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Runtime: 10:33
0:00 U.S. Car Sales Dropping Due to Trump Tariffs
1:07 Musk’s Politics Are Hurting Tesla
2:03 Cybertruck Q2 Sales Only 5,000
2:56 Toyota RAV4 #1 In the World
3:31 A Golden Moment to Buy an EV
5:39 Now, Even Honda Backs Off Fuel Cells
6:31 Foxconn Could Build EVs In Nissan Oppama Plant
7:16 ZF Develops EV Transmission
7:40 Autoline Poll on EV Subsidies
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
Welcome back, we had a great mid-year break, but we’re excited to get back to catching up with all the latest developments in the industry.
U.S. CAR SALES DROPPING DUE TO TRUMP TARIFFS
New car sales in the U.S. market are definitely signaling tougher times ahead, and it’s all about those tariffs. S&P Global projects that June sales were just under 1.3 million vehicles. That’s down 2.8% from a year ago and more than 13% off from the month before. The SAAR dropped to 15.6 million units and remember, at the beginning of the year, before Trump enacted those tariffs, analysts thought the SAAR would be around 16.3 million this year, so that would be a drop of 700,000 vehicles. And that’s just based on sales in June. Automakers are warning that the second half of the year is going to be worse as they run out of pre-tariff inventory and import volume shrinks.
MUSK’S POLITICS ARE HURTING TESLA
Elon Musk says he’s going to start a new political party in the United States, called the America Party. We usually try to stay away from political issues unless they directly affect the auto industry, and this latest move by Musk is definitely going to have an impact on Tesla, and not in a good way. Investors didn’t like the news. The stock was down 6% in pre-market trading, and the company’s market cap fell below $1 trillion. But even so, that’s still a sky-high market cap. In fact, Tesla is trading at 173 times its earnings, which is a crazy valuation. But with sales and profits falling, Musk desperately needs to pull a rabbit out of his hat, and putting all the time and energy it’s going to take into starting a new political party means less time devoted to turning Tesla around.
CYBERTRUCK Q2 SALES ONLY 5,000
The refreshed Model Y is helping Tesla claw back some sales, but they were still down in the second quarter. The automaker delivered just over 384,000 vehicles in Q2, which is up from the roughly 337,000 it sold in Q1, but it still represents a 13% drop from Q2 of last year. Meanwhile, Tesla’s ‘other vehicles,’ which includes the Model S, X, Cybertruck and Semi, are doing worse. All together they only had about 10,400 deliveries, which was down about 20% compared to the first quarter. While the company doesn’t break that out by model, Electrek estimates the Cybertruck accounts for about half those sales, or roughly 5,000 units, which would put it behind electric trucks from GM and Ford.
TOYOTA RAV4 #1 IN THE WORLD
In other Tesla news, the Toyota RAV4 dethroned the Model Y as the world’s best-selling vehicle last year. According to JATO Dynamics, Toyota sold about 1.187 million RAV4s in 2024, while Tesla sold roughly 1.185 million Model Ys. That’s not much of a difference, only 0.16%. But we think it’s another example of why Elon Musk should be putting more time and energy into Tesla.
A GOLDEN MOMENT TO BUY AN EV
If you’re considering buying an EV, now might be the time to do it. For the next couple of months, you can benefit from both President Biden’s and President Trump’s incentives. Biden’s $7,500 credit for buying a new EV ends on September 30. And Trump’s new Big Beautiful Bill allows buyers to write off $10,000 on the interest of loans for new vehicles, as long as the vehicle is less than 14,000 pounds and is assembled in the U.S. The write-off is retroactive to the beginning of the year and runs through 2028. Since a new EV costs around $57,700 on average, that drops to just over $50,000 with the EV tax credit. And with the new tax law, you can save $4,800 on a $45,000 loan over 3 years. So together that’s $12,300 in savings that are available until the end of September.
