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Runtime: 11:50
0:00 Chinese EV Sales Recover in Europe
1:02 Commercial Vehicle Sales Tumble in Europe
1:43 Commercial EV Sales Soar in U.S.
2:21 Exxon & Chevron Increase Oil Production
2:56 Stellantis Names New Head of North American Design
3:53 CATL Boosts EV Battery Exports
4:49 Honda Introduces Fuel Cell Stationary Storage
6:09 BorgWarner Expects Better Second Half
7:00 Magna Beats Own Expectations
7:34 Aptiv Posts Mixed Results
8:04 Autonation Sales Up but Profits Down
8:34 Penske Auto Sales Drop
9:01 Carvana’s Q2 Fantastic
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CHINESE EV SALES RECOVER IN EUROPE
Europe slapped import tariffs on Chinese EVs to try and slow them down, but Chinese EV market share is nearly back to its pre-tariff levels. It reached a record 11.1% in June of last year but that soon tumbled after the EU imposed tariffs as high as 35% on Chinese made EVs. Yet, this June, their market share recovered to 10.6% according to Dataforce. Overall, Chinese brands registered just under 22,000 EVs in June, up 14% from a year ago. Not surprisingly, BYD is the top Chinese brand, with over 9,100 registrations in June. MG followed with 6,600 but then it’s a big drop to XPeng in third, which registered 1,700 EVs.
COMMERCIAL VEHICLE SALES TUMBLE IN EUROPE
Uh-oh, is this a sign Europe’s economy could be in trouble? Sales of commercial vehicles tumbled in the first half of the year. According to the European Automobile Manufacturers Association or ACEA, commercial van sales were down 13% and medium and heavy-duty trucks dropped about 15%. But there was one bright spot. Bus sales were up 4%. And while ICE was down, commercial BEV and PHEV sales were up strong. Electric vans were up 47%, electric trucks increased by 48% and EV buses were up 38%.
COMMERCIAL EV SALES SOAR IN U.S.
In the U.S., commercial EV sales are going strong. According to S&P Global Mobility, electric Class 3-8 vehicles soared 274% to just under 25,000 units for a one year period that ended at the end of May. Class 2 EVs also saw a big gain, up 69% to more than 417,000 units. Meanwhile, passenger EV registrations totaled more than 694,000 units, down 2% over the same time period.
EXXON & CHEVRON INCREASE OIL PRODUCTION
Oil production is on the rise. Exxon’s global oil and natural gas output reached the equivalent of 4.6 million barrels a day, which is more oil than it has produced in any second quarter since it acquired Mobil 25 years ago. And Chevron’s production in the second quarter was up 3% to an all-time high of 3.4 million barrels a day. That increase helped the oil giants beat estimates from Wall Street analysts, who expected lower earnings due to slumping oil prices.
STELLANTIS NAMES NEW HEAD OF NORTH AMERICAN DESIGN
Stellantis is shaking up its design department under new CEO Antonio Filosa. The company previously had two chief designers, one in North America and another in Europe. But now it will have one Chief Design Officer, a role given to Ralph Gilles, and then regional design heads who operate under Gilles. Last week it announced that Gilles Vidal will head up regional design in Europe and it just revealed that Scott Krugger will be in charge of Chrysler, Dodge, Jeep and Ram in North America. Krugger has been with the company for 24 years and most recently managed all exterior design for Dodge and SRT. Both regional designers will work closely with Ralph Gilles, but they report directly to the Chief Operating Officer of their respective regions. And we’ll note that Antonio Filosa is also the COO of North America.
CATL BOOSTS EV BATTERY EXPORTS
While a number of battery makers have been making headlines recently, CATL actually grew its global share of EV batteries slightly through the first five months of the year. It now controls just over 38% of that market, an increase of just over half a percent. So, it’s not surprising that CATL also reported an increase in its battery shipments in its first half results. It shipped a little over 150 GWh of batteries through June, an increase of about 9.5%. That helped the company generate just over $25 billion of revenue, up over 7% and finish with a net profit of roughly $4.2 billion, an increase of about 33%. While EV batteries still make up over 70% of CATL’s total sales, it’s also expanded into other areas, like stationary storage and battery swapping.
