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Runtime: 12:23
0:00 Tesla Sales Down in China, Again
0:42 Marketing Strategy? Musk Disses Trump’s Budget
1:36 U.S. Car Sales Up in May
2:31 Another Ship with EVs Catches Fire
3:17 Euro NCAP Critiques Tesla, Volvo
5:48 China Rare Earth Ban Shuts EU Factories
6:59 VW Sniffs Out Growth in Africa
8:05 Nissan Talks 3rd-Gen Leaf
9:12 ZF EV Unit: Smaller, Lighter, Stronger, Cheaper
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TESLA SALES DOWN IN CHINA, AGAIN
More bad news for Tesla. Sales in China fell again in May, and they’ve fallen every month this year even though EV sales overall are roaring ahead in China. It looks like the new Model Y, which has been on sale there since February, is not turning things around. Last month, Tesla shipped 61,662 Model 3s and Ys from its plant in Shanghai, down 15% from last year.
MARKETING STRATEGY? MUSK DISSES TRUMP’S BUDGET
Meanwhile, Elon Musk is back in the news for trashing President Trump’s “one big beautiful” budget proposal. Musk called it “a disgusting abomination” that will add trillions to the national debt. There’s all kinds of speculation about why Musk is turning on the President. Some say it’s because Trump eliminated EV subsidies. Others say it’s because the Administration ignored Musk’s suggestion for the new head of NASA. But I’ll make this point. Musk drove tens of thousands of customers away from buying Teslas because of his close association with Trump and his politics. Musk must know that the faster and further he distances himself from Trump, the sooner he might get some of those people to start shopping for Teslas.
U.S. CAR SALES UP IN MAY
Sales of new cars in the U.S. last month were up almost 7%, or at least they were for the automakers who still report monthly sales. Ford was up more than 16%. Toyota was up almost 11%, Hyundai-Kia and Honda were up more than 6%. But Subaru was down more than 10% and Mazda fell more than 18%. Wards Auto reports that the SAAR, or seasonally adjusted annual rate came in at only 15.6 million vehicles. That’s down sharply from the 17 million plus that sales hit in March and April. And that suggests that automakers and dealers are running out of pre-tariff inventory. We think they’ll have exhausted that inventory by the end of this month, and that July sales are going to show a sharp slowdown.
ANOTHER SHIP WITH EVs CATCHES FIRE
Uh-oh, here’s what could be another black eye for EVs. A Chinese cargo ship carrying cars had to be abandoned in the middle of the Pacific Ocean after it caught fire. The ship, which was travelling from China to Mexico and had 3,000 cars on board, 800 of which were EVs. The U.S. Coast Guard operating out of Alaska had to evacuate all 22 crew members when they couldn’t put the fire out. Thankfully, no injuries were reported. We don’t know yet if the EVs were the cause of the fire, but it seems to be a problem with ships carrying EVs on board. There are at least four instances of ships carrying EVs catching fire.
EURO NCAP CRITIQUES TESLA, VOLVO
Euro NCAP, which rates the safety of vehicles in Europe, just tested the ADAS, or assisted driving systems, in several models and it says Tesla and Volvo need to do better. The Kia EV3, Porsche Macan, Renault 5 and Toyota bZ4x all earned “Very Good” ratings for providing “exceptional balance between driver engagement and safety backup.” But the Tesla Model S and Volvo EX30 received “Moderate” ratings. While Tesla’s Autopilot scored very highly in stepping in and avoiding a collision, Euro NCAP downgraded it because it says calling it Autopilot misleads consumers about its capabilities. Euro NCAP was also critical of Autopilot’s steering input, which it says is resistant to a driver trying to override it, and when the driver does, it automatically disengages it, limiting its usefulness. Euro NCAP downgraded Volvo’s Pilot Assist because like Tesla, it uses a center mounted touchscreen, which forces the driver to take their eyes off the road to view any alerts. And it wasn’t satisfied with Volvo’s system because it doesn’t shut off the system after repeated alerts for the driver to re-engage.
CHINA RARE EARTH BAN SHUTS EU FACTORIES
In late April China started restricting exports of rare earth magnets and other critical materials in retaliation to President Trump’s tariffs. And now we’re starting to see the impact. Last week, auto groups in the U.S. and India issued warnings that assembly lines could come to a screeching halt. Now Europe is sounding the alarm. CLEPA, the group that represents suppliers in Europe, says several companies already had to stop production and warned that more will soon do the same. Germany’s auto lobbying group, the VDA, says the shortage will soon disrupt or halt production in the country. Rare earths are used in a number of automotive components and China controls 90% of global production of the minerals. Even though the restrictions were in reaction to Trump’s tariffs, China is cutting almost everyone off, reminding them once again of how dependent they are on the People’s Republic. If you’d like more insight into what the U.S. is doing to mine and process rare earths, check out the video we recently posted titled “Ramping Up Rare Earth Mining in the USA.”
