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Runtime: 10:56
0:00 Tariff Relief Only for U.S. Assembled Cars
1:10 Trump Tariffs Are Here to Stay
1:43 Tariffs Could Kill Off These 11 Car Brands
2:32 Russia Car Sales Drop Big Time
4:18 GM Recalls V8s In Its Most Profitable Trucks
5:29 Another Humanoid Robot in China
6:20 CATL Meets Strict China Battery Safety Standard
6:54 EVs Losing Market Share in U.S.
7:59 Toyota & Waymo Join Forces
8:32 Kenworth Debuts Two New Electric Trucks
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TARIFF RELIEF ONLY FOR U.S. ASSEMBLED CARS
Based on most of the media coverage you might be under the impression that President Trump eased the import tariffs for automakers and suppliers. But that’s kind of misleading. It only applies to vehicles that are assembled in the United States. And it’s only for 2 years. As we reported yesterday, automakers can apply for a tariff rebate up to 3.75% of the MSRP of a vehicle, which is meant to help offset the tariffs they paid on imported components. That applies until April 30, 2026, and then the rebate drops to 2.5% until April 30, 2027. After that it goes away completely. Also, in the first year, the rebate only applies to imported components that account for 15% of the MSRP, and in the second year it only applies to components that account for 10%. So if imported components account for more than that, too bad, they don’t count for any tariff relief.
TRUMP TARIFFS ARE HERE TO STAY
Here’s our Autoline Insight. Any automaker or supplier that was hoping Trump would offer more relief on imports now has to face the grim reality that these tariffs are likely here to stay. There’s little chance for relief unless individual countries, or trading blocks like the EU, are able to negotiate lower tariffs by offering to lower their own. That means all imported vehicles are now stuck with a 25% tariff, and that is going to land like a hammer on all automakers, suppliers and dealers.
TARIFFS COULD KILL OFF THESE 11 CAR BRANDS
The ones that will be hurt the most are the automakers that don’t have any U.S. assembly, including Audi, Aston Martin, McLaren, Jaguar, Land Rover, Porsche, Fiat, Alfa Romeo, Maserati, Mini, and Mitsubishi. So, it’s possible this could be the end for most of those brands in the U.S. market. Some very profitable high-end brands, like Ferrari, Lamborghini, Rolls-Royce and Bentley will probably be able to absorb some of the cost, and besides, their customers can probably tolerate higher prices. But for the rest of them it’s going to be a disaster. We think consumers will rush to the showrooms to buy pre-tariff cars in May, and that sales will nosedive after that.
RUSSIA CAR SALES DROP BIG TIME
Speaking of car sales falling off a cliff, the Russian market is in free fall. Sales plummeted in the first quarter due to a poor economy, high interest rates and the effects of sanctions. According to the Association of European Businesses, automakers sold 254,000 passenger vehicles in the first quarter, down 26% from a year ago. And sales aren’t expected to recover this year, with analysts forecasting sales to be below 1 million vehicles, compared to 1.6 million last year. Inventory, mainly from Chinese brands, is piling up and some dealers have had to resort to offering discounts as high as $12,000 to help boost sales. On top of that, some buyers are holding off on getting a new car because many analysts believe that some foreign brands like Hyundai and Renault, will return to the market.
GM RECALLS V8s IN ITS MOST PROFITABLE TRUCKS
There’s no over-the-air update for this recall. GM is recalling 721,000 full-size trucks and SUVs that are equipped with the automaker’s newest generation of small block V8, which may contain faulty components that can cause the engine to seize up. The 6.2L units, made at a GM plant in New York between 2021 and 2024, have crankshaft dimensions and surface finishes that are out of spec which can cause damage from sediment building up on the connecting rods and in the oil galleries. Customers are going to be asked to bring their vehicle into the dealer for inspection. If the dealer determines nothing is wrong, they will do a complete oil change and switch over to a higher viscosity oil. If the engine fails the inspection, it will be replaced with a completely new engine. GM believes it will only have to replace a small percentage of the engines in the recalled vehicles, but it will still be costly for the automaker. Even if it doesn’t replace any, a full oil change on 721,000 vehicles will cost tens of millions of dollars.
ANOTHER HUMANOID ROBOT IN CHINA
Another day, another humanoid robot. This time it’s from Chinese EV maker Xpeng, which showcased its robot called Iron at the Shanghai Auto Show. The robot was unveiled last November and Xpeng says it’s already being used on its production lines, assisting with assembling vehicles. It stands at 5-feet, 8-inches tall or 1.73 meters and weighs 154 pounds or 70 kilograms. Xpeng even adopted the voice assistant from its smart cockpit for the robot’s voice system. And the company’s autonomous driving tech has also been integrated in. In addition to using Iron on the production line, Xpeng says humanoid robots could be used as a personal assistant or to handle tasks in retail spaces, offices or the home.
