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Runtime: 9:55
0:00 VW Workers to Hold More Walkouts
0:47 Tesla Gets More Aggressive with Leases
1:43 Uber Launches Robotaxi Service in Abu Dhabi
2:06 Waymo Expands to Miami
2:38 Stellantis Signs Another Lithium-Sulfur Battery Deal
3:54 Lotus Shakes Up Sales Strategy
5:23 EU A “Must Win” For China EV Makers
6:08 Wuling Refreshes Hong Guang MiniEV
6:37 He Was a Designer at Mercedes & Worked at Taco Bell
7:07 Greenbrier White Paper a Must Read
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VW WORKERS TO HOLD MORE WALKOUTS
Volkswagen workers are planning another round of walkouts in Germany next week. The union IG Metall said workers will go on strike for four hours on Monday at nine plants across the country. The workers are protesting the automaker’s plan to slash jobs and wages. The two sides are trying to negotiate a deal and will resume talks on Monday but the union is holding the strike as a “warning” to management. Earlier this week, 100,000 workers walked off the job for two-hours at nine plants in Germany. So, next week’s walk out will be twice as long and disrupt production even more.
TESLA GETS MORE AGGRESSIVE WITH LEASES
Tesla is making a push to beat last year’s sales of 1.8 million vehicles. But in the first three quarters of the year, Tesla’s global sales are down 2.3%. So, to meet its goal, the company is getting more aggressive with leasing in the U.S. It’s offering three months of free charging, a free trial of Full Self Driving and it’s now allowing lease buyouts for all its vehicles. According to S&P Global Mobility, Tesla’s lease penetration was 8% in January 2023, it rose to 20% last December and hit a peak of 31% in April of this year before falling to 15% in September, which is the most recent month data is available. Some automakers have an EV lease penetration as high as 90% and that’s because there aren’t any restrictions on the $7,500 tax credit when leasing an EV.
UBER LAUNCHES ROBOTAXI SERVICE IN ABU DHABI
Autonomous vehicles are making more progress. Uber launched its first robotaxi service outside of the U.S. in Abu Dhabi, along with Chinese AV company WeRide. The service, which will use WeRide’s vehicles, will cover tourist areas around the city and will initially have a safety driver on board but it will become fully driverless sometime next year.
WAYMO EXPANDS TO MIAMI
And Waymo is expanding its robotaxi service to Miami. It will first test autonomous Jaguar I-Pace’s in the city early next year before launching the ride-hailing service to the public in 2026. Waymo also announced that it partnered with Moove, a fleet management service that will maintain its vehicles. Waymo says it’s now providing more than 150,000 driverless trips per week in Phoenix, Los Angeles, San Francisco and Austin.
STELLANTIS SIGNS ANOTHER LITHIUM-SULFUR BATTERY DEAL
Stellantis is investing in another company that makes lithium-sulfur batteries, which are lighter, cheaper and less affected by temperature as regular lithium-ion batteries. In 2023, it invested in Lyten, a U.S.-based materials company that’s using graphene to improve the durability of lithium-sulfur batteries. In May Stellantis and other automakers got some cells to test and the CTO of Lyten’s battery division told us in October they could be ready for production as early as 2027. And now Stellantis is investing in Zeta Energy, another U.S.-based company making lithium-sulfur batteries. The two will collaborate on pre-production development as well as future production of Zeta’s technology, which can be made in existing battery plants. They will set up domestic supply chains in Europe and North America and the batteries are scheduled to go into Stellantis EVs by 2030.
LOTUS SHAKES UP SALES STRATEGY
Lotus expected massive sales gains from its electric vehicles, but as we know EV demand hasn’t stayed where automakers thought it would. In 2023 Lotus sold just under 7,000, which was a record for the company, but it set a target of 24,000 sales for this year. It has already topped last year’s total with over 7,600 sales through October, but obviously, that’s well short of its goal. So, it cut its target in half to 12,000 units. To help ensure it hits that new number, Lotus is trying to add more stores. Even with 215 dealers around the world, it has stores in less than half of the European market. But in order to attract new retailers Lotus has had to drop the agency model it adopted a couple of years ago. Instead of dealers wholesaling vehicles from an automaker and selling them to customers, the automaker sets the price, handles the transactions and manages the inventory, while the dealer acts as a go-between and can get a fixed fee for any sale. However, Lotus says this ended up putting too much pressure on the company, so that’s why it’s going back to the old way of doing things. But we may find ourselves revisiting this story again at some point. Lotus also set a goal of selling 150,000 vehicles in 2028.
EU A “MUST WIN” FOR CHINA EV MAKERS
There’s an interesting report from Bloomberg that the European market is a “must win” for Chinese EV car companies, especially with them getting closed out of the U.S. market. Even though the Chinese government doesn’t want them making deals while it tries to negotiate lower tariffs, and is discouraging them from building cars in Europe, automakers are doing anyway. And they’re moving fast because they want that first-mover advantage. BYD, for example, is a major sponsor of the European Football Championship, it’s head hunting execs from Stellantis and it’s launching pop-up stores to display its cars in highly populated areas. Bloomberg says the Chinese won’t take over the European market quickly, but they’re not going to retreat.
