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Runtime: 9:28
0:00 U.S. Hits EU Cars With 15% Tariffs
0:48 Audi Blames Trump Tariffs for Profit Plunge
1:36 U.S. DC Fast Chargers Installed at Record Pace
2:49 Tesla Plans Chauffeur Service with Human Driver in California
3:22 Tesla & Samsung Sign Chip Deal
5:12 New Spy Shots of Tesla’s Cheaper Model Y
5:45 BYD Execs Can’t Travel to India
6:43 Carmakers in China Face Widespread Consumer Complaints
7:30 Stellantis Hires New Head of Design for Europe
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
U.S. HITS EU CARS WITH 15% TARIFFS
The Trump Administration and the EU agreed to a trade deal that’s going to hit imported European cars with a 15% tariff. Last week the stock prices of European automakers started climbing as a deal looked likely, but they’re down today as the reality of that is starting to sink in. The U.S. used to charge a 2.5% tariff on imported cars from Europe, so the new level is 6 times higher. On a $50,000 car, that 15% comes to $7,500, which is next to impossible for an automaker to absorb on its own. And that means prices will go up.
AUDI BLAMES TRUMP TARIFFS FOR PROFIT PLUNGE
As if to put an exclamation point on the impact of the tariffs, Audi is blaming them and restructuring expenses for a big drop in profits and free cash flow. Audi sold over 400,300 vehicles in the second quarter, which was down more than 8%. That includes the Bentley and Lamborghini brands. It brought in just over €17 billion in revenue, which was down fractionally, but its operating profit dropped nearly 64%, and its profit margin sank to 3%. Net cash flow fell 50%. And that’s just for one quarter. But Audi seems to think that the second half will be better. Its guidance for investors predicts things will be a little bit worse than last year, but not by much.
U.S. DC FAST CHARGERS INSTALLED AT RECORD PACE
Well, here’s a pleasant surprise. The DC fast charging network in the U.S. is growing at a record-breaking pace. A company called Paren, which tracks the charging network, says 16,700 DC fast charging ports will open this year. At the current rate of growth, the U.S. will surpass 100,000 DC charging ports by 2027, or double the number from last year. Better still, Charge Point Operators, or CPOs, are standardizing around 350-400 kilowatt chargers. The reliability of chargers is also improving, standing at 85.5% uptime, and the prices that the stations charge for electricity is coming down. The CPOs are opening new charging stations as well, but most of them are going into existing locations to reduce wait times. However, here’s the most astonishing fact about the record installation of new DC chargers. Only 2-3% of the cost was covered with federal subsidies from the NEVI program, or the National Electric Vehicle Infrastructure. All that growth is really coming from private industry.
TESLA PLANS CHAUFFEUR SERVICE WITH HUMAN DRIVER IN CALIFORNIA
Contrary to reports last week, Tesla is not going to expand its robotaxi service to San Francisco. Instead, according to the California Public Utilities Commission, Tesla will offer a chauffeur-like service operated by a human driver in a non-autonomous vehicle. And it won’t be open to the public, only friends and families of employees and a limited number of selected riders can use the service. Tesla can’t use its robotaxis in California because it hasn’t applied for the required permits yet.
TESLA & SAMSUNG SIGN CHIP DEAL
And in other Tesla news, Elon Musk revealed that the company has secured a $16.5 billion chip deal with Samsung. Samsung will produce the next-gen chips at a new factory in Texas, which is expected to start production in 2027 or 2028. Samsung’s shares shot up nearly 7% after the deal was reported earlier today, pushing its stock to its highest level since last September. Samsung currently makes chips for Tesla that power its Full-Self driving system. Taiwanese semiconductor maker TSMC will make chips for Tesla’s HW5 system and then these new chips from Samsung will be used in HW6.
NEW SPY SHOTS OF TESLA’S CHEAPER MODEL Y
Elon Musk confirmed that Tesla’s new cheaper EV is “just a Model Y,” and someone in China just spotted what looks like several of these models in a parking lot. They appear to lack the new Y’s front LED lightbar and panoramic glass roof. They switch to a body-color trim in the rear, a shorter center console and fabric seats. And the screens in the rear have been removed. Since most of the interior is covered there could be more changes and there’s speculation Tesla could even mess with the battery size.