NOW, EVEN HONDA BACKS OFF FUEL CELLS
Honda’s efforts to make its own fuel cell module aren’t going to plan. While it currently makes fuel cells with GM in Michigan, Honda announced its next-gen module would be developed independently and made at one of its old powertrain plants in Japan. It aimed to start production sometime between the first quarter of 2027 to the first quarter of 2028 and have an annual production capacity of 30,000 units. But now it says it will reduce its initial production capacity and delay the timing to full production. However, it didn’t reveal what it expects volume to be or a new timeline to hit full production. Honda also backed out of a government program in Japan that aims to establish clean energy supply chains because it wouldn’t have been able to meet the requirements to get the subsidies.
FOXCONN COULD BUILD EVs IN NISSAN OPPAMA PLANT
Nissan is in deep trouble and it’s talking to Foxconn about making EVs at one of its plants in Japan. The Nikkei newspaper reports that the deal could also include a joint venture. Nissan’s new CEO Ivan Espinosa wants to close seven plants globally and the Oppama factory in Japan could be one of them. It’s the company’s oldest plant and employs 3,900 workers. So, a deal with Foxconn would likely save it. The possible partnership is part of Foxconn’s goal of becoming a global EV contract manufacturer. It already made a deal in May to supply Mitsubishi with EVs next year but those vehicles will be produced in Taiwan.
ZF DEVELOPS EV TRANSMISSION
ZF, a supplier probably best known for its transmissions, is making what is essentially its first transmission for plug-in hybrids and EVs. The reduction drive unit, which uses internal gearing to reduce the speed of the electric motor, will be used by what’s said to be a leading Chinese automobile manufacturer in a mid-size SUV that comes out in the second half of this year.
AUTOLINE POLL ON EV SUBSIDIES
We’ve got the latest results of the poll we posted before we went on our mid-year break. This was before Congress officially voted to kill off all incentives for EVs. Before they did that a number of car dealers, including Carvana and Car Max, told the US Congress they wanted to keep EV incentives in place. So, we asked you how you would like to see Congress vote on this. Over 1,500 people voted and 55% of you, well over half, voted to keep all those incentives in place. 7% said just keep the $7,500 sales rebate. 17% said just keep the incentives for manufacturing batteries in the U.S. And 21% of you said to kill all the incentives. Here’s some of the top comments.
User-to2rf1rj5v, probably captured what most participants were thinking. They said, “All incentives should be kept in place. If we’re going to do away with them, we must end all fossil fuel subsidies first. The EV incentives are helping keep the air we ALL breathe clean.”
Cakebattered pointed out something that definitely worries the car companies. “If you want American automakers to have even the slightest chance of competing with Chinese automakers, you’d be in favor of federal incentives,”
But Robert A Young probably captured the feeling of most people who said the incentives should be dropped completely. “If you want the vehicle, you should pay for it instead of asking other taxpayers to contribute.”
Thanks to all of you for participating in the poll. It’s interesting to see that the Autoline audience, and we know that so many of you work directly in the automotive industry, are in favor of supporting electric vehicles.
SANDY MUNRO ON AFTER HOURS
A quick programming note here. We have Sandy Munro coming on Autoline After Hours this Thursday. We’re going to ask him where he sees the future of EVs in the U.S. going, and of course, we’re going to have to get his input on the latest developments with Tesla. That should be a fun show.
But that brings us to the end of today’s reports, thanks for your support of Autoline Daily.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
Sean, Just out of curiosity, what are these fossil fuel subsidies you mentioned. I spent my entire career in the oil industry (not in the US) and the only ‘subsidies’ I ever saw were the same ‘depreciation’ allowances that every business gets. (Depreciation and depletion allowances ARE the same thing) Basically, if you invest $50 million to drill for oil, it is considered an investment (just like building a factory is an investment) and you could write that investment off against profits over the useful life of the well. On the flip side, there were a lot of additional taxes that were added only to the oil business, like road, government royalties on land they did not own, pipeline transit fees for shipping oil through pipes the government doesn’t own through land they don’t own, etc.
The ‘geniuses’ who replied to your poll, especially the one which you selected, who wants to ‘keep all the incentives”, MAKE ME SICK with their UTTER IGNORANCE.
He or she brings up that “fossil fuels get subsidies too”. These are MINISCULE compared to green energy subsidies, AND in the case of Oil, as I said mANY TIMES (but it goes in one ear and out the other), the oil subsidies, a tiny 35 or so billion in a many TRILLION dollar industry, are intended to help SMALL Oil compete with your favorite villain, BIG oil.
