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Runtime: 11:09
0:00 Trump’s Budget Impact on Auto Industry
1:29 Rivian R2 Drive Unit Eliminates 30% of Fasteners
2:46 Ford Picks Up 2 Points of U.S. Market Share
3:25 Leapmotor Expects $7,000 SUVs
5:08 Ford Launches PHEV Ranger in Europe
6:22 Toyota Teams Up with China’s Top Tech Companies
7:09 Marelli Files for Chapter 11, Blames Tariffs
7:50 Dana Sells Off HD Transmissions for $2.7B
8:35 American Axle Lands Scout Contract
9:00 BMW Pairing Back XM Product Line
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
TRUMP’S BUDGET IMPACT ON AUTO INDUSTRY
A couple of weeks ago the U.S. House of Representatives completed its version of President Trump’s “one big beautiful” tax and spending budget. Now, the U.S. Senate is getting close to its version, and this bill is going to have a significant impact on automakers and suppliers. Look for the CAFE regulations, or the Corporate Average Fuel Economy standard, to get gutted. On top of that, as we’ve already reported, the subsidies to buy new and used electric cars gets phased out at the end of this year, except for automakers who have sold fewer than 200,000 EVs. For them, it gets phased out at the end of next year. The subsidies to build battery plants will also get the heave-ho, but not until 2031, which means plants currently under construction will still qualify for government money. There is at least one proposed item that would definitely help car buyers, which allows them to deduct the first $10,000 of interest on a car loan when they do their taxes. The next step in the legislation is for the House and Senate to negotiate, or reconcile, any differences in their versions of the bill. We should know the outcome in about 3 weeks since the President wants this all wrapped up by the fourth of July.
RIVIAN R2 DRIVE UNITS ELIMINATES 30% OF FASTENERS
Rivian released a video that continues to provide more detail about its all-new R2 platform, which is scheduled to go into production sometime in the first half of next year. It revealed how design worked with engineering to make sure everything looks good, but isn’t too expensive to build. We even get a little peak at what some of the interior combinations might look like. It then transitions to how it applied a similar philosophy to its new drive unit, reducing fasteners by 30%, while increasing power density by 40%. To test those drive units, Rivian created its own in-house developed dynos, which are actually powered by the same motors used in its R1 models. I think there’s also a few references to its partnership with VW, saying that it’s “understanding and optimizing the use case of the drive unit in a larger market across the globe.” And then adding of its new electronic architecture, “over the next year, we’ll take that to more vehicles than anybody’s been able to do with a zonal architecture to date.” Right now Rivian is still working with test mule versions of the R2, but the next stage is actual production prototypes.
FORD PICKS UP 2 POINTS OF SHARE IN U.S.
Ford’s employee pricing discount, which it started offering in April in response to Trump’s tariffs, is really paying off. Sales shot up 16% in May and Andrew Frick, the President of Ford Blue and Ford Model e, says that boosted its market share in the U.S. to 14.7%, nearly 2 percentage points higher than a year ago. And it should continue to help because the company is offering the discount until the beginning of July. Ford believes Trump’s tariffs will do it less harm since 80% of the vehicles it sells in the U.S. are made in the U.S.
LEAPMOTORS SAYS SUV PRICES WILL DROP TO $7,000
New vehicles in China are inexpensive compared to other major car markets. But Leapmotor’s CEO believes prices are headed even lower. He says it’s “reasonable for automakers to sell a mid-to-large SUV for $7,000 in the future as costs decrease.” That will come in the form of advancements in technology, especially with increasing integration of chips. In the future, Leapmotor’s CEO says the main cost of a car will be the system-on-chip, raw materials and processing fees.
FORD LAUNCHES PHEV RANGER FOR EUROPE
Ford started production of the new plug-in hybrid version of the Ranger in South Africa and the first customers in Europe should be taking delivery soon. The powertrain is a combination of a turbocharged 2.3L gas engine, 10-speed automatic transmission with an integrated 75 kW or 100 horsepower electric motor and a roughly 12 kWh battery pack. The setup sends about 275 horsepower and over 500 lb-ft of torque to all four wheels, which allows the PHEV Ranger to tow up to 3,500 kilograms or over 7,700 pounds. No word on overall range, but Ford says the truck can travel 43 kilometers or about 26 miles on electric-only power. This will also be the first Ranger to come with Pro Power Onboard, a feature that’s popular with F-150 and Transit customers that allows them to power all kinds of other devices from the back of the vehicle. While the Ranger is sold in 180 markets around the world, there’s currently no plans to bring the plug-in version to the U.S. Instead sales will be concentrated in Europe, Australia and New Zealand.
TOYOTA TEAMS UP WITH CHINA’S TOP TECH COMPANIES
Toyota is embracing Chinese companies to help speed up its EV and software development. As we reported recently, the new bZ5 it launched in China uses powertrain and battery tech from BYD. And now Toyota and its joint venture partner Guangzhou Automobile, have signed deals with Huawei, Xiaomi and Momenta. It’s bZ7 sedan, which launches early next year, will feature connectivity tech and smart devices, including tablets and speakers from Xiaomi. Huawei will provide the operating system for the car’s infotainment and it’s also developing an AI voice assistant. Lastly, Momenta is providing its new driver assistance system, which will first show up in the bZ3X.
