AD #4092 – OEMs Spend $28 Billion/Year on Warranty; Rivian To Lose Significant Income; Xiaomi Dissed for Using Consumer-Grade Chips

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

OEMs SPEND $28 BILLION/YEAR ON WARRANTY
You want to hear a crazy number? Well, here’s a crazy number. Last year, all the automakers in the U.S., both domestic and import, spent $28 billion on warranty claims. That includes $13.6 billion for labor and $14.7 billion for parts, which is according to the National Auto Dealers Association, who collects all that data from car dealerships. That $28 billion was 12% higher than the year before and for car dealers it was a bonanza. Regular maintenance and repair work that’s paid for by customers is declining. So the warranty work that’s paid for by the factory is something of a godsend.

TESLA CHOPS MY PRICE BY $20K IN CANADA
As long as we’re handing out crazy numbers, here’s another one. Tesla is chopping the price of the Model Y in Canada by $20,000. Here’s the back story. In response to Trump’s tariffs, Canada imposed a 25% tariff on U.S. made vehicles in April. As a result, Tesla raised the price of the Model Y to $84,000 Canadian, which is about $61,500 in U.S. dollars. But at that price, orders dried up. So now Tesla is slashing the price of the Long Range AWD version of the Y by $20,000. It starts at $65,000 Canadian. Electrek speculates that Tesla is able to cut the price that much because it’s likely importing those Ys from its Berlin plant instead of the U.S. to avoid the big tariff.

   

XIAOMI DISSED FOR USING CONSUMER-GRADE CHIPS
Have you heard of the term mil-spec? It stands for military specification. The military sets extremely rigorous standards for all the parts and components it buys because they go through such extreme use cases. Well, the automotive industry has its own standards called “automotive spec” because cars also get pretty well beat up. All the chips, electronics and connectors in your cars are far tougher than anything used in consumer electronics. And I mention all that because Xiaomi has kicked off a serious debate in China for using consumer-grade chips in its SU7 sedan. Specifically, it’s using Qualcomm’s Snapdragon 8 Gen 3 microchips for controlling its instrumentation and entertainment systems. Tesla also experimented with consumer-grade chips a decade ago and reportedly had large recalls when the chips failed due to overheating. Other Chinese automakers are using consumer-grade chips, too, but like Xiaomi, only for entertainment and display controls. A key reason why they’re doing this is because it takes over a year of testing to qualify a chip for automotive grade. And with China’s “speed to market” mentality, those automakers don’t want to wait that long to use the latest chips.

MIRAI OWNERS SUE TOYOTA
While many automakers and suppliers are still developing hydrogen technologies, most have turned their attention away from passenger vehicles. And it’s easy to see why based on the experience of early hydrogen adopters. A couple dozen people have filed a lawsuit against Toyota, a hydrogen station operator, a joint venture called the Hydrogen Fuel Cell Partnership and California Governor Gavin Newsom alleging that they were misled about the viability of the hydrogen fueling network. There’s about 50 hydrogen stations in all of California right now and Shell exited the market last year, closing multiple locations. With that going on hydrogen prices at the pump have tripled. Several Toyota Mirai owners say they no longer drive their vehicle, even though they’re still making payments on them. Toyota itself made adjustments to the 2025 model year Mirai, chopping it down to just one trim line and limiting sales to California. But it’s even had to limit where it sells the vehicle in the state due to the shrinking infrastructure.

RENAULT GETS INTO ARMORED CAR BUSINESS
Looks like the president of France, Emmanuel Macron, is getting a little extra protection. While Cadillac is the most-common provider of armored vehicles for U.S. presidents, Renault holds that distinction in France. And it just handed over a new set of wheels to not only serve the president, but also foreign heads of state and other dignitaries. Renault took input from chauffeurs, security officers and mechanics in the presidential garage to come up with the necessary upgrades. That included extending the wheelbase of the Rafale SUV, which it’s based on, and adding armor that also required an upgraded suspension to handle all that extra weight. Then the vehicle was tricked out in exclusive touches like red, white and blue accents in the grille and stitching, a flag holder in the passenger front fender, French Republic badges embossed into the seats and armrests and real black and white marble on the dash, steering wheel and center console. 

RIVIAN TO LOSE SIGNIFICANT INCOME
Just like Tesla, Rivian is about to lose a huge source of revenue. Automakers can earn regulatory credits for selling low-emission vehicles, and they could sell those credits to other automakers that missed meeting their emission targets. Those automakers could pay a fine, but the credits were cheaper. However, President Trump’s new “Big, Beautiful Bill” eliminates penalties for missing emission targets, which means automakers don’t have any incentive to buy those credits anymore. Last year, Rivian generated $325 million in revenue from selling those credits. While that includes credits from states and other countries that won’t be affected by the new bill, analysts estimate Rivian would have lost out on $120 million in credit sales last year without the federal programs. For comparison, last year Tesla collected over $2.7 billion in regulatory credits, or about 10% of its total revenue.

VW CLOSES PLANT IN CHINA
In another sign that the China auto industry is starting to restructure, Volkswagen and its joint venture partner, SAIC, will close their plant in the city of Nanjing. Production has already stopped and the plant will be gradually shuttered in the second half of the year. The plant produced the Passat, which will now be produced at a nearby plant in the same province.

CHARGE YOUR E-BIKE W/THE KICKSTAND
A Dutch startup, called TILER, has an interesting idea for adding wireless charging to e-bikes. It developed a kick stand that can attach to about 75% of e-bikes currently sold and it integrates into the existing wire harness or plugs into the external port of the battery pack. So, when the kick stand is down and placed over the included charging mat, which can even be left outside, the battery starts charging without the need to plug it in. TILER is taking refundable pre-orders right now for 29 euros or about $34, while the total price of the system is 250 euros or roughly $300. Deliveries are mainly aimed at Europe and are said to start in the summer of next year.

AUTOLINE POLL RESULTS ON RE-GEN BRAKING
We’ve got the results for our latest poll where we asked members how they would advise automakers to set the regen braking on their EVs and hybrids. 48% of you said you love one-pedal driving and want it to be the default setting. 13% said do not make one-pedal driving the default. 19% said you like to set your favorite re-gen setting on the center screen and leave it there. And 20% said you like using paddle shifters to change the setting on the fly. We got a number of insightful comments as well.

Kyle Robinson said, “One pedal driving is one of my favorite electric vehicle traits. I will probably never have to do another brake job, which makes me real happy !”

Thomas Bowen posted that, “I’ve gotten used to one-pedal driving with my Teslas, but everyone has different preferences. The car should remember their preference. Give us the choice and make it sticky.”

Irvin Wright, said, “For my money, Tesla has it exactly right; strong regen and hold.  It is very rare for me to touch the brake.”

Bryan Falchuk likes the paddle shifters GM uses for regen on demand. He says, “I find myself trying to use it in other cars that lack it, which is a sign that it’s a useful and expected feature. (It’s) like looking at the center screen in the early days of backup cameras. When you’re in a car without one, (you) really notice when it’s missing.”

Thanks for all your comments, because this is really good feedback for the automakers to hear. And if you’d like to participate in all our polls, please consider becoming a Patreon or YouTube member. It only costs a few dollars a month, and it gets you access to a lot more Autoline content.

And with that we wrap up today’s report, thanks for watching.