AD #3939 – EU Wants China OEMs to Transfer Tech; More EV Makers Could Turn Profit Soon; Trump Picks New Head of DoT

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

TRUMP PICKS A FOX HOST FOR DOT
President-elect Trump is moving fast to fill his cabinet and he chose Sean Duffy to head up the Department of Transportation, which is now run by Pete Buttigieg. Duffy is a former Congressman from Wisconsin and is also a host of Fox Business News. Automotive News reported that Trump was considering executives who had worked at Uber and Lyft to run the department, but decided to go with Duffy instead. Where this gets interesting is that the Department of Transportation is investigating Tesla’s Full Self Driving technology, and the Federal Aviation Administration, which is part of the DOT, is investigating SpaceX. Elon Musk has emerged as a central figure in Trump’s transition plans, and he will likely want the DOT to back off.

VALEO CEO WARNS EU AUTO INDUSTRY NEEDS HELP
The CEO of the French supplier Valeo is sounding alarms over the threat that China poses for Europe’s auto industry. He’s calling on EU officials to help level the playing field since EU companies are dealing with higher energy costs and wages than Chinese competitors. The CEO emphasized he wasn’t advocating for protectionism, rather he’d like to see the EU adopt similar policies to the U.S. Inflation Reduction Act, which provides incentives to companies for local production. If the EU doesn’t take any action, he warns that companies could be forced to move production and some may not survive.

EU WANTS CHINA OEMS TO TRANSFER TECH
But Europe is taking measures to protect its auto industry. Last month, it increased tariffs on Chinese-made EVs up to 35%. And now the Financial Times reports that the EU is planning to force Chinese companies to share intellectual property with European businesses and have factories in Europe in order to receive subsidies. It will first apply to battery companies but the plan could be rolled out to other sectors as well.

NEW YORK CITY ADOPTS $9/DAY CONGESTION CHARGE
Like many cities around the world, New York City is adopting a congestion fee to help reduce emissions. The City’s Metropolitan Transit Authority approved the toll, which will charge drivers $9 to enter Manhattan during certain times of the day, which then increases to $15 in 2031. The program is expected to raise $15 billion, which will be used to update New York’s public transportation system that’s more than 100-years-old. The toll goes into effect in early January but President-elect Trump has previously said he opposes the fees and will terminate them once he’s back in office.

CHERY FIRST WITH 1 GWH SOLID STATE BATTERY PLANT
A battery company that’s controlled by Chinese automaker Chery says it’s building the world’s first production line that can make fully solid-state batteries at the gigawatt hour level. CarNewsChina reports the site could start operating within the next few months and will eventually have the capacity to make 5 GWh of batteries a year. It also says the first solid-state cells will have an energy density similar to some of today’s liquid electrolyte lithium-ion batteries at over 280 Wh/kg. But that is expected to quickly ramp up. A second-gen cell is supposed to launch next year with an energy density of 400 Wh/kg, then go to 500 Wh/kg by 2027. Solid-state batteries are also less likely to experience thermal runaway, can handle faster charging speeds, more charging cycles and aren’t as susceptible to extreme weather.

  

TOYOTA DEVELOPING SYSTEM TO CAPTURE BOILED OFF HYDROGEN GAS
Liquid vs gaseous hydrogen is more energy dense and it doesn’t have to be stored in high-pressure tanks. But it does have to be stored at cryogenic temperatures otherwise liquid hydrogen starts boiling off into its gas form. Toyota is interested in trying to come up with a way to capture that boiled off gas and reuse it because it currently races ICE cars that run on liquid hydrogen fuel, but also has plans to offer the setup in other places of its lineup. So, Toyota is presenting a concept that first sends the boil-off gas into a tank, which uses the pressure of the incoming gas to increase the pressure in the tank by 2 to four times. It says that can convert the the boil-off gas back into a useable fuel, which will then be supplied back to the engine. However, not all boil-off gas can be converted back to fuel, so Toyota developed a small fuel cell stack that can produce electricity equivalent to an alternator, which could power something like the fuel pump. And any leftover boil-off gas is converted into water vapor through the exhaust system. Toyota says it’s looking for development partners and I think Daimler and Volvo Truck could benefit from a system like this. While the truck makers aren’t developing ICEs that run on hydrogen, they are working on liquid hydrogen fuel cell trucks.

TESLA CUTS MODEL Y LEASE TO THE SAME AS MODEL 3
Tesla is pulling a lot of its sales levers and we think it’s headed for a blowout quarter. It recently started offering discounts as well as free periods of Supercharger access and/or FSD. And now it’s chopping the lease price of the Model Y in the U.S. to $299/month, which is the same as the Model 3, even though the Y has a starting price that’s $2,500 more than the 3. In order to hit its targets for the year, Tesla needs to deliver over 500,000 vehicles in the fourth quarter, which would be a record for the company.

XPENG WILL BEAT Q4 REVENUE FORECAST
All Chinese NEV makers lose money, except for BYD and Li Auto. But XPeng and Xiaomi could be turning the corner. XPeng says its Q4 revenue will beat what Wall Street expected by at least $83 million, which would bring its total revenue to over $200 million. That’s because it expects car sales to come in anywhere from 44% to 51% above where they were a year ago.

XIAOMI’S REVENUE JUMPS 30%
Meanwhile Xiaomi said it lost $207 million in the third quarter, but its gross margin hit 17% and its revenue grew 30% thanks to strong sales of its SU7 electric sedan. Remember, this is the company that’s built and sold 100,000 cars in under 250 days and set a new track record at the Nurburgring with a concept version of the SU7 called the Ultra. Xiaomi is also the world’s third largest smartphone maker, and its automotive revenue only accounts for 8% of it’s total revenue. So it can more easily wait for its cars to start making money compared to other EV startups.

GM-SAIC-WULING ADOPT CATL BATTERY SWAPPING SYSTEM
General Motors and its joint-venture partners in China, SAIC and Wuling, announced a partnership with battery maker CATL to adopt its swappable battery technology for commercial vehicles. It’s a scalable system where a vehicle can install anywhere from one to three battery modules. Each module has a capacity of 26.5 kWh, which provides 200 kilometers or 124 miles of range. CATL’s battery swap stations, called Evogo, can swap a battery in one minute. There are currently fewer than 300 in China but it plans to have more than 3,000 stations in 2027.

And that brings us to the end of today’s show. Thank for making Autoline a part of your day.