AD #4226 – Tesla Mass Produces Dry Electrodes to Slash Costs By $1 Billion; Analyst Predicts Chinese OEMs Will Launch U.S. Joint Ventures In 2026; Ford Talks with Geely To Fill Excess Factory Capacity in Spain

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

FORD TALKS WITH GEELY TO FILL EXCESS FACTORY CAPACITY IN SPAIN
Two days ago, the Financial Times reported that Ford was talking with BYD and Xiaomi to make EVs in the U.S. Ford and Xiaomi denied the reports, but now we’re hearing that Ford is talking with Geely to use at least one of its European assembly plants. And Ford could get access to Geely’s technology, like hands free driving, which would presumably be cheaper than Blue Cruise. Ford’s sales in Europe are down dramatically and it has plenty of open capacity. Geely could make cars at Ford’s Valencia assembly plant in Spain, which currently makes the Kuga, also known as the Escape in the North American market. Sales of the Kuga have dropped under 100,000 units a year, while the Valencia plant is tooled to make 400,000. A basic rule of thumb in the industry is that a plant has to operate at 80% capacity to break even, which is 320,000 units for Valencia. Whether it does a deal with Geely or not, Ford needs to figure out a way to boost the capacity utilization of its European plants.    

NADA CEO MIKE STANTON CALLS CHINESE CAR IMPORTS “BAD FOR CONSUMERS”
Meanwhile, at the NADA convention in Las Vegas this week, the National Auto Dealers Association came out in favor of blocking Chinese cars from being sold in the U.S. market. Mike Stanton, the CEO of the NADA, said allowing them in is “bad for the industry, it’s bad for the country and it’s bad for consumers.” 

ANALYST PREDICTS CHINESE OEMs WILL LAUNCH U.S. JOINT VENTURES IN 2026
But another speaker at the NADA conference, Steve Greenfield, a partner at the venture capital firm Automotive Ventures, predicted that Chinese automakers will come to the U.S. this year. He said Chinese companies would form joint ventures with American automakers to make cars in U.S. plants, with U.S. workers, and sold through U.S. dealers using U.S. finance companies. 

TESLA MASS PRODUCES DRY ELECTRODES TO SLASH COSTS BY $1 BILLION
Tesla and its supplier partners have scored a major battery achievement, according to Elon Musk. He says they’ve been able to make the dry electrode process work at scale, calling it a major breakthrough in lithium battery production technology. Instead of applying the cathode material with liquid solvents, which requires massive drying ovens, it’s applied in a powder form. The process can slash factory space by up to 90%, increase output and significantly cut energy costs, which the company previously estimated could save it $1 billion. Tesla said some versions of the Cybertruck were supposed to get the batteries sometime last year, but now that it can mass produce them, they should spread to other models. And previous reports indicated that the Robotaxi and/or Cybercab would feature these batteries, which could be crucial in Tesla’s ability to hit its goal of making 2 million Cybercabs a year. 

UBER’S MARGIN SQUEEZE: LOWER PROFITS TODAY, MORE ROBOTAXIS TOMORROW
Uber is forecasting its first-quarter profit will be weaker than expected. Even though it thinks its gross bookings in Q1 will be slightly higher than estimates, Uber says its profit will take a hit because of higher taxes and an increase in more affordable ride options. Uber also announced plans to expand its worldwide robotaxi services. It will launch in Hong Kong, Madrid, Zurich and Houston and is aiming to have the services in more than 10 markets globally by the end of the year. Uber has already partnered with Baidu, WeRide, Waymo and Lucid and also previously announced plans to launch robotaxis in the San Francisco Bay Area, Los Angeles, London and Munich in the coming years.

RENAULT TO BUILD EV MOTORS IN FRANCE USING CHINESE COMPONENTS
Renault is going to start making EV motors in Europe with Chinese parts in an effort to reduce costs. The automaker is building a new production line at one of its factories in France that is expected to be ready by early 2027 and will make up to 120,000 motors a year. They’re considered more entry-level motors and to help keep costs down will use components supplied by Shanghai e-drive. Renault already imports EV powertrains from Shanghai e-drive for the new Twingo, but reports don’t indicate which models the motors will be used in. The automaker previously had a partnership with French supplier Valeo to develop EV motors without any rare-earth materials, but it scrapped those plans back in November. 

      

$4 A DAY FOR A NEW CAR: CHINA’S 8-YEAR LOAN WAR BEGINS
With car sales slowing down in China and the government cracking down on price cuts, automakers are offering longer-term loans and financing plans to help lower costs for consumers. Tesla was the first automaker to start offering 7-year loans last month, which led to several competitors coming out with similar offers. And now Reuters reports that at least 10 car brands are offering 8-year low-interest financing plans. Dongfeng Nissan is offering an 8-year plan for its Sylphy model that costs less than $4 a day with no down payment. China previously restricted loans to five-years but last year it loosened the rules to help boost sales.

HONDA AND MYTHIC CO-DEVELOP ENERGY-EFFICIENT AI CHIPS FOR SDVs
Honda is partnering with a Texas-based startup, called Mythic, to develop a system-on-a-chip for its software-defined vehicles. Honda says the goal is to improve the computing performance and energy efficiency of AI, which will be used for features like automated driving. The partnership also includes the development of a neuromorphic system-on-a-chip. Neuromorphic technology mimics the human brain’s structure using chips to create energy-efficient, fast, and adaptive AI systems, which Honda says it will apply to next-generation intelligent technologies.

SINGING FISH AND GRIZZLY BEARS: JEEP’S “CRUEL” NEW CHEROKEE AD
Jeep is using somewhat gruesome humor to advertise the new Jeep Cherokee hybrid. It features a Billy Bass singing fish, beloved by a child, that gets mauled by a grizzly bear, then snatched away by an eagle. Olivier Francois, the global CMO for Stellantis said, “Is it cruel? Well maybe.” But he said so many Super Bowl ads are “too much super cute, so we decided to do something different.” Despite the Super Bowl reference, it will not run during the big game this weekend, where the ad rate for a 30-second spot is $8 million. By the way, the Cherokee hybrid gets a combined 37 mpg rating and is priced at $37,000.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.