AD #4201 – 16 States Sue Trump Over EV Chargers; Castrol Develops Lower Carbon Engine Oil; Scout Gets Deal to Sell Direct in Colorado

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

16 STATES SUE TRUMP OVER EV CHARGERS
The EV sector is going through crazy times as some companies slam on the brakes and others put the pedal to the metal. This won’t bring any relief: The Trump Administration is once again trying to block the funding for EV chargers. It just suspended two grant programs, which were created by Congress as part of the $1 trillion infrastructure bill in 2022. So, now the Administration is being sued by 16 states and the District of Columbia for withholding those funds. This isn’t the first time the Administration has done this. Earlier this year, it stopped funding a separate $5 billion EV charging program, but in June, a judge ordered the Administration to stop withholding that money. However, we think this latest dispute could end up in the Supreme Court because many believe that the Administration doesn’t have the authority to stop funding programs that have already been approved by Congress.

FORD CANCELS $6.5 BILLION LG BATTERY DEAL
LG Energy Solutions woke up this morning to discover that Ford cancelled a $6.5 billion contract they had to make EV batteries. It’s unclear if this is part of the $19.5 billion EV write-off that Ford just announced. But this is a massive hit to LG Energy, which last year had $18.6 billion in revenue. 

VW EV BATTERY COMPANY SEARCHING FOR INVESTORS
Volkswagen’s EV battery company, called PowerCo, is scrambling to find outside investors. Volkswagen is losing money and it reportedly cut PowerCo’s budget by €5 billion over the last couple of years. VW is also considering finding a partner or doing an IPO. The original plan was to have PowerCo build 6 battery plants in Europe, with 240 gigawatt hours of capacity. But EV sales in Europe are well below where automakers thought they would be, so those plans are getting scaled back.

TESLA TO BUILD BATTERY CELLS IN GERMANY
But Tesla forgot to read the script of how things are supposed to go. It’s going to start making 8 gigawatt hours of battery cells in Germany in 2027, which could supply 130,000 cars at its plant in Berlin. For now, those cells are imported from the U.S. By the way, Tesla stock is at an all-time high and is outperforming all the other tech companies popularly known as the Magnificent Seven. 

MARUTI-SUZUKI BULLISH ON EVS IN INDIA
Meanwhile, half a world away in India, Maruti Suzuki is extremely bullish on the EV it’s going to launch. It’s the eVitara, a subcompact crossover, which is already sold in the UK, starting at $35,000. To make sure the infrastructure is ready in India, Maruti is installing 2,000 chargers on its own and teamed up with another provider that has 12,000 chargers. It’s also building 1,500 EV service centers in 1,000 cities. This is another example of EVs doing far better than expected in developing countries.

 

SCOUT GETS DEAL TO SELL DIRECT IN COLORADO
As we’ve reported, Scout Motors is facing pushback in the U.S. for wanting to sell vehicles directly to consumers. Car dealers are dead set against the plan and argue that Scout must sell through franchised dealers, since it’s part of the Volkswagen Group. However, VW and Scout say Scout is independent. Car dealers in California and Florida have already sued Scout to stop it from selling direct. But it was just granted a dealer license in Colorado, which will allow direct sales. Dealers are considering appealing but this is an important win for Scout.

UK KEEPS 2035 ICE BAN, FOR NOW
Automakers scored a big victory yesterday with the EU scrapping its 2035 ban on new combustion engine cars. And now the industry is turning its focus to the UK. Since the UK is no longer part of the EU, it has its own emission mandate. The country plans to ban sales of new gas- and diesel-powered cars in 2030, while hybrids are allowed until 2035. But now that the EU has rolled back its emission goals, the UK is being pushed to do the same. The industry is concerned with having two different sets of regulations, particularly because three-quarters of British vehicle production is exported and half of that goes to the EU. And automakers do have support. While the UK has a higher EV market share than the EU, 22% vs 16%, a new survey from YouGov found that nearly 60% of British citizens oppose banning sales of new ICE cars in 2030.

NISSAN STARTS LEAF PRODUCTION IN UK
And in related news, Nissan has kicked off production of the new Leaf at its Sunderland plant in the UK. Next year the plant will also start building the Juke EV.

CASTROL DEVELOPS LOWER CARBON ENGINE OIL
Oil maker Castrol figured out a way to re-refine old engine oil so it can be used again and Renault says it will be the first automaker to offer this oil for all its vehicles. Castrol’s GTX line now features what is called Re-Refined Base Oils, which meet a standard that is the same as brand new oil. But another benefit is that it also has an estimated 13-24% lower carbon footprint reduction. Now sold across its European dealer network, Renault says there’s enough versions of the oil to cover over 50% of its vehicles and that Castrol is coming out with additional two next year that will cover its entire lineup. 

WAGENER OUT AT MERCEDES, BAUDY IS NEW HEAD OF DESIGN
It wasn’t long ago that Mercedes’ Head of Design, Gorden Wagener, said that screens weren’t luxury. And yet, all of Mercedes’ brand-new models since that time have big ol’ screens on the dash. We have absolutely no idea if it’s coincidence, but Wagener is leaving the company after a 28-year career “at his own request and by best mutual agreement.” Bastian Baudy, currently in charge of design at AMG, will take over as Head of Design. 

60,000 SUPPLIER JOBS AXED THIS YEAR
Times sure are tough for most automotive suppliers. Automotive News reports that suppliers in Europe and the U.S. have eliminated 60,000 jobs this year. There’s a host of reasons: slow car sales, tariffs, inflation, and automakers retreating from EVs. But whatever the reason, 60,000 is a lot. Of course, some suppliers are easily outperforming their peers. For example, Lear has seen its stock shoot up 24% this year. Magna is up 28%. BorgWarner is up 42%. But they’re clearly the exceptions and most suppliers are reeling from the turmoil in the industry. 

And that brings us to the end of today’s show. Thanks for tuning in.