MARELLI FILES FOR CHAPTER 11, BLAMES TARIFFS
We’ve got some important developments in the supplier industry. Marelli made it official. It’s filing for Chapter 11 bankruptcy. The company is blaming Trump’s tariffs but Marelli has been in financial trouble for years. The tariffs may have been what pushed it over the brink, but they’re not the root cause of the company’s problems. One thing that’s hurt the company is that it’s a major supplier to Nissan, which is also in deep trouble. However, there is a silver lining in Marelli’s Chapter 11 filing: most of its debt is getting eliminated and it’s getting more than $1 billion in new financing.
DANA SELLS OFF HD TRANSMISSIONS FOR $2.7B
Dana, which is famous for its transmissions, differentials and axles, is selling off its heavy-duty transmission business to Allison Transmissions for $2.7 billion. Those transmissions are for off-highway applications like construction and mining vehicles. Dana will now concentrate on light and medium duty vehicles exclusively. But it’s another supplier that’s been struggling financially, finishing the first quarter with only a 1% profit margin. Its CEO, Bruce McDonald, says the money it’s getting from selling its heavy-duty transmission business will strengthen its balance sheet, provide investment funds for the future, as well as return capital to shareholders.
AMERICAN AXLE LANDS SCOUT CONTRACT
And American Axle announced it got the contract to supply Scout Motors with front electric drive units and rear e-beam axles for the Traveler SUV and the Terra pickup truck. Those body-on-frame vehicles will be offered as pure BEVs, or with range extenders. Scout plans to be in production in 2027 at a new plant it’s building in South Carolina.
BMW PARING XM MODEL LINE
Automakers sometimes try to fill too many gaps in a segment and the BMW XM probably fits into that category. Only the second model ever fully developed by the company’s M brand, it’s a plug-in hybrid that costs well over $100,000. That’s why we aren’t very surprised to see that it’s slashing how many versions of the vehicle it sells. In Europe, instead of three models, there will now be just two; one version with a V8, which starts at over 183,000 euro in Germany and one version with a V6, which starts at about 143,000 euros. The U.S. will now only have one V8 version as well. And Automotive News reports that an all-electric version that was supposed to go into production in 2028 has been axed and there’s no plans for a second-gen model, which would have also come in 2028.
But that brings us to the end of today’s show.
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it’s very unfortunate that you chose to put Leapmotors laughable claim front and center in today’s show. If any naive listeners believe they will ever be offered a ‘mid size SUV” for $7,000, or even $21,000 for that matter, outside of China, they will have to wait very long. As in FOREVER.
This is true for all vehicles that China actually sells now in its domestic market for less laughable but still dirt cheap prices. WHen they import them to any European country, they sell them for two and three and five times those amounts. ANd there is no reason to believe they will sell them for less in the US market, if they are ever allowed to sell them here.
Leapmotor’s announcement reminds me of what happened to the calculator market. Prices kept dropping as the chips to operate them got cheaper to the point that they can be purchased for only a few cents. BUT a professional calculator used in an accounting office still costs more than $100 because of the physical demands of day long use.
The limit to cheaper cars will not be based on chip cost but the cost to manufacture reliable body and suspension systems.
I think you mean the lower level BMW XM will be offered with a straight six, not a V6.
Abermarle, …and powertrain parts, like motors gearing, CV joints, etc.
Abermarle,
Exactly. We already have examples of that with the Yugo and to a lesser extent the VW beetle. The Yugo was very cheap, but was horrifically unreliable and just generally not a nice place to be when it was working. The VW beetle was also cheap but, if people are honest with themselves, not a very good car overall really. If we step further back, Crosley made a very cheap car, but nobody liked it because it was small and slow. It was also unreliable and uncomfortable even by 1940s standards; but it was cheap and that was not enough. It would be awesome to have a toyota corolla at half the price, but that is unrealistic.
The VW Beetle was a decent car, for the time, for a small car. I had one when in Scotland in 1970-1971, and it was much more reliable than its contemporaries from BMC, and maybe from Ford of UK. Of course, the heater of the VW sucked, and it needed frequent maintenance in the form of valve lash adjustments every ~3000 miles.
I think the Beetle was a joy for Beetle fans and a constant source of frustration for the rest of us. You’re correct Kit that we need to keep the times in mind when discussing old cars. I have had many vehicle passions in my life but the VW Beetle was never one of them. Ads were amusing though.
The Beetle was, by far, the most popular small car where I came from, the US, so it was a logical car to buy when in Scotland. The alternatives were Morris Minor, Mini, Ford Cortina, Vauxhall Victor, Hillman Avenger, and a few others. I saved a lot of money buying a US spec car, but having an LHD car in the UK was not the greatest.