HONDA INTRODUCES FUEL CELL STATIONARY STORAGE
Honda is getting into stationary storage devices as well, but instead of batteries, it’s using fuel cells. However, these aren’t units that attach to the side of your garage, they’re quite big and are capable of powering entire buildings. In a new demonstration project, Honda installed one of these fuel cell storage units in Japan to supply electricity to a data center operated by a division of Mitsubishi. What makes this project a little unique is that Honda will get its hydrogen from a nearby salt water electrolysis plant, where hydrogen is a natural by-product. Each unit is capable of generating up to 250 kW of power. Up to four units can be connected in series for a total output of 1000 kW and then multiple sets of those four units could be hooked up in parallel for even more power. So, they even be used when the power goes out or as an off-grid solution.
For the last week, we’ve been reporting on the second quarter earnings of automakers, and without exception every one of them reported lower profits. And pretty much all of them blame the tariffs. But how are other parts of the industry doing, like automotive suppliers and dealers? Let’s take a look at three suppliers, BorgWarner, Magna and Aptiv who just reported their earnings.
BORGWARNER EXPECTS BETTER SECOND HALF
BorgWarner’s revenue was about the same as last year, but its net income dropped 26%. It expects the second half to be better based on new orders for more turbochargers and hybrid technology from automakers in the Americas and Europe. While in China it expects more orders of inverters, electric motors and EV differentials. Investors liked what they heard and the stock was up almost 2%.
MAGNA BEATS OWN EXPECTATIONS
Magna saw its revenue fall 3% because it phased out assembly of the Jaguar E-Pace and I-Pace at its Steyr assembly plant in Austria. But its net profit shot up 21%, exceeding the company’s own expectations. Profits rose thanks to higher productivity, but also because the U.S. dollar weakened, and as Magna converted sales that were conducted in foreign currency back into dollars, it ended up with more dollars. Even so, its stock dropped 2.7% this week.
APTIV POSTS MIXED RESULTS
Aptiv, saw its sales rise 3%, though if you take out the effects of the weaker dollar it was really up 2%. While it posted record operating profits, Aptiv’s net profit fell 58%. And it warns that the 3rd quarter will be slightly worse due to the U.S. tariffs. Its stock dropped over 5% on the news.
So it’s kind of a mixed bag for suppliers, or at least these suppliers. Now let’s take a look at the retailers.
AUTONATION SALES UP BUT PROFITS DOWN
Autonation sold over 65,000 vehicles in the second quarter, up nearly 8% from last year. Its revenues also rose 8% to almost $7 billion. But its operating and net profits both fell dramatically, due to several charges it had to take. Even though those were non-cash charges, and the underlying business is healthy, investors didn’t like the numbers and the stock is down 6% this week.
PENSKE AUTO SALES DROP
Penske Automotive sold over 112,600 vehicles, but that was down 11%, mainly because of a drop in the UK, but U.S. sales were down as well. Revenue was flat at $7.6 billion, but both operating profit and net income were up 4%. Even so, investors didn’t like the numbers and the stock is down more than 4% this week.
CARVANA’S Q2 FANTASTIC
Meanwhile, Carvana, which only sells used cars using a direct sales model, had a fantastic quarter. It sold over 143,000 vehicles, up 41%. Revenue hit $4.8 billion, up 42%. Its operating profit hit $511 million, up 97%. And its net profit shot up 5-times to $308 million. Investors loved the news and the stock shot up 42% this week.
So what can we read into all these numbers? With the exception of Carvana and BorgWarner, investors pretty much gave the thumbs down to suppliers and retailers.
But that’s a wrap for this show. Thanks for tuning in and I hope that you have a great weekend.
