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Runtime: 10:09
0:00 Oil to Drop Under $50/Barrel
1:10 Auto Components Hit with More Trump Tariffs
2:04 USMCA Compliance Soars for Auto Components
2:49 California Considers Paying $7,500 EV Credit
3:47 Chinese Buick Electra L7 Bristles with Tech
5:00 Opel Concept Is Cool Hot Hatch
5:47 VinFast Kills Direct Sales, Goes Dealer Route
6:47 China Media Disses 3-Row Model Y
7:19 Amazon Now Selling Used Cars
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
OIL TO DROP UNDER $50/BARREL
Have you been watching the price of oil? A year ago, it was $81 a barrel. Today it’s $67. And at this time next year it could be $50 a barrel, maybe even less. That’s according to the latest forecast from the U.S. Energy Information Administration. That $67 a barrel is the WTI or West Texas Intermediate price, which is the U.S. price. The international price, which they call Brent Crude, is a few dollars a barrel more, but it’s also dropping. The EIA says that oil producers around the world, especially OPEC, are making too much oil, far exceeding demand, and that’s driving down prices. We would add that a slowing global economy is causing demand to fall as well. And yet, even though oil prices are dropping, the EIA expects the price of natural gas to double from 2024 to 2026.
AUTO COMPONENTS HIT WITH MORE TRUMP TARIFFS
Just when automakers and suppliers in the U.S. thought they were starting to get their arms around their tariff challenges, the Trump Administration dumped another load of tariffs in their laps. The Administration is slapping 50% tariffs on the aluminum and steel that is used in imported components like mufflers, exhaust pipes, clutches, busses, vans, semi-trailers and any passenger vehicle with more than 1,000 cc engines. And it’s a double whammy too because these tariffs stack. You pay 50% tariffs on the steel and aluminum content in those products, and then you pay a tariff for importing the product itself. Reuters reports that Tesla asked for an exemption for the steel it uses in its electric motors, saying nobody in the U.S. makes that grade of steel. But that request was rejected.
USMCA COMPLIANCE SOARS FOR AUTO COMPONENTS
Yet, there is some good news in the tariff area. More and more automotive components imported from Canada and Mexico are USMCA compliant. Fitch Ratings reports that in May, about 56% of components from Canada were USMCA compliant. Now it’s 81%. In Mexico, it was 42% compliant in May, while now it’s 77%. This is a big deal because any components that are USMCA compliant pays zero tariffs. And that’s also a mighty fast turnaround. It shows just how resourceful automakers and suppliers can be when their backs are pressed against the wall. In this case, the tariff wall.
CALIFORNIA CONSIDERS PAYING $7,500 EV CREDIT
California is fighting back against the Trump Administration’s anti-EV policies. The California Air Resources Board wants the state to pay for the $7,500 tax credit for new EVs and $4,000 for used ones when federal incentives are phased out in September. But it’s being realistic, too. It says the incentives would be “contingent upon available resources.” CARB says it’s also working on new Zero Emission Vehicle requirements just in case the courts uphold the revoking of the EPA waiver by the Trump Administration, which allowed California to set its own emission standards.
CHINESE BUICK ELECTRA L7 BRISTLES WITH TECH
Buick is upgrading the tech inside its cars for the Chinese market. The new Electra L7 sedan will be the first model to get Momenta’s newest driver assistance system, called R6 Flywheel, which they claim is the first reinforcement learning model implemented into a production vehicle in China. This type of system is supposed to provide more safety, convenience, and efficiency across a wider range of driving scenarios. The Electra L7 is also the first model to feature Qualcomm’s newest Snapdragon chip to run most of its interior features. It enables faster and crisper display screens and powers a large head-up display. Buick claims it’s a 50-inch HUD, but I’ll say that picture doesn’t do it justice. You may recall the Electra L7 is the first model to be built on a next-gen 900-volt architecture that’s tailored to the Chinese market and can support many body and powertrain types. The L7 is launching as a plug-in hybrid. But what we’ve seen so far has been so impressive, we’re starting to wonder how different this platform is from Ultium and if we’ll see it used for other models and other markets?
