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Runtime: 10:42
0:00 BMW Predicts Tariff Relief by July
1:19 Mitsubishi Angling for U.S. Production
2:34 Rivian Sales Fall, But Loses Less Money
3:38 Lamborghini Profits Up, Threatened by Tariffs
4:53 Chinese Airline Jumps into EV Cars
5:53 Don’t Fast Charge Under 10% Or Over 90%
6:44 Hyundai’s First China-Specific EV
7:47 Geely To Take Zeekr Private
8:43 Optional Xiaomi SU7 Hood “Only” $5,800
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BMW PREDICTS TARIFF RELIEF BY JULY
Here are a couple of potential significant developments on the tariff front. While most automakers and analysts are cutting their U.S. sales forecasts for the year because of the tariffs, BMW is not one of them. It’s sticking to its original forecast because it expects U.S. car tariffs will decline in July, based on talks it’s holding with the Trump Administration. BMW’s plant in South Carolina is the largest one it has in the world, and it is the top exporter by dollar value compared to any other assembly plant in the U.S. BMW CEO Oliver Zipse told analysts in its first quarter earnings call that being the largest exporter will “play a role” in negotiations and that its large footprint “will not be ignored.” Here’s our Autoline Insight. We think that when all the dust settles, the Trump Administration will end up with a 10% tariff on European car imports, because that’s what the EU charges on U.S. imports.
MITSUBISHI ANGLING FOR U.S. PRODUCTION
Now to the other potentially significant tariff development. Last week we identified 11 car brands that were in deep trouble over the tariffs because they don’t have any U.S. assembly plants. And one of those companies is Mitsubishi, which plans to bring a compact electric SUV to the U.S. market next year, based on the next-gen Nissan Leaf. Remember, Nissan owns 34% of Mitsubishi, and Leaf is assembled in Tennessee, so it sure sounds like Mitsubishi will get cars from that plant. And here’s where it really gets interesting. Mitsu just signed a deal to have Foxconn build a compact crossover for it in Taiwan to export to Australia and New Zealand. Also remember that Foxconn has an assembly plant in Lordstown, Ohio that’s practically sitting empty. Mitsu obviously needs more U.S. production than just getting its own version of the Leaf. So we’ve got to believe that Mitsubishi and Foxconn have had some kind of talks about moving production to that plant in Lordstown.
RIVIAN SALES FALL, BUT LOSES LESS MONEY
Now to some earnings reports. Rivian had a tough first quarter. It only sold 8,640 vehicles over the first three months of the year, which was down 36% from a year ago. And yet, its revenue was virtually unchanged from last year, coming in at $1.2 billion. That’s because the income Rivian got for its software and services skyrocketed by 263%, putting $318 million on the top line. And almost all of that increase came from the work that it’s doing for Volkswagen. Even so, Rivian still lost money. It posted an adjusted EBITDA of $329 million and a net loss of $541 million. But here’s the good news. That EBITDA loss was 58% less than last year, and the net loss was a 62% improvement.
| Rivian Q1 2025 Earnings | ||
|---|---|---|
| Sales | 8,640 | -36% |
| Revenue | $1.2 B | —- |
| EBITDA | -$328 M | |
| Net Profit | -$541 M | |
| Source: Rivian | ||
LAMBORGHINI PROFITS UP, THREATENED BY TARIFFS
Yesterday we reported on how Ferrari had a great first quarter. And now it’s Lamborghini’s turn. It sold 2,967 cars, up a strong 12.8%. Revenue shot up nearly 30% to €895 million. It posted an operating profit of €248 million, which was up an impressive 32%. Lambo credits the V12 PHEV Revuelto and the hybrid version of the Urus for pushing up sales and earnings. But the company could be pressed hard to keep this kind of growth going. Its biggest market is the United States, and the Trump tariffs are sure to have an impact, since all of its cars are made in Italy.
| Lamborghini Q1 2025 Earnings | ||
|---|---|---|
| Sales | 2,967 | +12.8% |
| Revenue | €895 M | +29.6% |
| Operating Profit | €248 M | +32.8% |
| Source: Lamborghini | ||
CHINESE AIRLINE JUMPS INTO EV CARS
There are so many car companies in China that no one seems to know for sure exactly how many there are. There are state-owned enterprises, the SOE’s. There are the EV startups like Nio, Xiaomi and BYD. There are tech companies like Huawei that have jumped into the game. But an airline? That’s a new one on us. And yet, Car News China reports that one of China’s biggest airlines, JuneYao, just started selling a 5-seat electric sedan in China. It’s called the JY Air, goes for about $20,500, has a 150-kilowatt motor, which is about 201 horsepower, and has a range of 530 kilometers, or almost 330 miles. But Car News China says the company probably can’t survive in the hyper-competitive Chinese market and will have to rely on overseas production and sales.