As for the MYTH of EVs polluting less, GIVE ME A BREAK. CHINA is the biggest EV market in the world and most of its energy, the VAST Majority of CHinese Electricity, is produced by COAL, the dirtiest fossil fuel there is. YOUR ICE car is FAR cleaner than the Chinese consumer’s EV! GOT IT, CLASS?
Another fairy tale is Biden’s $7500 subsidy. You always mention it but MOST people here will NOT be allowed to use it, because of the really LOW CEILING in your income, if you have a half-decent job, you do not qualify!
As for Musk, I thought that starting his own party, rather than being with Trump, would ENDEAR him to the fools who try to profit from day trading Tesla stock, most of them being math illiterate Greenies who do not understand, like our textbook case in this forum, that if you trade in a nearly new Prius Prime for your Tesla 3, you do not only pay the modest amount the dealer asks, you ALSO pay the full price for the Prius Prime you no longer own!
Glad to say I helped Toyota sell as many RAV4 ‘s as they did, I bought a nice RAV4 Hybrid and it’s the first foreign brand I’ve ever bought and I do really think it’s a better engineered vehicle than anything I’ve ever owned.
Welcome back, today is my first day after vacation also.
– Interesting approach by FoxConn. I suspect this may become a trend that will affect most if not all OEMs, as for their business model going forward. The ultimate “outsourcing” exercise.
– Do you expect RAV-4 to remain the top sales vehicle this year? If we go by US numbers, Model Y will end on top, but not sure if considering large drops elsewhere.
– ZF EV transmission. I suspect all EV drivetrains could benefit. high revs means higher losses, this will allow motors to spin slower. Am I over-simplifying?
– I’m kind of “tuned off” from Sandy since he became… no need to finish here 🙂
– Romulus needs a drink 🙂
Currently, about 53% of China’s electricity is from coal, but that is deceasing as more renewable and nuclear go on line. Since EVs are 70-80% efficient and gas cars are typically ~20% efficient, China may well be reducing CO2 emissions with their coal burning EVs, but I’m sure the air downwind of the coal plants is not good.
RAV4 is going to all hybrid for 2026. Unlike with previous RAV hybrids, they will sell them both FWD and AWD, at least in lower trims. Trump’s trade war will hurt RAV, which is built in Canada. I haven’t heard if they might move some production to US plants, or if they will just wait it out. Toyota has a number of US plants, but they may be running at near capacity.
EVs generally use high rpm motors, which are small and light for their power output. ZF will make reduction ratios according to what the OEMs want. A Model Y has 9:1 gear reduction, which is probably fairly typical for today’s EVs. EV transmissions are nothing but gear reduction, and don’t have much power loss.
Magna Steyr has been doing what Foxconn wants to do, building cars on contract. They currently build the Mercedes G Wagon, BMW Z4, and Toyota Supra, but have lost business recently with Jaguar shutting down I-Pace and E-Pace, and Fisker folding.
Kit, RAV4 production to my knowledge is in Georgetown Ky, and at a plant in Canada. A few of the RAV4 Hybrids are built at least the 2024 models in Japan as that’s where mine was built.
I’m sure tariffs will have an effect on sales if Toyota doesn’t absorb the cost. Which is unlikely long term .
Danny, thanks for info. I had the idea that all, or nearly all US market RAV4s were from Canada, but it sounds like they are from various places, probably depending on trim level and equipment.
My Highlander hybrid was from Princeton, Indiana. My Prius was from Japan. I think all Priuses for all markets are from Japan.
The ZF multi-speed gearbox doesn’t appear to be that different than what Porsche developed for the Taycan. There are a lot of options to make things more efficient, and that is one of those options. AMG is choosing to go the axial flux motor route along with Koenigsegg whom I suspect is partnered with AMG since they invented it. BYD is choosing to go the 30K RPM motor route which is yet another option. These options all have their pros and cons. It will be interesting to see where the industry as a whole lands in the future.