BYD EXECS CAN’T TRAVEL TO INDIA
Political tensions between China and India are preventing BYD executives from obtaining visas to travel to India. Ever since a clash between Chinese and Indian soldiers in 2020, India hasn’t allowed executives from Chinese companies to enter the country. So, in order to run its Indian operations, BYD is holding meetings in nearby countries like Sri Lanka and Nepal. But that’s not the only obstacle BYD faces in India. The government also rejected a $1 billion plan to build a plant in the country, so it has to import most of the cars it sells, which get slapped with high tariffs that double the cars’ cost. Despite all that, BYD is steadily growing in India but its sales are still relatively small. Last year, it sold 3,500 cars in India and nearly reached that total in the first half of this year.
CARMAKERS IN CHINA FACE WIDESPREAD CONSUMER COMPLAINTS
Consumers in China are not happy with the sales tactics of automakers and dealers. Reuters previously reported that brands Neta and Zeekr were insuring vehicles before they were sold because once a vehicle is insured in China it can be counted as sold. And automakers and dealers were doing this to keep up with sales targets. It wasn’t some secret either. Some customers were told this outright by dealers after realizing in some cases that their insurance was in someone else’s name. That has led directly to complaints on several different Chinese websites and Reuters uncovered it was far more than just Neta and Zeekr. Pretty much every automaker in China, including major foreign brands, had a complaint lodged against them.
STELLANTIS HIRES NEW HEAD OF DESIGN FOR EUROPE
There’s been a shakeup in Stellantis’ design ranks. Back when FCA and PSA merged to become Stellantis, the role of Chief Design Officer was split in two, Ralph Gilles was given the Americas and Maserati and Jean-Pierre Ploué was in charge of Europe. But when new CEO Antonio Filosa took over he chopped that back down to one with the role of Chief Design Officer going to Ralph Gilles. And now comes an announcement from Stellantis that Ploue will leave the company altogether. No word what the next chapter of his life might have in store or even a thank-you for your services. As a replacement, Stellantis poached Renault designer Gilles Vidal to be in charge of its European brands, including light commercial vehicles. Vidal will work closely with Ralph Gilles and report directly to the company’s COO of Europe.
Don’t forget that John and I will be doing a live Q&A tomorrow at 2:30PM EST. We’ve got a number of hot topics to dive into, even a few that might stir up some controversy. We’d love to get your questions as well. You’ll need to be a YouTube or Patreon member, so if you’re interested please consider joining. Plus, you’ll get access to a lot more content.
But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.
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Where do I claim my prize ? Finally – you guys said it ! ALL the numbers out of china are LIES.
You left out something AGAIN – its wasn’t just to reach sales targets- every FAKE SALE was given a cash
payment- you said the CCP was cracking down on this, but they were fully aware they were paying out cash for every fake sale !
Oh by the way – the chinese economy is growing at 5.4 %— right….
in a deflationary price spiral !
Communism is poverty for all – ask a Cuban or Russian about most glorious workers paradise.
Sean,
Unfortunately, your conclusions (or conclusions you read by some journalist with weak econs background, but adopted as true), are all wrong.
If Mercedes raises the price of a $100k S class to $115k, you can rest assured the buyers, who are not stupid (if you are so smart, why aren’t you rich), will NOT buy it. THey have many alternatives, and if the incompetent “big 3” domestics had an S Class caliber vehicle, they would BENEFIT from this.
So you are wrong that “prices will go up”, if they do, people will not buy the cars, so Mercedes will have to EAT most or all of the tariff.
You also compare the 15% tariff to the silly old 2.5. You should make THIS comparison instead
Before Trump’s VERY MODEST 15% tariffs, I could buy a $100k S class for only $102.5K. plus state sales tax IF any, and where there IS such a tax, it is a very low 4-6%
However, if a German wanted to buy a $100k ESCALADE (fat chance), he would pay 24% VAT, triple the “tariff” that the american paid for his S class.
Was this FAIR for your buddies the incompetent 3? of course NOT!
So there.
The sales tax rates in the two states where I live are 7.0 and 7.02%, not 4-6%.