OPEL CONCEPT IS COOL HOT HATCH
Opel is taking the Corsa and turning it up to 11. The standard version of the small car puts out about 155 horsepower but the Corsa GSE Vision Gran Turismo concept generates an eye-watering 800 horsepower and will do 0-100 km/h in 2-seconds. Based on the STLA Small platform, it’s also lower and much wider than the standard Corsa. While the styling is pretty wild and the aero elements are pretty extreme, Opel says the concept gives a preview of upcoming GSE models, which is what the company calls its performance cars. And as its name implies, you’ll be able to drive the concept in the Gran Turismo 7 video game.
VINFAST KILLS DIRECT SALES, GOES DEALER ROUTE
As we reported last week, EV startup VinFast is pivoting away from the U.S. and Europe, and focusing on Southeast Asia, the Middle East and Africa. But the company isn’t completely giving up on the U.S. market and is shaking up its sales strategy. VinFast just opened its first franchised dealership in California and is no longer offering a direct-sales model in the state. VinFast started opening franchised dealers in the U.S. in late 2023 but it decided to keep its 15 direct-sale showrooms in California. However, due to poor sales, VinFast has now closed those stores and is looking for dealer partners. VinFast currently has nearly 30 franchised dealers in 14 states. Hopefully, the change works for VinFast because according to S&P Global Mobility, it only registered 947 vehicles in the U.S. in the first half of the year, down 37% from a year ago.
CHINA MEDIA DISSES 3-ROW MY
Tesla is opening the Model Y to a broader range of the market by introducing a new 3-row, long-wheelbase version. But one media outlet in China says that the back row doesn’t offer much room or support for passengers. Leg and head room were cited as potential problem areas and the outlet estimates that anyone over 170 mm tall, which is about 5-feet 5-inches, could feel cramped. So, we’ll be interested to see what actual customers have to say about the Model Y L.
AMAZON NOW SELLING USED CARS
Amazon is expanding into used car sales. The retail giant partnered with Hyundai to sell used and certified pre-owned vehicles on its platform, which are made available through Hyundai’s dealerships. The service started at the beginning of the month and it’s currently only open to car buyers in Los Angeles. Amazon also partnered with Hertz to sell used vehicles from its rental fleet. It will initially begin in Dallas, Houston, Los Angeles and Seattle and will eventually expand to 45 locations nationwide. As you probably remember, Amazon started selling new Hyundai vehicles online at the end of last year, which allows customers to browse, finance and arrange for pickup from a participating dealer.
But that’s a wrap for this show. Thanks for tuning in.
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I submit that Vinfast’s poor US sales has little or nothing to do with its dealer/distribution policies, but is a direct result of its incredibly poor, widely publicized product quality. Word gets around!
Sean, I’d take that oil cost forecast with more than a grain of salt. At the moment, all US government data is somewhat suspect. In this case, since oil responds mostly to international events, just claiming you can predict the price is a reason to be skeptical. IF no new wars start, and existing wars ramp down, and economic activity stays low world-wide and suppliers continue to pump extra volume, then the price should decline and stay low. But, if low-cost oil imports start to impact drilling activity in the US negatively, the US government is likely to tax imports, raising the price again. Basically, if you look at the factors affecting price, political factors are now the big ones (war, tariffs, bans, pollution controls) not economic factors. (Note: if, by some miracle, industry does start returning to the US, that will raise consumption of oil and therefore price.) In the rest of the world, low carbon alternatives like natural gas are still increasingly preferred as the hydrocarbon of choice for uses where electricity cannot yet do the job. That could change too, but for now explains at least some of the price difference. Bottom line is that any current estimate is a wild ass guess at best, that could change overnight. Not a good indicator to base long term plans on.
You quoted a guess on oil prices next year from the EIA. THat’s all it is, a GUESS. I don’t even care to repeat the number.
You seem totally ignorant of the laws of forecasting. I repeat:
“Those who gaze in crystal balls eat broken glass”, if we really need their forecast. I explain further:
If tomorrow is like yesterday, your forecast will be accurate, but nobody will need it.
If tomorrow is very different than yesterday, which is really when the forecast is needed, your ‘forecast’ (ie, GUESS) will usually be dead wrong.