DON’T FAST CHARGE UNDER 10% OR OVER 90%
There is an absolute frenzy in China to create the fastest EV chargers on the planet. BYD’s Super e-Platform, for example, claims it can hit 1,000 kilowatt speeds that will add 250 miles in only 5 minutes. But a report from Tsinghua University says fast charging really degrades battery life. It says that frequently using fast charging over 120 kilowatts can cut battery life 40% compared to slower charging. EV owners are advised to use fast charging less than 40% of the time, and they should not use it at all when the state of charge is under 10% or over 90% because that’s when most of the damage is done.
HYUNDAI’S FIRST CHINA-SPECIFIC EV
Hyundai’s sales in China have completely fallen off a cliff. In 2016, it sold 1.16 million vehicles but last year that plummeted to just 151,000 cars. Yet, Hyundai isn’t giving up on the Chinese market. It just introduced a new model it hopes will turn things around. It’s called the Elexio, and the crossover is the first fully-electric model it has launched that was designed and developed specifically for China. Hyundai developed the platform with BAIC and the model’s range and pricing will be revealed later this year. Hyundai was one of the first foreign brands to launch in China and it did well early on, especially with taxis. But political tensions between China and South Korea have hurt the brand. So, to help reverse its slide, last November Hyundai and BAIC committed to invest $1.1 billion for new EVs and to expand exports.
GEELY TO TAKE ZEEKR PRIVATE
Here’s a strange development. About a year ago Zeekr went public with an IPO. But now its parent company, Geely, wants to take it private. Geely says it will pay shareholders a 14% premium to buy their shares. That would place Zeekr’s value at $6.4 billion. Last year, Zeekr started trading on the New York Stock Exchange but its stock dropped 20% this year because of concerns over tariffs and the price war in China. Geely chairman Li Shufu is shaking up the company. Over the last decade, the automaker aggressively expanded acquiring brands like Volvo and Lotus and it now has nine brands under its umbrella. But now Geely is starting to consolidate its operations and cut costs to become more competitive.
OPTIONAL XIAOMI SU7 HOOD “ONLY” $5,800
Take a look at the optional hood that you can now buy for the Xiaomi SU7 Ultra. It’s one of the hottest EVs in China right now and has been showered with all kinds of press coverage, ranging from a horrific crash that killed 3 occupants while allegedly running in autonomous mode that made headlines all across China, to proudly setting the fastest lap time for a 4-door sedan at the Nurburgring. To cash in on its Nurburgring success Xiaomi is offering the carbon-fiber hood with scoops for $5,800. The scoops on the hood are not functional, which has offended some buyers, but they sure make the car look cool.
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John, What do you think the odds are that Magna buys or builds a car assembly plant in the US to do contract assembly like they do in Europe? Maybe they could work a deal with Lambo or the Chinese or both!
Mitsubishi used to have a US assembly plant, but they sold it to Rivian.
Oh no the tariffs have automakers thinking about production in the US. That’s so weird. As for companies like Ferrari and Lamborghini. I doubt anyone cares that people who can afford to spend 250k on a car have to spend 350k on a car.
Kevin I doubt Magna would build a plant to assemble vehicles without a contract in hand to do a specific vehicle for someone. They don’t want to get into the car manufacturing business where they become a competitor to the large majority of their business as a tier 1 supplier. But they do like manufacturing cars for other manufacturers so given the opportunity I’m sure they would be happy to do it.
I wouldn’t bet on Magna assembling vehicles in the U.S. anytime soon. They must still be hurting from the Fisker Ocean. I also read somewhere that the assembly division doesn’t make as much money as other parts of Magna. That’s just an uneducated guess.
I suspect, like John, that Mitsubishi will partner with foxconn. It is a ready made car assembly plant with a ready made work force that knows how to build cars. Should be quick to ramp up. Mitsubishi is one of those companies that you kind of forget about. They seem to be building success with their latest line up of vehicles. I looked at a couple of them and you seem to be able to get a competent vehicle at a decent price point. They are at an inflection point. If they leave the USA they lose all momentum that they had gained with their latest line-up and it gets way more expensive to re-introduce the brand later. Or they stick it out, partner with Foxconn in Lordstown, and keep building on their success until it becomes financially viable for them to build/staff/equip their own facility.
Lamborghini products are basically cost no object, with their cheapest vehicle, the Touareg/Q7 based Urus costing $220K. Since they made 83K Euros per vehicle sold, they should be able to eat most of the tariffs. Maybe buyers would be willing to eat the tariffs.
Imagine how much better for your EV charging on 120v vs 240v!
Mitsubishi has been doing better, but they still had only 110K US sales in 2024, not many for a mainstream, or sub-mainstream brand. Now, they have three models, all crossovers. At one time, they sold some interesting cars in the US.
Batteries should last a long time with 240v AC charging. About the maximum charge rate is ~20 kW, much more “gentle” than 300, or 1000 kW.
John,
If, as you say, US-Europe trade ends with the US imposing a 10% tariff, which is equal to the 10% tariff Europeans ALREADY impose on US cars imported there, it will not be fair to US car exports to Europe. Not even close.