VW SNIFFS OUT GROWTH IN AFRICA
You’ll probably never hear any senior automotive executive talk about this, but all the mature markets in the world have hit Peak Auto. North America, South America, Europe, Japan, South Korea and yes, even China, have seen their car markets stop growing. More cars were sold in those markets a decade ago than are sold today. There are only two regions left in the world that could offer strong growth: India and Africa. That’s why Volkswagen is targeting Africa. It’s currently scouting locations for an assembly complex in Egypt to export vehicles across the continent. VW is considering using existing factories to build vehicles or go with a greenfield site. VW currently has a full manufacturing complex in South Africa and assembles vehicles in Kenya, Rwanda and Ghana, but it wants to operate at least 5 new assembly plants in Africa over the next 10 to 15 years.
NISSAN TALKS 3RD GEN LEAF
Nissan is launching the third generation of the Leaf to try and recapture the advantage it had when the car came out in 2010. A key goal of the program is to provide a truly credible alternative to combustion cars. Along with all-new styling, the car is credited with a coefficient of drag of 0.26, though European versions get a 0.25 rating, presumably thanks to narrower tires and smaller mirrors. Other aero details include flush door handles, active grille shutters, and flush wheel covers. An electro-chromic glass roof also contributed to the aerodynamics with a flushed mounting, and it helped preserve head room by eliminating a retractable sun shade. Unfortunately, that’s all the info that Nissan has released so far. It’s putting out a 3-part video series to build interest in the car, and we’re going to have to wait until those videos hit to get more info.
ZF EV UNIT: SMALLER, LIGHTER, STRONGER, CHEAPER
Yesterday, ZF unveiled an intriguing new powertrain unit for EVs that it’s developing. They call it SELECT and it combines the e-motor, inverter, gear reducer and differential into one package. Or, automakers can select which part of it they want to use, and integrate their own components. ZF says the complete unit, using all of its components, is only 89 kilograms, or 196 pounds. It displaces a total volume of only 66 liters, can accommodate outputs up to 300 kilowatts, or 402 horsepower, and costs 15% less to manufacture. Thanks to using AI to identify hotspots in the drivetrain, efficiency increased 6%. And with the addition of a heat pump, ZF claims a 30% better driving range, even at -25 degrees Centigrade, which is 13 below Fahrenheit. It also cleverly uses microprocessors for dual use. For example, when the on-board charger is not being used, the chips in the charger do other work. But ZF is still working to combine the inverter, on-board charger, AC/DC converter into one unit, including a boost charger that will take a 400-volt system to 800 volts. And it wants to add more aggressive regen braking which will bring the car to a complete stop without using the brakes, as long as the driver is not braking hard. ZF says it could put the entire unit into production within 2 years, though parts of it are already available for automakers to buy.
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NOBODY who left Tesla b/c of Musk aligning with the administration is going to come racing back just b/c he’s flip-flopped on yet another topic.
When I shop for a vehicle I typically have a few criteria like fitting my needs cost/value, comfort quality, reliability, serviceability and attractiveness. Not in that particular order. Never once has the political views or opinions of a CEO ever played a part of that decision. I find it hilarious that some people allow that to influence them buying one of the most expensive investments we make. In fact it’s not an investment it’s basically always a loss. The cost of transportation short of buying a collectible is almost certainly a losing proposition. So to be so emotionally fragile that you allow other peoples opinions to affect what you buy is beyond silly. If I required all CEOs to share my exact like mind I doubt there would be much I could buy. In the overall scheme of things it really doesn’t matter what Elon does or thinks. There are thousands of workers that may not even agree with him too that have stake in Tesla doing well. If your feelings are so hurt by Elon just think of the workers you’re helping. lol. Or go buy a lesser product because you require everyone you buy from to think just like you.