Really? The Chinese media complains that the third row of the Model 3 can only take people up to 5′ 5″ comfortably?
Do these MORONS know that over half the adult population of CHina (ie the WOMEN) are rarely taller than 5′ 5″ and many much shorter?
Even if this were not true, the two seats of the third row, in most crossovers, are FOR KIDS ONLY
BUT IS SURE AS HELL IS TRUE.
So, “Chinese Media” you SUCK, and so does your anti-Tesla BIAS.
test-I posted something about the EIA and it did not show.
I will not write it again. Instead, enjoy your Lincoln Town Car Camper For One Conversion:
https://carsandbids.com/auctions/927vq8w6/1997-lincoln-town-car-executive-series-hearse
Ron,
Agreed. The Vinfast car itself is the problem. A dealer network might help increase sales from the perspective of making people more comfortable with a set location to go to in case of trouble with the vehicle. Overall though they need a better vehicle to truly increase sales.
Regulus,
The best that can be gleaned from the China story is that they view the 3 row Tesla Model Y as a threat. Which is great news for Tesla as anything that state media deems a threat is generally going to do well in that market.
Both Canada and Mexico had (before Trump) very low duties into the US on most things. As a result, many companies didn’t bother with the extra paperwork to export under the free trade agreement. With Trump putting tariffs on, companies are busy doing the paperwork to export under USMCA. Hence the increase in duty free shipments.
@Autoline TV team on height of Chinese: 170 centimeters, please, not 170 millimeters. The latter would be less than half the height of a newborn baby.
If oil prices are going down, why are gas prices staying the same where I am in central Indiana? Not that it matters much to me. I spend more in a restaurant every few days than I spend on gas in a month.
As others have said, all news is that the Vinfast vehicles are unreliable POSs. With all of the competition out there, why would anyone buy them in the US or Europe? If they can prove themselves in their home market, maybe they will be ready for the US and Euro markets. For now, they should probably just check out of those markets. The direct vs dealership strategy is not the issue.
Yes, it always seems like gasoline prices go up fast when crude oil prices increase but drop slowly when crude oil prices drop.
The Chinese Buick Electra L7 looks nice and if built in other markets with that styling, I can see it being a success.
Regarding the Jaguar report from the other day, while dealers may be jumping ship, I wonder how many are dong so, not just because of the change in direction, but the cost of investment needed to service the vehicles, should they need to? While an EV may need, potentially, less maintenance with them having fewer parts, having to install charging ports, diagnostic and the other unique equipment and the personnel to run them, to investigate any software problems, on such a low volume product may not have been worth the investment some!
Regarding the styling of the Jaguar concept, while it has a number of highs and a few lows, it’s hard to see the famous curvaceous Jaguar styling motif, lean heavy into the heavy stoic, upright look of Rolls Royce. I always thought that the XE was the next generation away and XF the next mid cycle refresh away from true greatness. While their move upmarket, IMHO, feels like the wrong direction, stepping back, they may have a point?!
In Jaguar’s more modern age, Jaguar have always done well with the XJ and its various iterations (meaning the JL, R, Super, Portfolio and Daimler), which had sold from $100K to as high as nearly$200K, if memory serves. And before Ford purchased the company and turned it into a much more mass market operation, they only produced the midsize/fullsize-ish XJ sedan and E-Type/XK coupe/cabriolet. To some, those Jaguar’s had the Heritage to compete with the offerings of the German Three and at auction, some buyers were willing to big dollars on even older versions! This move up market may have some traction and while we may question that decision, Tata has has definitely demonstrated their willingness to pump billions into the brand and sit back and let the individuals they put in place to run the company do just that! But I can’t imagine they will let that go on much longer and continue to eat those costs1
Can dealers drop Jaguar without dropping Land Rover? The only dealers I know of with either brand have both.
As far as Jaguar, it seems that they lost their way years ago. Jaguar was always a car company and Land Rover a jeep company during the British Leyland and Ford days. Then, they decided to make all of these Jaguar SUVs to compete with Land Rover. Why not just make a Jaguar XJ sedan and a G-Type coupe/convertible, gas or hybrid for now, and let Land Rover be the off-road/soft road lifted wagon division like it always was?