CATL MEETS STRICT CHINA BATTERY SAFETY STANDARD
At the end of last month China announced new national standards for battery safety that kicks in in July of next year, but we already have our first company to meet those requirements. CATL says that its Qilin battery is the first to be certified that it won’t catch fire or explode during a thermal runaway event and that any smoke generated by the battery won’t harm passengers in the vehicle. In order to get the certification, the battery was put through a bottom impact test and 300 fast charging cycles while short circuiting.
EVs LOSING MARKET SHARE IN U.S.
Automakers sold nearly 107,600 new, pure-electric vehicles in the U.S. in March. And while that was an increase of 8% compared to a year ago, EV market share actually declined to 6.8% of the overall market. The average-transaction-price for new EVs increased 4.4% to about $59,200 in March. And the price gap between new EVs and ICEs grew to $12,229, the highest it’s been in years. The top-selling EV models in March were the Tesla Model Y, the Model 3, Ford Mustang Mach-E, Chevy Equinox and Hyundai Ioniq 5. Meanwhile, sales of used EVs soared 39% to just under 35,000 units. And for the first time ever, used EV market share reached 2% of the used market. The average price for a used EV in March was just under $37,000, a little over 2% higher than last year.
TOYOTA & WAYMO JOIN FORCES
Here’s a pretty significant development in the world of personal mobility. Toyota and Waymo reached a deal to collaborate on speeding up the development and deployment of autonomous vehicles. The two companies plan to develop a new autonomous platform, which will be built by Toyota and deployed in Waymo’s fleet. And they’ll also explore integrating Waymo’s technology into personal vehicles. Earlier this month, Waymo started mapping roads in Tokyo and once that’s complete autonomous tests with a driver on board can kick off.
KENWORTH DEBUTS TWO NEW ELECTRIC TRUCKS
Kenworth is coming out with a couple of new electric heavy-duty trucks. They’re both based on a platform developed by parent company PACCAR that features a central drive unit, which allows for more wheelbase flexibility and a bigger battery. That drive unit can produce between 365- and 470-horsepower of continuous power and up to 1850-lb-ft of torque. The T880E Class 8 truck has four battery packs available. The smallest provides about 100 miles of range, while the biggest 625-kWh pack is estimated to deliver over 250 miles of range. The T680E, which is meant for short and medium-haul operations, has three battery sizes with the largest being a 500-kWh pack that provides over 200 miles of range. Kenworth says it’s taking orders now from customers in Canada and the U.S. and deliveries are scheduled to begin later this year. But we don’t expect EVs to make up any meaningful volume in the truck maker’s total sales. Volvo Trucks put out a press release yesterday that it just cracked 5,000 global sales of battery electric trucks, even though it started selling them 6 years ago.
And that brings us to the end of today’s show. Thanks for making Autoline a part of your day.
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What if you are someone with, say, a second home in Europe. If you already own a new European car, can you ‘relocate’ it to the US without paying the tariff? You are not really importing it, since you already owned it. This should be a big issue for companies that let you buy your car at the factory, drive it through Europe and then ship it home. (ex Porsche) If this is a real loophole however, then all expensive cars would probably be delivered this way.
I still fail to see why INDUSTRIAL Robots have to be humanoid, other than showing off. Most tasks on the assembly line do not even require for the robot to walk or even have vision. It is utterly foolish to make them so cumbersome and unnecessarily expensive.
As I have said before, Humanoid robots are appropriate only as personal assistants at home. And I would appreciate if they put some clothes on those, and not design them with gears, bolts and nuts showing. THis is not a stupid sci-fi movie for 8 year olds!
As for the brands that don’t assemble their models in the US, most will not be missed, and the rest (Aston., McLaren) can easily absorb the tariffs in their already exorbitant prices.
The GM recall is not well received by its owners on the various forums. There were hardware updates in mid 2024 that resolved the real reason for the engine failures. GM should have updated these engines but they deemed it too expensive. So they went with the oil change which is just a mask. 6.2L owners are equating it to a used car dealership that puts in motor honey to mask rod knocks. Whether it works or not, the resale value of all those trucks and SUVs with the 6.2L engine is now diminished.
@Regulus on humanoid robots: my thought, too. IMHO it increases the risk of reduced acceptance by the labor unions when their appearance makes it as clear as possible that these robots replace human workers. An assembly robot or a paint robot does not look like humans but like an “industrial asset”..
So if it were my product which I would have to sell as many as possible of, I would not make them human-look-alikes.
