AD #4066 – Hyundai Boosts Prices in The U.S.; GM Expects Tariff Deal with South Korea; CATL Claims Battery Breakthrough

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

HYUNDAI BOOSTS PRICES IN THE U.S.
Just as we expected automakers to start doing, Hyundai is going to spread tariff costs across its entire lineup in the U.S. Bloomberg reports that it’s going to raise the suggested retail price on all of its vehicles by 1% and will also likely increase destination charges. The average transaction price in the U.S. last month was just a shade under $50,000, so that 1% increase would be $500 and that’s before you tack on any of the other new fees. But the price hikes will only be applied to newly built models, not the ones already in inventory, which means that Hyundai can probably stay true to its previous pledge to keep prices the same until June 2nd. Other automakers have made similar promises, but if the tariffs stick around, we expect more to follow in Hyundai’s footsteps.

VW PLANS “MASSIVE” U.S. INVESTMENT
Speaking of the tariffs, yesterday we reported that BMW, Mercedes and VW are in talks with the U.S. over a possible trade deal. And as a quick little follow up to that, VW CEO Oliver Blume confirmed that he’s “been in regular dialogue” with the administration and says the company will make “massive investments” in the U.S. But he didn’t say what those investments would be yet or when they’ll happen.

VOLVO HALTS U.S. PRODUCTION OVER PARTS SHORTAGE
We think it will involve building more models in the U.S. and Volvo will probably do the same. With the S60 sedan being discontinued in the U.S. Volvo only builds the EX90 and Polestar 3 at its plant in South Carolina. That plant has the capacity to build roughly 150,000 vehicles a year, but according to Automotive News it made less than 9,000 examples last year. Plus, Volvo issued a work stoppage at the plant last week due to an unknown parts shortage, which is going to hurt output even more. So, with so much extra capacity in South Carolina, it’s very likely Volvo fills it with new models, which will also reduce its reliance on imports as well as its vulnerability to the tariffs. And those tariffs, plus tougher competition in China is why S&P just lowered Volvo’s credit rating. 

GM EXPECTS TARIFF DEAL WITH SOUTH KOREA
And it looks like General Motors expects South Korea to make a deal to lower tariffs. The automaker’s Chief Financial Officer, Paul Jacobson, said GM is going to take a “wait-and-see approach” before making a decision on the vehicles it imports from South Korea, which are being hit with 25% tariffs. Jacobson says GM doesn’t want to rush a long-term change because he thinks it’s likely that the tariffs are going to be lowered. GM imports the Chevy Trax and Trailblazer along with the Buick Envista and Encore GX from South Korea.

TESLA ZEV CREDITS AT RISK
One of the great points that came up on the latest Autoline After Hours was the impact on Tesla if the U.S. Congress waters down or eliminates the EPA’s CO2 standard on cars. Tesla counts on selling ZEV credits to legacy automakers who come up short on CO2 emissions. In the last 5 quarters alone it collected over $3.3 billion. And in the first quarter of this year, Tesla would have lost money if not for those credits. So if Congress waters down or eliminates the CO2 regs, it’s going to have a significant impact on Tesla’s earnings. By the way, that show also dove into which U.S. assembly plants are in deep trouble thanks to tariffs and the elimination of EV subsidies, and you can watch it right now on the Autoline website or our YouTube channel.

FORD SAYS EV BATTERY PLANT AT RISK IF INCENTIVES REMOVED
If Congress approves a bill to remove EV incentives, Ford says it puts a battery plant it’s building in Michigan at risk. Earlier this month, the House of Representatives passed a bill that eliminates tax credits for new and used EVs and imposes a $250 annual fee on EVs for road repairs. The bill would also restrict tax credits for batteries if they use components or technology from Chinese companies or if they’re made under a license agreement. The bill now needs to be approved by the Senate and if it does pass Congress, Ford chairman Bill Ford says it will “imperil” its battery plant in Michigan, because it’s going to use technology from Chinese battery maker CATL. The plant, which is 60% complete, is currently expected to start production next year.

CATL CLAIMS BATTERY BREAKTHROUGH
And speaking of CATL, the company says it made a breakthrough with LMB or Lithium Metal Batteries. LMBs are being considered because of their high-energy density. However, they’ve been difficult to commercialize because their life cycle is short. But CATL says it’s been able to double the life span of prototypes by using a different type of liquid electrolyte. And these prototypes have an energy density of over 500 Wh/kg, which is higher than solid-state batteries and more than double some NMC batteries, which typically have energy densities around 200-300 Wh/kg. And while CATL’s research is promising, LMBs still need more development before they’re ready to be used in electric vehicles.

BYD & GREAT WALL MOTOR FEUDING IN PUBLIC
The Chinese auto industry has been on a tear for more than a decade, but now it’s starting to run into some serious problems. The industry has way too much capacity. Thanks to the price war, few companies are profitable. And the export boom is slowing down as countries retaliate against the flood of Chinese cars. The chief of Great Wall Motors even warns that the Chinese auto industry is unhealthy and faces a crisis similar to the Evergrande collapse that devastated the Chinese real estate market. That prompted BYD, which has a very high debt level, to lash out against Great Wall, saying it doesn’t face any crisis at all. And when car companies start dissing each other in public, it’s a sign that big problems lie ahead.

NEXT-GEN ALFA ROMEO STELVIO DELAYED
Alfa Romeo’s shift away from going all-electric looks like it’s going to delay the launch of the next-gen Stelvio. The all-new version was supposed to be revealed at the end of this year and go on sale in the first quarter of next year. But now sources say that may not happen until the fourth quarter of 2026. The Stelvio will switch to the STLA Large platform and the brand is also developing a hybrid version now. The model was supposed to be all-electric and it sounds like the hybrid development could be what’s causing the delays. 

NEW JEEP CHEROKEE DEBUTS LATER THIS YEAR
Speaking of Stellantis brands, Jeep says the all-new Cherokee, which will be offered as an ICE, a plug-in hybrid or a pure electric, will make its debut late this year. So, stay tuned for that.

But that’s a wrap for today’s show and this week. I hope that you have a great weekend.