Another obvious possibility for Musk’s budget bill opinion is that he took more than 130 days off from running his companies to try to help reduce the size of our government and the annual budget with the goal of reducing the ever-increasing deficits, not to mention our national debt, and then this bill comes out that will wipe out the savings he did achieve ten times over in the first year it goes into effect. Kind of a hard pill to swallow when Trump was pushing to make dramatic changes to achieve a better measure of fiscal responsibility, and maybe avoid insolvency. If I was Elon, I would be pissed too. I think he feels betrayed by the administration and the Republicans in the House. The midterms are going to be interesting.
I doubt his opinion on the budget bill has anything to do with selling cars. It is likely exactly what he stated. He doesn’t like where things are headed with the budget bill. A lot of people share that opinion.
DOGE saved a pittance, compared to what is being wasted by the military, and low taxes for people who have enough money to last thousands of lifetimes.
As far as politics affecting buying habits, never, until Elon Musk, was there a CEO who would keep me away from their products. Only Elon, along with Trump, has managed to destroy the reputation of the US around the world in a few months, cause deaths of people in the global south by shutting down USAID, and much more. Added to that, there are a lot more good EVs on the market, for those wanting an EV.
I completely agree with Elon that the debt is a problem, getting worse because the cost of servicing the debt will increase, as US bonds are less safe and will need to pay higher yields.
The reputation of the US is way stronger now that we actually have someone that is cognitive and enforcing our constitutional laws. Its obvious to everyone except the ones that only trust what CNN tells them to think.
Kit for sure,agreed. I would like to also add how poorly us Canadians are being treated after being such good friends for decades.
Lambo, Trump cognitive, and enforcing constitutional laws? Surely you jest.
Lambo —
When it comes to buying/leasing a vehicle, your right that, what is of most importance, the vehicle fitting ones needs. Yet, a buyers concerns about what a vehicle purchase says about them, has been a point of interest looing before Tesla began making automobiles. I mean why would people get a Rolls Royce, Mercedes, BMW, Volvo or other luxury vehicles, over a Ford, Chevy or Chrysler?! Tesla’s are consided a premium vehicle, so a measure of status may come with the purchase or lease. While whether or not a vehicle suits were the only barometer.for a purchase, why would anyone get a Ferrari, when a Corvette, Mustang Cobra or Viper will do? Why a Cullian, when a Suburban or Tahoe would be.just as good? Prestige.sells too! So if some of Tesla’s shine is gone, along with newer and prettier things have come to market, why wouldn’t a socially conscious buyer go somewhere else?
As people who have been here a few years know, I’ve had a number of cars that had little to to with my needs. No one needs a Corvette or Cayman. They are for fun to drive, and are “cool,” depending on who you ask. It turned out, though, that both were the best investments I’ve ever had with cars. I sold the C8 for thousands more than I paid for it, and sold a 3 year old Cayman for about the same as I paid for it, losing only a few percent if you consider inflation. BTW, the only “premium” brand car I’ve had was the Cayman, because there are no alternatives from mainstream brands.
I now have two decidedly utilitarian vehicles, a Prius and a Highlander hybrid. I find that I am driving the Prius nearly all the time, except once or twice a week when I need more space for toys for short trips. For now, the Highlander is not depreciating, and may increase in value when the tariffs’ effect increasingly comes into play.
I will not look at the comments, but just from the show title and editorializing, my response is that once upon a time in the US, you were PRESUMED INNOCENT. Unless, of course, you are an ‘evil billionaire’, or a “top 1%er”.
I find it laughable to attribute Musk’s genuine disgust with the budget bill, which is NOT Trump’s bill ANY MORE but MUTILATED by the CORRUPT SENATORS who negotiated to vote for it ONLY IF they got their PORK. THIS is what Disgusted Musk and Myself too. the god damned PORK which our corrupt Congress STILL inserts in bills and widens the deficits against ALL MERITOCRACY. “EARMARKS”. I am disgusted too.
ANd it had nothing to do with any “MARKETING STRATEGY”, a laughable claim about somebody like Elon Musk.
Oh, and an update on our prior U of Michigan President Santa Ono, the shortest-lived UM president who resigned after 3 years (abandoned a $1.3 mill a year salary plus HUGE perks) to just be a ‘finalist’ for the prez of the U of Florida position. Apparently he lost that too and now is UNEMPLOYED (my heart goes out to him… NOT!) THe very conservative trustees in Florida (Governors or whatever they are called, of thar U system) grilled Ono and were not satisfied that his recent anti-woke stance (after years of spending $250 million a year on that cancer of DEI at MI before he closed it down) is true or just pretending, so he can get the lucrative Job in FL (which can pay up to $3 mill a year!).