AD #4265 – BYD Cuts Nearly 100K Jobs; GM Idles EVs But Boosts Gas Trucks; Volvo to Make Polestars in the U.S.

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

GM IDLES EVS, BOOSTS GAS TRUCKS
We’re thirty two days into the war in Iran, gasoline prices in the U.S. now average over $4 a gallon, and we’re seeing some wild behavior going on in the market. For the next two weeks, GM is going to idle its assembly plant in Detroit that makes electric pickups and SUVs, at the same time it’s going to boost overtime at its plant in Flint that makes gasoline powered heavy-duty pickup trucks. Ford is also cancelling the summer shutdown for its F-Series pickups so it can make up for lost volume due to a fire at an aluminum supplier plant last year. While higher gas prices can hurt big truck sales, right now GM and Ford say demand is strong. We’ll have a better idea of how sales are going later this week when all automakers will report their results for the first quarter.

MEGA LAYOFF: BYD CUTS NEARLY 100,000 JOBS
It’s not unusual for automakers to announce layoffs when business slows down, but we’ve never seen anything like the scale at BYD. It laid off 97,000 workers last year, which is a staggering number. Yet, that was only 10% of its workforce, which was up to 967,000 employees. In 2023 BYD placed 5th on the Global Fortune 500 of companies ranked by employment. But the company’s profits dropped 19% last year and it missed its sales target. Sales have dropped even more this year, and that’s why it’s getting rid of so many employees.

GEELY, VOLVO STEP IN TO HELP POLESTAR
Polestar needs help, so it’s becoming more integrated with Volvo to cut costs and share manufacturing capacity. Volvo loaned Polestar about $1 billion, and will now convert $274 million of that debt into shares of Polestar. And Geely, the parent company of Polestar, which also loaned it about a billion dollars, will swap $300 million of that debt into Polestar shares. That will take a huge amount of debt off Polestar’s balance sheet, but it will also dilute its shares. Those shares are down 83% from a year ago. Polestar is also going to stop making the Polestar 3 in China because of weak demand, and build it exclusively at Volvo’s plant in South Carolina.

VOLVO TO SELL LYNK & CO CARS IN EU
And speaking of Volvo and Geely, the two companies have signed a deal making Volvo the exclusive importer and distributor of Lynk & Co vehicles in Europe. Lynk & Co is Geely’s premium brand that already sells and rents vehicles in several European countries. But as part of the new deal, Lynk & Cos 01, 02 and 08 models which are all made in China, will be sold at Volvo’s dealerships across the region. The deal is part of Geely’s broader goal of hitting 6.5 million sales globally by 2030, which would make it one of the top 5 automakers in the world.

PONY.AI PROFITS COME FROM TECH SALES
Pony.ai turned a profit in the fourth quarter of last year and WeRide could be getting close to doing the same thing. While there are more people taking rides in their robotaxis, their big jumps in revenue is coming from selling their technology. Pony.ai actually made less from the rides it provided last year, but revenue generated from selling its technology was up nearly 340%. WeRide did better with its service revenue up about 19%, but its product revenue from selling robotaxis, robobuses and robo street sweepers was up 310%. Both companies plan to more than double their robotaxi fleets by the end of this year; Pony.ai wants to have 3,000 and WeRide is aiming for 2,600; but right now they’re seeing much bigger growth from selling their tech to other companies.

      

CHINESE SUPPLIERS SEE MORE PROFITS IN ROBOTS THAN CARS
It’s an unstable time for automotive suppliers, which is why some companies are pivoting to new businesses. Gasgoo reports that a number of Tier 1 suppliers in China are shifting from cars to robotics. For many companies, it’s a smooth transition since there’s a lot of cross-over components, like electric motors, actuators, sensors, castings, wiring and stampings. Another reason for the pivot is that robotics can be more profitable. One Tier 1, called Tuopu, says its robotic actuator business, while still relatively small, had a gross margin 10% higher than its auto parts business. And suppliers like the idea of finding new markets. The automotive business is a cut-throat, hyper-competitive segment that’s not growing, while robotics, especially humanoids, is blowing up.

HONDA MAKES ROADS FROM SAND
Honda has established a new startup, called PathAhead, that says it’s developed the world’s first artificial aggregate made from desert sand. This material, which it calls Rising Sand, can be used to make a number of products, but its main application will be in asphalt and concrete for road construction. The startup plans to set up its own construction plant in Kenya by 2028 to mass produce the material. And it picked Kenya because only about 20% of Africa’s roads are paved.

HONDA E-QUAD DEBUTS IN NEW YORK
One vehicle we could see traveling on those new roads is Honda’s quad-cycle that it first revealed in June of last year. Called the Fastport eQuad it features a pedal-assist powertrain, swappable batteries and regen braking. Deliveries in the U.S. and Europe were originally projected to start late last year, but with the model going on display at the New York auto show next week, it looks like they’ll go on sale this year. No word on pricing for the eQuad yet, which is made in Honda’s Performance Center in Ohio where it used to make the NSX.

GM SHUFFLES CAR & TRUCK PRODUCTION
We’ve got some market intel here courtesy of Autoforecast Solutions. GM is going to shut down its Lansing Grand River plant in December as it closes out production of the Cadillac CT4 and CT5. A replacement for the CT5 will come out in 2028, but no more CT4. The gasoline powered Chevrolet Blazer moves out of the Ramos Arizpe plant Mexico and into Springhill, Tennessee, and the Ramos plant will only make Chevy Equinox and Blazer EVs. Meanwhile its Oshawa, Canada plant, will stop making light duty pickups and only make heavy duty ones.

TONS OF F1 KIT KATS STOLEN
Uh-oh, somebody just stole 12 tons of Kit Kat candy bars. That’s over 400,000 packages. And believe it or not, there’s an automotive angle to this story. Turns out, Kit Kat is now the official candy bar of Formula One. And it’s making bars that are molded to look like an F1 car. Well, that 12-ton shipment disappeared somewhere from where they were made in Italy to their destination in Poland. The company can’t find any trace of them and that’s why it’s gone public with the story.

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