AD #3955 – Nikola Running Out of Cash; Trump May Drop AV Crash Reporting Rule; Chinese EV Maker Jiyue Disbands

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

CHINESE EV MAKER JIYUE DISBANDS
There’s roughly 150 different car brands in China, which we’ve said for a long time is far too many to support. CarNewsChina reports Jiyue, a joint venture between Geely and Baidu, will be one of the companies that doesn’t survive. So far this year, it’s sold less than 14,000 vehicles and due to the lack of finances generated from those sales, Jiyue tried cutting projects and merging departments to stay afloat, but it’s now said to be completely disbanded. There’s even social media posts of angry employees surrounding the CEO and stealing office equipment. So, Reuters reports that Geely and Baidu have stepped in, committing to settle any payroll issues.

 

CATL OFFERS FINANCIAL SUPPORT TO SUPPLIERS
Part of the reason Jiyue failed is due to the EV price war in China, which not only puts pressure on automakers, but then automakers put pressure on their suppliers for better prices. However, battery maker CATL is taking the exact opposite approach. Reuters reports it’s actually offering financial support to its suppliers in the form of taking on part of their R&D costs and making advance payments on projects. CATL believes this will help speed up innovation in materials and equipment. And it’s also helping suppliers with the certification work required to launch those new materials and equipment. 

NIKOLA RUNNING OUT OF CASH, LAYING OFF WORKERS
But Chinese automakers and suppliers aren’t the only ones feeling the pressure. Heavy truck maker Nikola says it currently doesn’t have enough money to last through January of next year and that it reduced 15% of its workforce in October, followed by more layoffs this month. After issues with the battery-electric version of its truck, Nikola shifted its focus to its fuel cell truck. But as we reported the other day, at least one fleet operator has complained of several issues, from unexpected power loss to higher costs. So, it looks like a tough path ahead.

TRUMP MAY DROP CRASH REPORTING RULE
The Trump Administration could get rid of a NHTSA provision that requires automakers to report accidents if driver assistance or AV systems were activated during or within 30 seconds of a crash. It’s part of a recommendation from a transition team that’s supposed to come up with a 100-day strategy for automotive policy. They said the amount of data collection is excessive. There’s speculation that Elon Musk played a role in drafting the recommendation because Tesla has said the data can be misleading. Its reported the most accidents to regulators. But even The Alliance for Automotive Innovation, a lobbying group that represents most major automakers, has also criticized the requirement. However, NHTSA says the data is needed to evaluate the safety of these systems.

 

U.S. EV SALES UP 5% IN OCTOBER
Electric vehicle sales continue to grow in the U.S. despite a decline from Tesla. According to S&P Global Mobility, more than 101,000 BEVs were registered in October, a 5% gain from a year ago. Meanwhile, Tesla’s registrations were down about 2%. If you exclude Tesla, EV registrations were up 11% in October. However, Tesla is still far and away the best-selling EV maker with more than 45,000 vehicles sold in October. The Tesla Model Y and 3 were also the two best-selling EVs in October. General Motors is now the second-best selling EV manufacturer with more than 12,000 sales, up 72% from a year ago. The Hyundai Group is number three with 10,000 sales, followed by Ford at nearly 6,700 units and Honda, including Acura, with 5,400 EV sales. S&P says it expects a surge in EV sales this month and into January since the $7,500 federal EV tax credit is likely to be eliminated once Trump takes office.

TOYOTA INTRODUCES NEW URBAN CRUISER EV
Speaking of EVs, you may remember that Toyota and Suzuki recently announced a partnership where Suzuki will develop and build an electric SUV for both companies in India. Suzuki already showed off the new e-Vitara and now Toyota has debuted its version, the Urban Cruiser. There’s both front- and all-wheel drive available with power ranging from about 144 horsepower up to 184 horsepower as well as two battery packs; 49- and 61 kWh. The Urban Cruiser is set to first launch in the UK in the third quarter of next year, but these are also supposed to be global models. So, more markets will follow. 

TOYOTA OFFERS BIG DISCOUNT FOR bZ4X
And Toyota is probably hoping this model appeals to customers more than its current EV, the bZ4X. In some regions of the U.S. Toyota is offering $7,500 to $10,000 off leases as well as 0% APR when leasing. So, a good deal could be had. 

CHINA USED CAR SALES ON TRACK TO BREAK RECORD
As we’ve reported, China’s cash-for-clunkers policy has been a big boost to new car sales but it’s also creating a boom in the used car market. According to the China Automobile Dealers Association, 1.4 million used vehicles were sold in November, a 7% increase and a total of 14.1 million have been sold so far this year, up 5% from a year ago. That means China is on pace to pass last year’s record of 14.9 million used car sales. China’s cash-for-clunkers program gives car buyers up to $2,750 for trading in their old vehicle and with many consumers taking advantage of it, it has led to an increase in the supply of used vehicles.

U.S. USED CAR PRICES START TO STABILIZE 
And speaking of used cars, a new study from ISeeCars says that prices are starting to stabilize in the U.S. The average price of 1 to 5-year old vehicles has hovered around $30,000 for the past 12 months, which suggests that there’s a good balance of supply and demand in the market. However, that price is still a huge increase compared to the $20,000 average price for used cars pre-pandemic. Prices for used EVs are still below the overall used market, which cost about $27,600 on average in November, a decrease of more than $6,200 compared to a year ago.

SAAB AUCTIONING OFF STAMPING PRESSES
Anyone still holding out hope that Saab could be revived is going to be disappointed. It is auctioning off stamping presses and other machines from its plant in Trollhattan, Sweden, making it unlikely that the brand will be revived. Saab was founded in 1945 and was acquired by GM in 1990. GM then sold Saab to Dutch company Spyker Cars in 2010, which sold it to Chinese company NEVS in 2012. NEVS built electric models based on Saabs at the Trollhattan plant but it was never able to ramp up to mass production, so it closed the plant last year.

But that wraps up today’s show, thanks for watching and have a great weekend.