I doubt it will be the axial flux motors as those are expensive. It does have a purpose on expensive hyper cars like AMG and Koenigsegg build but not say on a Chevrolet Equinox. The Taycan and Audi E-Tron has been out for a while so I don’t see a lot of movement towards the expensive 2 speed solutions. By now surely every OEM has studied it and made a decision one way or the other and it is not looking good for multi-speed gearboxes. The speed of the motors has been steadily increasing for the past 15 years so I suspect that is where the industry overall is heading. That is where we find Tesla, Lucid and BYD going and these are all OEMs producing mainstream vehicles. So I strongly suspect that single speed gearboxes mated to high speed motors is the combination for mainstream applications going forward. Time will tell though.
The main thing to be gained with a two-speed gearbox with an EV is higher top speed while maintaining “normal driving” performance. Generally, it makes no sense. Physically small high rpm motors will clearly be the norm, with low weight, small footprint, and low use of rare materials for magnets, and low use of copper wire. Reduction gearing is cheap and reliable.
Regulus —
If your going to call EVs dirty because of the way the electricity they used is produced, we have to include the way the fossil fuel mined, transported to the refineries, refunded and then transported to local stations. So, if you’re calling an EV for where it gets its power from, to be fair, we have to do the same thing with the ICE vehicle as well! That said, the ICE vehicle is still spewing harmful emissions as you drive it, but the EVnot so much. I’m not suggesting an EVs hands are cleans, but it does seem that those of the ICE vehicle are much, much dirtier.
You then say “the oil subsidies, a tiny 35 or so billion in a many TRILLION dollar industry”! How much were the EV incentives and subsidies that previous administration? I may be wrong, but I don’t recall them being anywhere close to 35 billion.
Whatever Musk’s political goals are, are his business, there is just a few of things he should consider. As any of the CEOs of any major OEM, it’s hard to run automotive company! Musk, though, has his hands in Tesla, SpaceX, his solar company, his train company and now creating a third US political party! If that this is to become his focus, now more then ever, he might want to think about putting these companies in the hands for someone who can give it their fullest attention.
The Falcon and Starlink part of SpaceX seem to be running well, without much attention from Musk. There are frequent launches, mostly with re-used boosters, with few scrubs and fewer failures. The big rocket, Starship has done less well, with lots of explosions, some over Caribbean islands. I don’t know if more attention from Musk would change that, or if they just have more work to do. I’d guess that the designers are learning from the failures.
Tesla seems to be doing ok with building cars, as long as you are ok with years-old styling and the awful, to many people, operator interface. Still, the biggest reason for falling sales, both in North America and Europe, is Elon’s antics running off the very people who are likely EV customers. In China, all of the new, and generally good local competition is making a dent.
The Model Y has been the best selling car in the world a couple years for the same reason the Volkswagen Beetle was the best selling car in the the world from 1960-1973, the company had very few models competing with each other.
KIT:
Latest data (June 26, 2025!) to update your misconceptions about China, the (BY FAR) worst polluter and emitter on earth, the ONLY serious US economic rival, whom we still treat as a.. “DEVELOPING” nation
electricity generation in China in terawatt-hours: 9456.4
of which, coal: 5752.7
the huge US economy:
total electricity, 4499.1, practically HALF of China, of which ONLY 738.6 from Coal
But wait, there is more!
Carbon Dioxide EMissions from ENERGY use:
USA, 4619.1 billion tons CO2.
CHINA, 11172.8 MORE THAN TWICE THE US number. Some “developing” country.
If, pathological Trump haters, the above does not prove to you that President Trump was 100% CORRECT in withdrawing from the utterly unfair Paris Climate Accord, it is YOUR fault that you still do not get it.
.
Yes, China with four times the population of the US emits twice as much CO2. Of course, in addition to population, they have a lot of industry that uses a lot of energy.
The thing is, China is moving in the right direction, building a lot of renewable and nuclear to eventually reduce to amount of coal used. On the other hand, our fool-in-chief wants to kill wind and solar, mine more coal, and drill more oil wells. He says he wants to build nuclear plants, which I agree with. I hope that happens.
I used to be in favor of nuclear power plants until i learned about the extremely high de-commissioning costs which were rarely mentioned. I will admit this was about 35 years ago & not aware if the situation has changed. My source was some associates who worked for a large energy company that had nuclear plants. At that time the de-commissioning costs were greater than the commissioning costs.