Anyway, to people who buy new S-Classes, 7 series, Bentleys, and Rolls-Royces, a few thousand, or tens of thousands is nothing. The tariffs are going to affect vehicles in price sensitive parts of the market a lot more, even if the numbers are smaller. With Europeans, Mini, some VWs, and BMW 2-series come to mind. Then, there are the tariffs on Japanese cars like Prius and Subaru Forester which are in a very price sensitive market segments. Of course, the war on Canada and Mexico will be most destructive, both for the “Detroit 3” and for Toyota and Honda. Trump just actively wants to destroy the auto industry, and maybe the global economy along with it.
@Regulus: Value Added Tax is along the lines of a sales tax*) and has no relationship with import duties. Any American exporter to or domestic producer in the EU (TESLA and Ford for example), European domestic automaker, or Asian exporter to EU or local producer in the EU has to charge VAT and therefore it no disadvantage to any company or any origin of production.
*) it is different from a sales tax as follows. A sales tax is a tax on revenues. A value added tax is charged when you buy a product but is reimbursed to you when you use the product to make something else and sell that, charging VAT to the next buyer. So you end up paying only a tax on the value added you create, not on the total revenues.
Of course like any tax rate it should and could be lower if governments would be more efficient but that is a different topic.
The point is that VAT is NOT a disadvantage to any automaker from outside of the EU, both when exporting to the EU or producing in the EU. And in the end just pass it on to the final customer.
Regulus, you make no sense in saying that there are many alternatives to an S-Class to avoid tariffs. The only alternatives, 7 series and A8 are also German. Yes, the real alternatives are used S, 7, and A8, but unless you consider Escalade and Navigator alternatives, there are no domestics.
Sorry, but a tariff is a wholesale sales tax. It is invisible to the retail buyer but it is a government levy on the stated value of the product when it enters the country. At that point, the “buyer” is the importer and the sales tax is collected from the importer and remitted to the government.
The tax is a barrier to trade at the wholesale level.
And, how many “naive” auto companies are about to trust the word of a despot who changes the rules between breakfast and morning coffee? If they already have a plant here they may put some modest money into changing the product mix but none of them is dumb enough to invest their own money into that situation. Serious incentives that would cover the entire cost of the plant would be the ONLY way to get a foreign manufacturer to step into this quagmire. They are not THAT dumb.
How does it make any sense to penalize local manufacturers by giving foreign manufacturers a reduced tariff? Profit margins are razor thin (under 5% last year). So let’s penalize our own manufacturers.
The only new workers in any expansion of manufacturing facilities will be the robots.
@ ReguLarry… a business will maximize profits where marginal revenue equals marginal cost (Microeconomics 201). In essence, the tariffs raise the marginal cost curve. Simple trigonometry will show that even a monopolist will pass no more than 1/2 of the tariff to the customer. Given the existence of many “substitute” products for auto shoppers, I believe most economists will agree less than half the tariff will be borne by the car buyer.
More significantly, finally someone is using some common sense. The value Model Y offers significant value versus the pricier Model Ys. A glass roof with no sun shade (regardless of UV filters) never makes sense with vinyl seating. I much prefer cloth seats and rarely open the sun shade on my moonroof vehicles. Are you listening Ford Mach E planners and marketeers?
Foreign automakers can avoid tariffs by moving more production to the US. Even VW is running commercials about their proudly American made models from Chattanooga now, following the lead of Ford and GM. The tariff plan is seeing real results in foreign production moving to the US in multiple industries. Meanwhile inflation is down, eggs and gas are cheap (other than CA), and the stock market is at record highs despite all the “experts’ “predictions. They have been consistently wrong.
Speaking of California’s gas prices, they are down to three refineries in the state thanks to their insane regulations. Vallejo has had enough and is closing theirs in months. Now Newsom is in a panic because his policies, which already have gas at $5.90 a gallon, will have caused the prices to spike even higher. This should be a Green Warrior’s dream result, so why isn’t he celebrating a victory? Instead he begged Vallejo not to close and they told him to get bent. He’s desperately searching for a buyer to keep it open. Your policies claimed another polluter scalp, Gavin, now stew in the predictable disaster for you and your state.
