AD #4248 – European Automakers Want More Emissions Relief; Rising Oil Prices Threaten Automaker Sales; Chrysler CEO Change Raises Questions About Brand Future

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

RISING OIL PRICES THREATEN AUTOMAKER SALES AND GUIDANCE
Two weeks ago, the price of a barrel of oil was $65. This morning it hit more than $85, so it’s climbing fast. And with the straits of Hormuz shut down because of the war in Iran, oil could go a lot higher. As we’ve been talking about here all week, when prices at the pump go up fast, new car buyers scramble to find more fuel-efficient models. Autoline After Hours co-host Gary Vasilash had a great stat yesterday that for every dollar a gallon of gas goes up, sales of fuel efficient vehicles goes up over 20% and sales of non-fuel efficient vehicles goes down nearly 29%. That would hurt sales of full size pickups and SUVs, which in turn could force automakers like GM, Ford and Stellantis to change their guidance for the year. And it’s not just the price of oil that’s going to impact automakers and suppliers. The price of aluminum is up nearly 23% from mid-February because the Middle East is an important source of the metal.

IRAN WAR RISKS CANCELING FORMULA 1 RACES
The war in Iran is even affecting the Formula One season which is kicking off this weekend in Australia. That’s because F1 includes races in Bahrain and Saudi Arabia in April, a race in Azerbaijan in September, and in Qatar and Abu Dhabi in November and December. All those countries have been hit by Iranian missiles and drones, so those races may not happen, unless this war gets wrapped up quick. Liberty Media, which owns the Formula One series, saw its stock drop 8% since the war began last Saturday, wiping out $1.9 billion of its market capitalization.  

  

CHINA ALLOCATES BILLIONS FOR NEW AUTO TRADE-IN PROGRAM
China is going to continue its cash-for-clunkers-like program. As part of the government’s new 5-year roadmap for industrial development it will allocate over $36 billion in ultra-long-term special bonds for trade-in programs, including for cars. It was going to be hard to replicate last year’s sales success with about 30 million passenger vehicles sold in China, which was up over 9% compared to 2024. But with programs like these in place, the country’s sales are expected to increase slightly this year. On top of special trade-in bonds, the government is also setting aside nearly $29 billion to put toward large-scale equipment upgrades, including modernizing production lines for automakers and suppliers. China’s aim is to remain globally competitive in key sectors of the market. 

EUROPEAN AUTOMAKERS SEEK MORE RELIEF FROM EMISSION RULES
Automakers in Europe are still lobbying for more emission relief. Last year, the EU scrapped its plan to require all new vehicles to be 100% zero-emission by 2035, instead 90% of vehicles must be zero-emission. But the remaining emissions have to be offset through the use of green steel and synthetic fuels. The EU also rolled back plans to fine automakers for not meeting targets by the end of 2025 and allowed companies to average emissions over a three-year period instead. Automakers heavily lobbied for those changes but now they say they need more relief. Mercedes-Benz CEO, Ola Kallenius, who’s also President of the ACEA, the lobbying group that represents Europe’s auto industry, says the compliance window for meeting CO2 targets should be extended from three to five years. And he also says the requirements for green steel and synthetic fuels aren’t realistic. Kallenius warns that if the new rules are implemented it could collapse the car market in Europe. He says the EU should increase the use of synthetic fuels for the 250 million vehicles currently on roads to reduce emissions.

FORD FEBRUARY SALES DROP AS MODEL LINEUP SHIFTS
Ford reported its U.S. sales for February. It sold just under 150,000 vehicles, down 5.5% from a year ago. But that’s mainly because it’s getting rid of the Ford Escape and Edge and the Lincoln Corsair. The Louisville plant that makes the Escape and Corsair is being retooled to make that brand new $30,000 electric pickup, and the Oakville plant in Canada that makes the Edge is being retooled to make heavy duty trucks. Even so, there are two numbers that are concerning. Sales of Ford’s F-Series pickups were down 16%, which is significant. And with the Escape and Corsair going away, its hybrid sales were down nearly 22%. 

      

CARVANA SHARES UP DESPITE YEAR TO DATE DECLINE
We created an index that looks at all the automotive-related stock prices from around the world and yesterday, the Stock of The Day was Carvana, the used car retail outlet. Yesterday it was up 4.7%, with shares hitting $331. Over the last year, that stock went on a tear, shooting up 77%. So far, this year it’s down 9%. But yesterday it did quite well.

CHRYSLER CEO CHANGE RAISES QUESTIONS ABOUT BRAND FUTURE
There’s a change in the top spot at Chrysler, which has us questioning the future of the brand. Chris Feuell, who was CEO of Chrysler and head of Alfa Romeo North America, is leaving the company for personal reasons. Effective immediately, she’s replaced by Matt McAlear, who will also retain his current role as CEO of Dodge. I interviewed Chris Feuell back in August and at that time she was excited about the future of Chrysler. She talked about a new Pacifica coming early this year with very different front-end styling, inspired by the Halcyon concept, and said it would have a new plug-in hybrid powertrain. But earlier this year Stellantis discontinued all its PHEVs. And now with Feuell abruptly leaving it also has us wondering about the future of the all-new crossover she said Chrysler was supposed to get in 2027, which is a D-segment vehicle based on the STLA Large platform with gas, hybrid and pure-electric powertrains. 

BYD UNVEILS ULTRA FAST FIVE MINUTE EV CHARGING
Yesterday, we reported about BYD’s new Blade battery, which offers fast-charging even in extreme cold. The company also revealed a new generation of its Flash charging stations to help support the new batteries. Each charger delivers a maximum output of 1,500-kW and operates at 1,000-V. That’s enough to charge a battery from 10 to 70% in just five minutes. BYD says it has already installed more than 4,000 of these stations in China and plans to have 20,000 by the end of the year. BYD also plans to launch the stations outside of China by the end of this year but it didn’t say how many it’s targeting to install.

U.S. EV CHARGING STATIONS EXPAND DESPITE SALES SLUMP
And speaking of EV charging stations, despite a drop in EV sales in the U.S., more and more public chargers are being built. Last year, charging networks added 11,300 fast-charging cords in the U.S., up nearly 50% from 2024. And charging companies like ChargePoint and EVGo are planning to expand their network this year. More of these chargers are needed because there are now 5.8 million EVs on U.S. roads and more drivers are starting to rely on public charging.

BRIDGESTONE MEASURES ENVIRONMENTAL IMPACT OF TIRES
A study from Yale University found that on a global basis, cars shed 6 million pounds of rubber every year. So, Bridgestone, a sponsor of Autoline, developed a new process to study the environmental impact of its tires. It calls the rubber particles that get worn off tires Tire and Road Wear Particles, or TRWP. Last year, Bridgestone showed off a method to collect the particles from a passenger vehicle for the study. Now the company has developed a collection method for semi-trucks and buses. Bridgestone says this testing process allows it to study the physical and chemical characteristics of particles and learn about their environmental impact.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day and I hope that you have a great weekend.