AD #3962 – Tesla Global Sales Down, But Up Strong in China; U.S. Car Sales Highest Since 2019; Carvana Accused Of Shady Accounting

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

TESLA GLOBAL SALES DOWN…
No doubt you heard that Tesla’s sales were down for 2024. That’s a far cry from the days when the company was growing at 50% a year. Some investors took that as a sell signal and the stock dropped 18%. Specifically, Tesla sold 1.7 million vehicles, which was close to the year before. But sales dropped by exactly 15,783 vehicles despite adding the Cybertruck to the line-up. We think Tesla probably sold about 15-16,000 Cybertrucks. So it’s interesting to see that sales were down by almost the same number that the truck added to the total.

…BUT UP STRONG IN CHINA
But in China it was a different story for Tesla, where it set a sales record. It sold over 657,000 cars there, up 8.8%, which is all the more impressive considering the brutal competition it’s facing from BYD and Chinese EV startups. Even so, production at Gigafactory Shanghai was actually down, because Tesla exported 3.3% fewer cars from China, as overseas demand for its cars softened. That’s the first time that production at its Shanghai factory has dropped.  

GM SALES SINK IN CHINA, BUT NEVs UP STRONG
General Motors also has a mixed bag of sales results in China. It sold 673,000 vehicles there, down 23% from 2023. But its sales of EVs and plug-in hybrids shot up 56% to just under 105,000 vehicles. By the way, that does not include Wuling’s or Baojun’s EV sales. This is strictly Cadillacs, Buicks and Chevrolets. GM says it’s going to add more EVs and PHEVs to its Chinese lineup this year and maybe that can help turn its sales situation around.

U.S. CAR SALES HIGHEST SINCE 2019
Now let’s shift over to sales in the U.S. They’re expected to be over 15.8 million units for all of last year, which would be the highest level since 2019. EV sales are also forecast to go up by 100,000 units to 1.3 million, which would represent about 8% of total sales in the U.S. GM will likely be the top automaker, but the Hyundai Group set its own record selling over 1.6 million vehicles, including well over 100,000 pure electrics. 

BIDEN TO BLOCK NIPPON FROM ACQUIRING U.S. STEEL
President Biden is going to block U.S. Steel from being acquired by Japan’s Nippon Steel. Automakers and suppliers backed the $14.1 billion deal because they preferred Nippon taking over U.S. Steel instead of Cleveland Cliffs, who was also bidding for the company, because they said it would create a monopoly and lead to higher steel prices. U.S. Steel shareholders also approved the deal with Nippon. But it faced opposition from the United Steelworkers union, so it looks like that lobbying by workers paid off with the deal being blocked. But this now puts U.S. Steel’s future up in question. After Cleveland Cliffs lost the bid for the company, it purchased a Canadian steel producer and has since indicated it may no longer be interested in purchasing some or all of U.S. Steel. So, it could be tough for U.S. Steel to find a new buyer.

 

MORE EVs LOSE U.S. SALES SUBSIDIES
The continued evolution of the requirements for the federal EV tax credit in the U.S. has led to confusion over which vehicles actually qualify and that list just changed again. Models that can no longer get the credit include the Rivian R1T and R1S, the Volkswagen ID.4, the Nissan Leaf and the Chevrolet Bolt. Also, 6 out of the 7 plug-in hybrids that qualified are no longer eligible. The only one that remains is the Chrysler Pacifica PHEV. This could be a big blow to Stellantis. Without many EVs in its lineup, the automaker has relied on the success of Jeep’s 4xe models to help generate ZEV credits. But losing out on what’s essentially up to $3,750 off the price tag could impact sales and could potentially lead to fines if Stellantis’ fleet fuel economy gets too high. 

SOME MODELS GAIN ACCESS TO EV CREDIT
However, there’s also several models that are gaining access to the credit. All of the Hyundai Groups EVs that are now being built in the U.S. are eligible. That includes the Hyundai IONIQ 5 and 9, the Kia EV6 and 9 and the Genesis Electrified GV70. The Cadillac Optiq and the Tesla Cybertruck are able to get the credit now too. But incoming president Donald Trump has said he’ll get rid of the federal EV tax credit, so this could all change again soon. 

HINDENBURG ACCUSES CARVANA OF SHADY ACCOUNTING
When Carvana hit the U.S. retail scene in 2017 it was considered something of a novelty. It sold used cars from big glass towers that are basically like giant vending machines. When Covid hit and people were quarantined, Carvana started offering pickup and delivery service where customers did not have to deal with another human being. Sales instantly shot up and Carvana’s stock rocketed up 7-fold. But then the growth slowed and dropped and so did the stock. The company came close to bankruptcy. But last year it looked like the company had solved its problems and was growing strong again, and the stock shot up 375%. However yesterday, Hindenburg Research, the investment firm that shorts a company’s stock, then publishes damaging revealings about its finances, went after Carvana. It says Carvana’s growth really comes from shady accounting, which Carvana vehemently denies. Hindenburg has mixed results going after companies, but it also has scored some big wins, notably when it took down Lordstown Motors. 

PONY.AI EXPANDS AV SERVICE TO HONG KONG AIRPORT
Autonomous vehicles continue to make progress and now we’re seeing them being integrated into airport operations. AV startup, Pony.ai, announced that it is partnering with Hong Kong International Airport to provide autonomous rides for passengers starting by the end of this year. The service will initially provide rides to airport staff but it will eventually expand to Hong Kong’s urban areas. Pony.ai also offers paid robotaxi services at Beijing International Airport.

OXA TESTS AVs AT HEATHROW AIRPORT
And over in the UK, autonomous startup Oxa partnered with delivery company DHL to test self-driving vehicles at London’s Heathrow airport. To showcase the technologies capabilities, an autonomous passenger vehicle was driven in and around Heathrow airport for 14 days covering 1,300 kilometers or more than 800 miles. And while a passenger vehicle was used for the test, the goal of the project is to develop vehicles that can be used for baggage transfer.

INDYCAR GOING WITH ALUMINUM WHEELS
Here’s something worth keeping an eye on. Indycar is looking at dropping magnesium wheels on its race cars and going with aluminum. And it all has to do with China. Last month China banned exports of materials to the United States, like germanium, gallium and antimony that are critical for military weapons production. So far magnesium hasn’t been banned, but it’s on a list of minerals and materials that could be banned at some point in the future. So there’s been a rush in the U.S. to stockpile these materials, which is undoubtedly why Indycar is having a hard time finding enough magnesium to cast racing wheels, which is why it wants to go with aluminum. Indycar plans on having enough wheels for 27 cars during a race season. Each car gets 10 sets of wheels, or 40 wheels per car. So for the whole field, that’s over 1,000 wheels per season.    

And that brings us to the end of today’s show and this week. Thanks for making Autoline a part of your day and I hope you have a great weekend.