Because, if we import an S class in the US, it will only pay the 10% tariff, and, depending on the state, a sales tax either ZERO or in the low single digits.
However, if Europe imports a hippopotamus Escalade or a Rhinoceros Navigator, not only will they pay the 10%, they will also pay a VAT tax of 23-24% depending on the EU member importing it!
@Lambo on Ferrari and Lambo imports. High import duties will make the Ferrari/Lambo even more expensive compared to a Corvette. Since the Corvette is a phenomenal vehicle it may increase sales.
It appears China is similar to the U.S. except for the timeframe (of players in the auto market); this is just about how the auto industry was a century ago, here. I suspect the China car brands will consolidate, dwindle and fade away to the top brands; what that number will be is to be determined. So, like the U.S. auto industry’s ‘wild west’ shootout unfolded, such will be the ‘wild east’ shootout in China. Hope I’m not sounding like Captain Obvious, but I don’t recall this much talked about here (or at least lately).
Regulus, isn’t there VAT on all cars sold in Europe, not just imported ones? Anyway, even if there was no tariff on US car exports to Europe, no one would buy cars made in the US, except BMWs and Benzes, and a few specialty cars like Corvette and Mustang. Not many Europeans want 20 foot long pickup trucks and SUVs, and few would want a Traverse over an X5 for about the same price.
Chuck, I remember my grandfather, born in the late 1800s, talking about the car business in the 1920s. He was in the real estate business, and developed subdivisions in a few towns in Indiana, one being Elkhart. He bought a “local” Elcar, which was assembled in Elkhart through the ’20s. Elcar, like most of the dozens, or hundreds of US car companies in the ’20s used Continental and Lycoming engines, Borg-Warner transmissions, and other “off the shelf” mechanical and electrical parts. Elcar, like most of the companies, went out of business in the early 1930s, if not before.
Haynes and Apperson, in my home town of Kokomo, IN, were among the few small companies that made their own engines. They folded in the mid-1920s.
you miss the point, Kit. The comparison was between an S class imported here and the Hippo Escalade trying to sell in Europe. Focus on that.
If they are actually trying to sell Escalade in Europe, that is kind of silly, never mind tariffs. A few would buy them, just to be “different,” but the only significant potential market outside of North America is probably the Middle East.
Regulus, I’m also missing the the point about the connection between an S-Class imported to Greece, Romania, wherever “here” is for you, and the import of Escalade to Europe.
Kit,
not only don’t you understand the meaning of “reciprocity” and believe that an S class imported in the US with only a 10% tariff and a tiny sales tax is the same thing as an Escalade imported in THE EUROPEAN UNION (regardless of state) and paying 10% AND the 23% VAT,
you really need help in GEOGRAPHY too.
Romania?????? Is Romania located on the MEDITERRANEAN SEA?
IS Romania even in the EUROZONE?
I will try to ignore your far left, econ illiterate posts in the future.
You’ve never stated your secret location, or I missed it, so I just named two countries. If you’d mentioned being on the Mediterranian, I missed that. Sorry
Romania has some Blaxk Sea coastline. Anyway, is there not VAT on an S-Class sold in EU countries? Yes, general tax structures are different in different parts of the world.
In regard to tariffs. The world’s second largest car maker is looking to relocate manufacturing to the US. VW is looking to build some Audis in the US as they rolled out plans for 10 new models to be sold in the US with manufacturing locations announced in 2026 according to the German publication Automonileoche. Audi is scouting three locations including the Tenn plant where the VW ID4 is built. The second location is SC where VW is breaking ground for the soon to be flop scout. The third location was undisclosed.
The 23% VAT is applied in Europe ONLY to an S class sold IN Europe. IF the same S class is sold in the US, it does not pay that heavy VAT, only the US sales tax, if any.
Barriers to trade are not just tariffs, which, after all, are 100% LEGAL.
They also include DUMPING, which is illustrated in old econs textbooks in Japan selling its TVs in the US in the 70s for $200, while the same TV in JAPAN sold for much higher ($400, SAY).
DUMPING is ILLEGAL. If you have evidence of Dumping, you go to the Intl Trade Court and they throw the book at the perps.
But the Above different treatment of two S classes, one sold in Europe and the same vehicle sold in the US, probably is not, strictly speaking, dumping, while it sure has the same $ effect!
Regulus, exactly. European countries have different tax policies than the US. There is 20-some percent VAT on cars sold in Europe, whether an S-Class, Escalade, or Polo. Other than tariffs, there is only the lower sales tax in US states.
VW has probably already spent hundreds of millions or billions on plans for Scout, but I’m with Lambo in thinking Scout will not do well. Just build Audis in that SC plant which has been in the works for years.
It’s funny that my gas tank does not degrade when it fast-fills from zero miles to empty until it spills out the filler neck, in less than 5 minutes.