AD #4187 – Tesla the #1 AI Chip Supplier?; VW Cuts Some Costs in China 50%; Merger Creates World’s Largest Paint Supplier

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

TESLA AS #1 AI CHIP SUPPLIER?
Elon Musk has trained us to be highly skeptical of his timelines for new technology, but if he pulls this one off he’ll be on his way towards collecting that trillion dollar pay package. Musk says Tesla is nearly done with the design of its next AI chip, called AI5, and already started early work on the next generation AI6 chip. He says Tesla will bring out a new AI chip every 12 months and that ultimately it will make more AI chips than everyone else put together. The chips will actually be manufactured at a Samsung Electronics plant in Texas, but if Musk can achieve that, he has a good shot at growing Tesla’s market cap.

ANOTHER SOFTWARE EXEC QUITS GM
General Motors is losing another software exec. The company’s Chief Artificial Intelligence Officer, Barak Turovsky, announced he’s leaving GM, after just eight months on the job, even though that role was specifically created for him. A GM spokesperson said Turovsky’s departure is part of a strategic plan to integrate its AI capabilities into business and product organizations, rather than being standalone. But this is another hit to GM’s software team. Last month, Dave Richardson, the company’s VP of Software, also left the company. GM’s software development is now mostly led by Chief Product Officer, Sterling Anderson, a former Tesla executive who joined GM in June. While we don’t know why these execs are leaving, here’s one thing we’ve observed. When an outsider abruptly leaves an automaker after a brief stint it’s usually because they got tired of all the bureaucracy, or the bureaucracy got tired of them.

EV SALES UP SHARPLY IN EUROPE
We’ve got the latest new car sales numbers from Europe and there are some interesting developments. EV sales shot up almost 33% in October. Keep in mind we’re quoting sales for all of Europe, not just the EU. EV market share topped 20% versus 16% a year ago, which is a significant jump. Total light vehicles sales hit 1 million units, up almost 5% from last year. The Volkswagen Group had a strong month, and so did Stellantis and Renault. But Toyota fell 10% and the Hyundai Group was only up a fraction of a percent. We mention them because those five automakers account for about 70% of the market. And here are two important developments. So far this year, Hyundai and Kia are outselling Toyota and Lexus. There’s one milestone for you. And it’s stunning to see how far Mercedes has dropped behind BMW. Even if you strip out sales of Mini, Mercedes is disappearing in BMW’s dust.

European Car Sales Oct, 2025
VW Group	264,069	+7.9%
Stellantis	139,709	+6.6%
Renault	103,408	+10%
Toyota	65,616	-10%
Hyundai-Kia	65,598	+0.1%

JAN-OCT 2025 Sales
BMW w/ MINI	626,800
Mercedes	460,600

RUSSIAN CAR MARKET FACES DISASTER
The Russian car market is going from bad to worse. High interest rates have pushed up the price of new vehicles, now averaging more than $42,000. As a result, sales are plunging. Through October, automakers have sold just over 1 million vehicles, down almost 20% compared to a year ago. And they’re expected to drop even more next year because Russia is raising fees on new vehicles so they’re not eroded by inflation. Remember, before it invaded Ukraine, Russia’s car market was on track to sell 4 million cars.

     

EVs CATCHING ON IN INDIA
Electric vehicles are starting to catch on in India. EVs now account for 5% of new car sales, up from 2.5% last year. Bloomberg estimates that EV sales will reach at least 650,000 units by 2030. And Tata Motors, which is the leader in EV sales in India, expects EVs to account for a third of its sales by 2030.

BMW CONSIDERS EREVs
More and more automakers are adding EREVs or extended range electric vehicles to their lineup and BMW could be the next. Bloomberg reports that the company is considering the technology for its top-end models like the X5 and 7 Series. BMW already makes some of the components in-house, which would reduce the cost to introduce the technology. But no decision has been made yet.

  

VW CUTS PD COSTS 50% IN CHINA
Volkswagen’s strategy to make vehicles “in China, for China” is really paying off. We recently highlighted how both VW and Audi have started to claw back sales, but the Group is also benefiting from things like a new multi-billion dollar innovation center in the country where it’s able to run software, hardware, and full-vehicle validation processes at the same time. That has helped it slash its vehicle development cycle from about 50 months down to roughly 35 months. And when combined with lower labor rates and better supply chain efficiencies, like access to batteries, Volkswagen has cut its EV development costs for some models in half, compared to what it would have cost the company to make an EV in Germany in 2023. That’s why it’s going to increase exports of these new Chinese-made vehicles to markets like Central and Southeast Asia, including Chinese-made ICEs to the Middle East. So far VW says it will not export to Europe, but we wonder what kind of impact this could have on the company’s European production volume?

ZEEKR’S ADAS CROWD-SOURCING CAMPAIGN
I think it would be smart for Tesla to take a page out of Zeekr’s book. The Chinese automaker is launching a crowd-funding campaign to upgrade the older driver assistance systems in two of its models. It’s looking for 3,000 owners of its 001 model and 1,500 owners of the 009 to agree to the upgrades, which would cost about $2,000 – $3,000, but that includes new bumpers, windshield, sensors and wiring. Zeekr claims the hardware alone is worth just over $4,000 and then it still takes about 20 hours to install, which looks like you pretty much have to remove the entire interior. The vehicles currently have a Mobileye-based ADAS system, but would upgrade to an in-house developed system that uses NVIDIA tech and has nearly 15-times the computing power.

MERGER CREATES WORLD’S LARGEST AUTO PAINT SUPPLIER
Big news in the world of automotive paint. AkzoNobel and Axalta are merging to become the world’s largest coatings supplier. AkzoNobel is based in the Netherlands, while Axalta is based in Philadelphia and used to be part of DuPont. There doesn’t seem to be a new name for the merger, but AkzoNobel does have a 55% controlling interest. The new company will generate $17 billion a year in revenue, with EBITDA profit margins of 20% and free cash flow of $1.5 billion a year, which are very attractive financial numbers.

And a head’s up for all our viewers out there. There will be an all-new Autoline Daily tomorrow, but we’re taking Thursday and Friday off for the Thanksgiving Holiday. And also here’s a reminder for all our Youtube and Patreon members. John and I will be going live to answer your questions at 2:30 pm eastern time today. We’re already getting questions from you, so send yours in if you haven’t already, or even send them in during the live show. It’s just another way for us to show you our appreciation for your support.

And with that we wrap up today’s report. Thanks for watching Autoline Daily.