WULING REFRESHES HONG GUANG MINIEV
The Wuling Hong Guang MINIEV was the first really popular cheap Chinese EV and since its introduction in 2020, more than 1.4 million units have been sold. Over the years, it added convertible versions as well as ones called Gameboy and Macaron. And it recently introduced the third-gen model with more bubbly styling, which seems to be doing quite well. In November over 38,000 examples were sold.
HE WAS A DESIGNER AT MERCEDES & WORKED AT TACO BELL
We had a great Autoline After Hours yesterday with Chris Benjamin, the head of design at Scout. Early in the show he talked about how he got started in automotive design at the Mercedes-Benz advanced studio in California. But he was so burdened by his college debts that he had to work a full-time job at Taco Bell at the same time he was working full-time at Mercedes. Chris also talks a lot about Scout, but the first half of the show is an incredible story of his work ethic and determination.
GREENBRIER WHITE PAPER A MUST READ
And then, if you’re looking for some good reading material over the weekend, let me recommend the Greenbrier White Paper, which we think is an eye-opening report of the dangers the auto industry faces, as well as some hard-nosed advice of what the automakers need to do to become more efficient. The report comes out of the Global Leadership Conference that’s organized by the SAE Detroit Section at the Greenbrier resort in West Virginia. Even though the conference has been around for 74 years, it’s not well known and this is the first time they’ve ever published anything about what was said. We’ve got the link in today’s transcript and description box if you’d like to check it out.
But that brings us to the end of today’s show. Thanks for tuning in and I hope that you have a great weekend.
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Sean, I apologize if you have already covered this, but are there any known loopholes in the US ‘ban’ on Chinese cars. Is it EV only? Does it include cars imported from China to a third country, then resold as used into the US? What about cars assembled by a Chinese company outside of China? In Canada, cars that are not legal in Canada can be imported by Natives directly onto the reserve then resold off the reserve as used. Is there anything similar in the US. Asking for a friend :>
Sean, I apologize if you have already covered this, but are there any known loopholes in the US ‘ban’ on Chinese cars? Is it EV only? Does it include cars imported from China to a third country, then resold as used into the US? What about cars assembled by a Chinese company outside of China? In Canada, cars that are not legal in Canada can be imported by Natives directly onto the reserve then resold off the reserve as used. Is there anything similar in the US. Asking for a friend :>
Chris Benjamin was a fool for working a job at Taco Bell, he could have had the student loans forgiven by the Biden Administration. How foolish to work and be responsible when you can’t let the government take care of you. Too bad more people aren’t like him.
There will be a lot of “shaking out” of the auto industry, and trade relationships. Trump wants a trade war, which will start out between the U.S. and elsewhere, but it will probably escalate and become global.
For now, the U.S. has a 100% tariff on EVs from China, effectively locking them out, but 27.5% for non-EVs, which currently means Envision, Nautilus, and a Volvo or two. Maybe there are others that I’m missing.
Kit, In the possible situation of an EV and an EREV that share a platform, do we know what the tariff would be? It seems like a simple workaround to ship EREVs that can be charged externally and just have owners that don’t ever use the motor. As I missing something?
Kevin, I think an EREV would be “officially” called a plug-in hybrid by the EPA. I suspect officials would play it by ear with tariffs. I’d expect anything from a Chinese company like BYD to be effectively banned, with rules made to do that.
Kit/Kevin,
I think we may have to wait and see how this all works out. Even a 100% ban on China vehicles, may not, necessarily, be enough to keep them out as the tariffs would attempt to do. On vehicles like the Envision, Nautilus and Volvos/Lotus, for sure, but not the others. A Chinese EV that cost $20-30K, at 100%, only costs the consumer $40-60K, which is what Tesla and others are charging for their vehicles! So, at the end of the day, Chinese OEMs could/would sell their vehicles, the US government would except/collect the tariff and life would move on. It’s only the high end, luxury Chinese made vehicles that would bit-it on the 100% tariff. Yet, with EV prices being what they currently are, again, that would only put their prices on the same playing field of other luxury products sold here. So, the tariffs would have done their intended purpose, but might not necessarily stop them from being sold here! How it all shakes out, we will have to wait and see.