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I know this is a couple days late and not covered in today’s report, but regarding Mercedes price cuts and stop sell of EVs in the US. IMHO, the biggest problem with Mercedes EQ Series, was their exterior styling and the perceived interior quality. Had the EQS came to market with exact styling of the original concept, or was closer to that of the S-Class, or even the CLS-Class, which it appears to have a closer footprint to, I don’t believe there would have been as much push back. Personally, while disappointed that it didn’t have the concept’s look, it does look much better in person than in print. Had Mercedes been willing to sacrifice a few coefficient of drag and not put making the EQ-Series the most aerodynamic BEVs on the market, perhaps their final appears might not have been as jarring for potential customers. What’s interesting, it is as much a success as many consider it a failure (the EQS that is)! As many have attempted to follow Tesla’s lead, the EQS has stuck closest to its claimed MPGe and maintained one of the longest vehicle ranges, in both government estimates and third party tests and real world driving! So the platform with it’s EV hard and software were, for the most part, were sound, but their styling and execution fell flat! With them changing course and using the CLA as their template for the next generation of vehicles, both EV and ICE, hopefully they will have move success on all fronts.
The EQs were also pricey compared to most competitors, but seeing their awful residuals, that is not a major reason for their low sales, at least initially.
The OEMs are certainly in a tough spot, and not one of their own making. They are being told to spend huge amounts of money to move operations into the US that are currently in financially advantageous locations. So they have to spend a ton of money that they shouldn’t need to and divert that money from other more productive uses. Then they have to raise prices or absorb tariff hits, or both. That is decreasing sales volume and profits. It’s a double whammy to a low-margin industry that already had a lot of competition and adversity. If that is winning, I can see why they would be tired of it.
the OEMS lostthe big billions (in Ford’s case 5 billions every year) from the pressure to go EV. The god damned fools in Government should have not interfered with markets, and let the Almighty Consumer decide what he wants to buy.
Regulus, thank you for saying what I was about to say!
Thanks, Gary, and when I wrote “Government” I purposefully did not limit it to the Feds, the CA Government in particular played a disastrous role in this.
Yeah, and CA played a disastrous role in requiring PCV on car engines.
We Californian’s still like to breathe. The 1960s smog was oppressive. Today we can even see our mountains which were invisible back then
I was never in southern California in the ’60s, but I’ve seen photos, and it was awful. Even something as simple as PCV, used in CA starting in 1961, made a difference, and it wasn’t used nationally until two years later. California has forced various efforts over the years, with car companies and other polluters kicking and screaming, but things that “couldn’t be done” got done, with the prodding of CA government.
As far as EV mandates and incentives, there have been positives and negatives, but they have helped “jump start” the business, not a bad thing. It will be decades, but at some point, EVs will largely replace ICE vehicles. To me, the thing missing from the incentives is subsidizing “home” charging at apartment and condo complexes. EVs would be ideal for a majority of the people at my Florida condo complex, if charging at utility rates was available there. I’m one of few “older” people there who ever take road trips longer than 50 or 100 miles from home.
Regulus/Gary —
You say the government should not have “interfered with markets, and let” consumers decide what they want to buy, but aren’t they doing that now, too?! The government then as now never held a weapon to anyone’s head, customer or OEM, telling them what to buy or what to make. They did offer incentives to build and buy EVs, with and eventual move to electrification, which was more a movable goal post then a fixed position! Now, the current US administration is doing the same in reverse, so hold the previous admin to the fire fire, for the direction they were going in and do the same to the current, is to be less then honest.
“ The government then as now never held a weapon to anyone’s head”. This is a disengenuous statement considering that CARB absolutely ordered automakers to stop selling ICE vehicles in their state by an unattainable date or face debilitating fines. That removes choice from both the supplier and consumer. And it has cost each of the big three billions in losses on cars that people just don’t want to buy.
Speaking of cars no one wants to buy, has AD mentioned the head of Jaguar finally getting shown the door this week after his ridiculous woke androgynous rebrand campaign basically destroyed any prospects of a revival of the company? Another big win for common sense. Will be interesting see if they still try to market that giant pink Lego brick EV or go back to the English gentleman ethos that made the brand.
Thanks, Daily Driver, for setting the record straight for the rabid lefties who still have no clue.
CA was especially hurtful to the automakers, because it is a huge state with very high auto sales. If an automaker is allowed to sell in the CA market, it has to obey and kiss the odious posteriors of the extreme radical lefties in the CA government.