It makes sense to make large numbers of a certain vehicle the same place, the largest market for that vehicle, rather than make a few in ten different plants. That’s why BMW builds most, or all X5s in the US. That’s the biggest market, but they sell them almost everywhere. They build their cars, like 5 series in Europe. the biggest market. The tariffs will just result in less choice. Yes, some production will move to underutilized plants in the US, resulting in higher prices. Also, it will probably result in worse quality, with a lack of qualified work force, especially trades people to keep the plants running properly.
BTW, inflation is up, in spite of gas being down a little, and will go much higher when the full effect of Trump’s trade war hits.
Speaking of gas prices, why is premium an average of $1.04 more than regular in Indiana, and only $.40 more in California? Sean, would you know?
Daily, you seem to be making up sh-stuff like Trump. According to AAA, as of 07/28/2025, today, gas is not $5.90 in California. It’s $4.475 for regular and $4.885 for premium. Yes, that’s more than other states except Hawaii, but even premium is a dollar less than $5.90.
https://gasprices.aaa.com/state-gas-price-averages/
THE VIEW FROM EUROPE: EU-US TARIFF AGREEMENT IS MAJOR VICTORY FOR TRUMP AND US INTERESTS.
Immediately after the announcement of the EE-US tariff agreement in Europe (where I live half the year), commentators and pundits (for whatever these clowns are worth) unanimously declared it as a major victory for Trump, and US interests.
I know in this forum there were a lot of premature lamentations about the evils of tariffs by the usual suspects (who same suspects however refused to realize that the huge VAT tax in Europe (to which the S class I buy in the US is NOT subjected) on US auto exports in Europe works just like a one-sided, unfair, huge tariff.
And I could care less what the ‘intentions’ of the worthless bureaucrats in Brussels who imposed the VAT. The road to hell is paved with good intentions.
wim: I am fully aware what the VAT tax is. Different EU nations use it for different purposes, but it does not really matter, because:
An S class shipped to the US will NOT pay the VAT Tax. Same for any other European imported car to the US marker.
However, an Escalade WILL pay the Vat, if it is imported in the EU.
Where is the justice of that? VAT works exactly as a tariff or other barrier to trade.
The VAT tax would not be a barrier to trade in Europe ONLY if the S class produced in Europe and imported to the US ALSO pays the very same VAT that an Escalade sold in Europe pays.
Regulus, there is VAT on an Escalade AND an S-Class sold in Germany. The Escalade is not being “discriminated against” in this regard. You are making no sense on this.
Kit, on Victor Davis Hanson’s podcast the other day he said he just paid $5.90 a gallon and he lives in California. Maybe his area really gets hammered but there you go.
Inflation is down to the 2% range, far from the 9% we all enjoyed under Biden, or really his handlers who actually ran the White House.
VAT is actually a barrier to imports because GM, for example, does have to factor the VAT into the price of that Escalade. So in that respect, it is a defacto tariff.
I would buy an Escalade over an S-Class these days. The interior of the S-Class does not justify the cost of that car. It is like a cheap las vegas hotel room. How I miss Mercedes of yesteryear with the high class interiors. Then there are the reliability issues with the S-Class that I would prefer not to have my wallet explore. The Maybach with the V12 is somewhat intriguing to me as it is the last of the V12 engines and the interior in the rear is decent, but I would still rather get the Escalade. The Escalade also has a cheap vegas hotel room interior, but at least it is cheaper than the S-Class and can tow/haul more people/things. The S-Class also lost its status symbol moniker a while ago. Nobody cares if you drive an S-Class these days. Nobody really cares if you drive an escalade either, but the escalade edges out the S-Class for those looking to chase “status”. I just do not see the value proposition in an S-Class over the cheaper Escalade. Maybe for those looking for a car and not an SUV the Mercedes may have some high price justification, but outside of that not really.
Daily, yeah, the AAA chart shows state averages, not specific areas. As far as inflation, yes, during the recovery from the pandemic, supply chain disruptions, etc., inflation was very high for a while, almost Reagan era high of 1981. Still, it is now increasing month by month, but yeah, the numbers are much smaller than in 2022. Again, VAT applies to both imports and European cars sold in Europe.
MERKUR, the EQS, both car and SUV have truly underwhelming interiors, for the price. I haven’t seen a current gas S-Class. Is it that way too? I read that the Escalade V-Series is being promoted in Europe by distributor AEC. It would certainly excel as max-outrageous for a few people who have plenty of money, and want to be noticed.