I have to wonder how much of the VW Group’s financial woes are a result of the large payout for the diesel cheating scandal from several years ago? The fallout and the success of the Tesla Model S, is what lead them down the road of their EV transformation and the huge cost associated with that transition! Now, with the software issues at Carid and the slower then expected EV adoption, along with the financial burden attached to the development of clean sheet vehicle platforms, seems to have created the perfect storm for VW, it seems, from the vantage point of some one on the outside looking in. Hopefully, they be able to weather this adversity can come out stronger on the other side. It is a cautionary tale and a reminder that it is best to follow the rules and not live or do business thinking that rules do not apply, that they are made to be broken, or that breaking them is only bad if you get caught! Because, if/and/or when you do get caught, the bad decision(s) of a few, could be the undoing and bring to the end of legacy operation! Too big to fail?!
wmb, I suspect the $20K Chinese EVs are a notch or two or three below the $50K Teslas, Hyundais, and Kias. If anyone here knows, correct me. I haven’t seen any of these Chinese cars “in person.”
VW’s woes have multiple causes. The diesel scandal was certainly part of it, but also, the underwhelming early EVs, both from VW brand, and from Audi. Then, in a rare agreement of Consumer Reports and Car and Driver, the operator interface is awful in the one remaining “enthusiast” VW in the US market, GTI. VW haven’t been strong in the U.S. and Canada markets in decades, but they are also losing their dominance in other markets, like Europe and China. They will be shrinking, like “trucks are us” GM and Ford.
Kit,
You may be right about the standing of a $20K Chinese EV vs a $50 Tesla in the eyes of the prospective buyer and potential customers. Yet, the pundits and talking heads seem only to scream that foreign markets are going to be over run with Chinese vehicles that are thousands of dollars less expensive then the locally made counterparts. My only point was that a 100% tariff might not stop them from being sold, as much as put their purchase price closer to the cost of the local product. If the customer says: ‘I’m not spending Buick money for a Chevrolet’, that is the buyer’s choice. It just comes across to me that the tariff is suggested to make Chinese vehicles, that are apples-to-apples comparable to local product, are made more expensive as a result to of tariffs. When it just appears that the tariff will only make the products retail at a more competitive price. A potential buyer may reason that they would not pay the same money on a mystery vehicle made in China, when there is a local brand I trust that cost the same! They might, though, be willing to take the risk if the product was cheaper. Yet, if someone trusted the brand, say like when the head of Ford purchased and imported the SU7 from China, singing its praises! Then you see that it retails for half the price of a Porsche Taycan Turbo and should it come to the US, even a 100% tariff might not stop people from buying it, when in the end it would cost about the same as the Porsche in question. If it cost more, sure, but maybe not if it cost the same!
…but the tariffs may be of little consequence, if the customer can simply lease the vehicle for two or three years! Then, if it’s sold as a “used” vehicle, would/could it be sold at the original price, or would the tariff still apply?
The new WuLing is a blob. Sad to see the previous style being chucked to the curb. Oh well, its key selling point remains intact.
Very interested in the SAE’s Greenbriars document. Thanks for the heads up, have downloaded it.
“China Inc.” just built a brand-new, highly automated port in Brazil. For many countries, it’s now their number one trading partner. Not everyone is comfortable with that, and the EU (finally) signed a new FTA with the Mercosur countries (Brazil, Argentina, and some). They already have some kind of FTA with many countries like VietNam, Australia, Mexico and Canada, Chile…
…and Switzerland actually has a FTA with China. Maybe that’s why I’m slowly seeing more Chinese EVs around (including Cadillac Lyriqs?). They certainly are styled attractively. Can anyone keep up with all the companies?
As long as the US creates new trillion-dollar companies, the trade (im)balance is just one thing to keep in mind – and it of course mirrors government deficits to an extent. The previous administration managed to run up a slightly higher deficit than the current one is projected to finish with, btw..
US students can study almost for free in Germany, cost of living excluded, of course. For bachelors’ degrees, German language proficiency is almost a must, but there are many Master’s courses now taught in English.
Maybe it’s not a coincidence that (average) US social mobility has now declined to one of the lowest in the Western world. So while US growth has lately outstripped almost all advanced economies, the benefits have been heavily skewed.
By the end of this decade, China is on track to export as many vehicles as the U.S. makes annually.
Over the last five years, the Detroit Three automakers lost 6.6% points of global market share to Chinese automakers and EV startups. That represents about 5.6 million units of capacity and tens of thousands of jobs. In a global market of 86 million light vehicles annually, each percentage point of share equals 860,000 vehicles, which in turn equals three or four assembly plants worth of production.
Unquote. Source:
http://www.sae-detroit.org/wp-content/uploads/2024/12/24-GLC-White-Paper.pdf
Thanks for the info, Sean.
I found an example of a Chinese vehicle similar in size to Equinox EV, which starts at $26,780 in China. It is the BYD Song L EV. It is sort of a CUV “coupe,” in marketeer jargon. With 100% tariff, they might be able to sell a few in North America, but I suspect very few. Unless it is exceptionally good, the only reason to buy it would be to have something different.
https://cnevpost.com/2024/08/30/byd-launches-2025-song-l-ev/
I certainly can’t fault the BYD Song’s styling.