Do not forget, silly lefties, that in San Francisco, you can steal up to $999 from any store and never have to face ANY punishment.
These are the nutjobs that twisted the arms of the automakers and forced them to build their car to THEIR standards.
Rabid lefties like Kit, who cannot afford an EV because he cannot charge it at home, if they lived in CA, and senile idiots like Biden were POTUS and did nothing about it, Kit would be punished severely EVEN if he owned a plug-in hybrid electric vehicle, as ONLY PURE BEVS would be allowed there in a few years time. Thank god for the COMMON SENSE Trump Admin who ruined those silly plans of the rabid left.
But, Kit and WMB or whatever your initials are, keep to the extreme left like you do now, and you will ensure conservatives ruling every branch of fed and state gov in the future. The deep state, of course, will be alive for many decades, the worthless overpaid Govt Employees who made states like MD and Northern VA and DW prosperous on our Tax $, which pay their undeserved salaries.
It’s interesting that Regulus, who claims to be a scholar at a top tier university, is so enthralled with a lunatic having major goals of destroying American universities, destroying public health agencies, destroying environmental protection efforts, and crashing the global economy.
By the way, Regulus, I could easily afford to buy an EV and use public charging, but it would be VERY INCONVENIENT. For my local driving, I can go 500 miles with one 5 minute gas stop. With an EV using public charging, I would need two 30 minute stops at places I wouldn’t otherwise go to get 500 miles of charge.
BTW, it is the deep red states like OK, MS, AL, and WV that are “parasite” states receiving far more federal money than they contribute. The non-red states that receive more, like VA MD, and HI, have a lot of military installations, which accounts for a significant amount of the federal money they receive.
Regulus/Daily Driver —
The government, then as now, has Never held a weapon to anyone’s head to either buy or build EVs! They Only offered incentives toward the purchase and manufacture. How do I know, you ask? While they were offering these these incentives, in purchased two ICE vehicles! They date to do only build EVs, as was said, was more movable goal post, for, as Regulus and others have said, the ‘market’ and buyers were not supporting such aggressive timelines! Western lawmakers were in the process of pushing back those time lines, as mentioned here on ALD! On that of that, if I’m not mistaken, automakers are STILL making more OCE vehicles then the are BEVs, so where is the weapon to buy or build EVs??? Customs and OEMs STILL have the ability to to do what THEY want! While the current US administration wants to encourage more ICE with their policies, why does it have to be one or the other?! Both create jobs, so why can’t the MARKET truly to the deciding factor?!
Explain why that Jaguar’s CEO stepping down have anything to do with woke?! CEOs step down and get fired all the time! Jaguar’s troubles good back t0 or more years and their management has played musical chairs, for quite sometime. Some managements and directions at the company have been more successful then others, so what does this have to do with being ‘woke’? Is it because of the new direction of the company and their latest concept, that you’re saying they are woke? CEOs and management make bad decisions all the time! Are the challenges at Nissan, because of being woke or bad managerial decisions?! Is the 00 Type concept an example of being or just another big decision? Remember the original Bentayga concept??? A very, very bad decision, but, remember, it was JUST a concept, like the 00 Type! We still don’t know what the final vehicle will look like. Yet, its success or failure will have nothing to do with how “woke” the company is or was, whatever that even mean!
I don’t think the Jaguar CEO stepped down because he was “woke”. He may be that, but the real reason is that he wasn’t any good. At the end of the day the CEO must produce results. Every business is a results based business. That is because if you don’t achieve results, money ceases to flow into your company and the company ceases to exist. If the CEO was “woke” and producing results, he would still be there. If the CEO was an absolute jerk but producing results, he would still be there. Only in government and academia can your results be poor to mediocre while still retaining your job.
Everyone saw the nutso Jaguar ad that has destroyed their sales and the ensuing world wide mockery of the attempted rebranding. Why are you guys pretending that didn’t happen? You do t even mention it. CEOs do change but in this case, it is very clear why. Even the articles about his ouster said this was why.