Porsche and Audi will be missed by a number of people I know. Mini and Porsche will be missed by me. I don’t plan to buy another of either soon, or ever, but I’d rather my cars not be “orphans.”
From Trump’s statement: “automobiles and certain automobile parts are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.” What BS. The importation of cars and car parts threatens to impair the national security of the country? Threatening our former allies impairs the national security a lot more.
Of course, who knows what Trump will actually do. When thousands of Porschephiles in swing states let him know they will never vote for a Republican again, it might have an effect.
How do dealers “inspect” the 6.2 engines to see if they have a problem? Given the nature of the problem, I’d think you would need to at least remove bearing caps to see anything. Do they do that?
I’m with Regulus and Wim regarding humanoid robots. They make no sense for use in manufacturing. Simpler, but specialized robots are the thing for industrial settings.
Wim, I’m guessing GM can probably do an oil analysis to determine which engines need to be replaced.
It is amazing what the people of Russia have had to endure under Putin. Russia was on a track to become the largest single economy in Europe until Putin started to disassemble their democratic government and invaded Ukraine in 2014 to claim the Crimean peninsula. That triggered international sanctions and the current invasion has only increased them. In 2010, the Russian new car market totaled 2.45 million sales. In the last five years, it has only surpassed 1 million sales one time. Rampant inflation, high interest rates and declining personal incomes make it more difficult to purchase vehicles than ever. It is sad to think of what Russia could be now if it were not for the dictator they allowed to accumulate so much power that they now find it impossible to get rid of him.
Having spent some time in the global engine group at Ford Motor company R&D these new engines have such tight tolerances that is what has caused the use of the very thin oil. Going to a thicker oil can cause bearing starvation. Seems like GM is taking the cheap way out. They should offer free extended warranties on these motors. Either way the resale value just tanked.
I too agree that designing robots to look human is like designing a cell phone to look like a rotary dial phone. Why?
The only car makers of the 11 that had any volume over 100k was Audi, LR and Mitsubishi. Audi with 196,576. LR with 106,650 and Mitsubishi with 109,843. Porsche sells 76,167 a year in the US but most likely Aston and McLaren can absorb any costs but they only account for 1,734 vehicles a year jointly. Fiat only sells 1528. Maserati only sells 6320. So minus Audi, LR, Mitsubishi and Porsche you’re only losing 53,047 vehicles.
Lambo, I agree the higher viscosity oil is a poor solution and has drawbacks. You mentioned one (potential bearing starvation). Another is increased fuel consumption.
John McElroy, I think you answered my question about how they would “inspect” the GM engines. Thanks.
It sounds like the already dismal vehicle choice in the US could get worse. Even now, no car height wagons. No mid-large “mainstream” hatches, only pricey ones like Panamera and Model S. Also, almost no two door cars except a few pricey ones from BMW, M-B, Lexus, etc. If Mini goes away, likely if the 25% tariff remains, there will be no “premium” or some might say boutique small cars.
@Lambo215 regarding your comment on oil starvation with the thicker viscosity 0W-40 oil they are using to replace the originally called for 0W-20. That doesn’t seem to be the case in the other performance versions of the 6.2L GM uses in cars like the Corvette, Camaro, etc that come with and call for 0W-40 from the factory. It seems that oil starvation due to thin viscosity would be more of a problem in those cars more likely to see high RPMs use. It seems like GM went with the lower 0W-20 to try to save some fuel economy on CAFE averages with the best seller trucks and SUVs, vs long term longevity past the original warranty period…
It’s amazing how useless google search is for finding the actual SUS viscosity of 0W20 and 0W40 oil at high and low temperature.
I should have added Porsche with Mclaren and Aston. Porsche is far more mainstream, but 1. it is extremely profitable (it used to make $20 on each of the well over one million (!!!!!) 911s sold, and by today’s prices I bet this has become $30k to $40k, so it can absorb some tariff if it needs to. As Sean said, the US market accounts for over 30% of Porsche world-wide sales and it would be suicide for it to leave. So it will eat the tariff, or part of it.
Audi is a totally different story. Few will miss it. Its reliability has been atrocious historically. In recent years some of its models were better than others, but still buying one of these glorified VWs is a reckless act IMO.
Porsche on the other hand is amazingly reliable for its segment, and this, plus its practical designs, makes it not just a fun car but a good daily driver.
Checking CR’s reliability surveys, similar Porsche and Audis generally have similar reliability. Yeah, Porsche should be able to “eat” some or most of the tariffs on their more mainstream models like Macan and Cayenne, which start at ~$18K and ~$24K more than their Audi counterparts, Q5 and Q7. 911 has no direct competition within VW group, or anywhere, but should be highly profitable, especially the more expensive of the many versions.
Even the WSJ is saying that Trump should call off the whole tariff thing.