest tech, like an infotainment system powered by Qualcomm’s Snapdragon processor and hands-free driving ability provided by Momenta. It looks like the N7 is just the beginning for Nissan. It says it plans to speed up the development and export of NEVs from China.
ACURA INTRODUCES NEW ADX CROSSOVER
Acura is expanding its lineup with another small crossover. Meet the ADX. Powering the model is a 1.5L 4-cylinder engine, which is paired with a CVT and a standard all-wheel drive system. The interior is highlighted by standard digital displays; a 10-inch screen for the driver and a 9-inch display mounted high on the center of the dash. You’ll start seeing the ADX arrive at dealers in the U.S. early next year with a starting price around $35,000.
CHERY UNVEILS FUNKY VAN CONCEPT
Check out this concept that Chinese automaker Chery unveiled at the Guangzhou auto show, which is meant to be the preview of a production model. It’s kind of hard to describe its shape, but Chery calls it a sport MPV or a sporty minivan. However, it also has a real funky rear end, front and rear sliding doors, which gives it a massive opening, and front swiveling seats. There’s no doubt a model like this would stick out on the road.
YELP EXPANDS AUTO BUSINESS
Have you ever used the app Yelp to get restaurant reviews? We’ve found it to be pretty handy, especially when we’re traveling and looking for a good place to eat. Well, if you want to find a good place to get your car repaired, Yelp is now expanding into automotive service. It just purchased RepairPal for $80 million, which provides car repair locations and maintenance estimates. RepairPal is partnered with companies like CarMax, USAA and Endurance Vehicle Services. And Yelp says its expertise in search engine optimization and AI will make RepairPal even better.
But that brings us to the end of today’s show. Thanks for making Autoline a part of your day and I hope that you have a great weekend.
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With the demise of the $7,500 tax credit, it would not surprise me to see more people taking advantage of the dramatic depreciation scale for vehicles over 6,000 lbs GVW, allowing people to buy an EV that weighs more than that through a company (or hastily registered LLC), and taking advantage of the deduction of up to $27,000 on their taxes in the first year.
GM Veteran, that bonus depreciation is sunsetting soon too, decreasing percentage every year. So maybe a major taxation over haul is coming up.
I wonder if used EV tax credit stays?
Sean,
To your point and has been said/suggested before, while the new admin promised to promised to push ICE vehicles and remove support of BEVs, and not saying that this direction is a wrong move for the country, this will not stop China and others from continuing their toward them! With the US arguably several years behind China on this front, and with this type of tech moving so fast, how far will the US be behind then? Can you imagine if US battery companies and associate businesses continue their development with solid state batteries, sell their wares to offshore OEMs, when the US is ready to make the move years from now, what will they do if local companies have no capacity to support them?
What is clear, most of the country supports the new administration and wants to stick with ICE vehicles. So while there was excitement about breakthroughs with battery tech supposedly coming in the next few years that would dramatically reduce the cost of batteries and greatly increase range, EVs will continue to be a novelty for those with the disposable income to afford them in North America. IMHO, the challenge will be for global OEMs like Ford and GM and the cost to continue to develop the software for EVs for products around the world and not necessarily be able to spread that amount out on vehicles built in their bigger home market!
Lastly, with the new administration making it clear that they will remove all EV incentives, along with the IRA, and pushing ICE vehicles, why can’t Chinese EVs be sold in the US? Obviously, there are that countries human rights concerns, but as automakers go full speed ahead on ICE vehicles, the only real company low cost Chinese EVs will be to Tesla, right? To the consumer, why would they buy a Chinese may EV, when, for the next four years at least, they have their pick of the type of vehicle that they have purchased since they began driving?
Sean you make it sound like we are in race with China to get EVs on the road. GM, Ford and others have invested heavily into EVs only because of government direction. Certainly not by customer demand. Eliminating the tax credit may slow sales but doesn’t mean we fall behind in development or tech. If EVs are a great product they don’t need assistance to sell them nor should the tax payer be involved in pushing a particular product. The fact that China will likely continue to consume more EVs than the US. Makes no matter to me. We couldn’t compete on a global market as the tax credits didn’t apply anyway that won’t change.
Fewer people will buy any vehicle over the next few years. Between the deporting of many farm and construction workers, and the ~10% price increase on nearly everything at Walmart because of the tariffs, we will soon be in recession. That will affect all car sales, ICE and EV.
I’m not saying I agree with this, nor am I saying that it’s not the right decision for the the US, as most of the country seems to be in lock step with the new administration. That said, Trump has promised that he is going to remove or eliminate all EV and emissions mandates, dig for more fossil fuels and promote more ICE vehicle construction and assembly. So why would there be a need for tariffs on Chinese EVs or imported goods? Low cost, Chinese made EVs were the “Boogeyman” when EVs were the endgame, right? Why the need for tariffs if gasoline is gold again and customers get to let their pocket books decide what they will buy? Why would anyone buy a $20K Chinese EV or $45-50K Tesla, when they have range anxiety, have to put in a home charger, or can’t because they live in an apartment or condo, while there is a $35-40K Toyota hybrid, $50-60K Explorer/Grand Cherokee/ Blazer/Colorado/Ram 1500 that they can buy, with compromises?! The only place where a tariff on Chinese EVs would help, is in California, where fuel is $5-8 dollars a gallon! Yet, Toyota, Honda, Tesla and the luxury vehicle brands have that market so wrapped up, there might not be much opportunity for Chinese EVs to penetrate?! Why is there a fight to keep them out, when most won’t buy them anyway, when a gas burning vehicles is what more then have the country voted Trump into office to do? Just a thought!
From Andrew Sullivan’s substack, there is data indicating that “Trump’s ads on the trans issue shift viewers 2.7 percent toward Trump in the states they ran in (more than his margin of victory), the issue was particularly potent for swing voters.” Maybe things Harris was saying 5 years ago is why Trump won, more than anything to do with tariffs or a desire to lower environmental standards.
Anyway, tariffs to keep cheap Chinese EVs out might be useful, for a while, but Trump’s plan to put tariffs on all imports, like clothing, TVs, smart phones, computers, furniture, sports equipment, etc. would be, basically, a sales tax that would disproportionately affect lower income people.
Blanket tariffs directly drive inflation by making imported goods more expensive. Never mind the danger of retaliatory money grabs – the likes of which significantly contributed to the Great Depression (look up Smoot-Hawley).
Countries like Viet Nam have been a very handy alternate, non-Chinese source of cheap goods, and if you freely exchange your dollars for products of your choice, that’s perfectly OK (so long as there are no significant subsidies and barriers to trade). Noone’s being ‘taken advantage of’ in such a transaction.
I’d start worrying when a solid, high value-adding company like Boeing’s productive substance is being abused for short-term ‘profit’. Oh, wait. It’s dastardly Yankees specializing in that, whom we won’t touch. Incidentally, Vietnam Airlines operates both Boeing widebodies and single aisles. How much longer?