AD #4288 – BYD Eyes VW Plant for German Production; Ford in Defense Talks with Trump Admin; Nissan Cancels Mississippi EV Plans

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

FORD IN EARLY DEFENSE TALKS WITH TRUMP ADMINISTRATION
Ford CEO Jim Farley revealed the automaker is in “early discussions” with the Trump Administration about defense projects but he said he can’t offer any specifics. Last month, the Wall Street Journal reported that senior defense officials were speaking to auto executives about helping to produce more weapons and military equipment. Farley also said that Ford will play an “outsized role” in helping to onshore critical minerals and other parts such as manufacturing-grade semiconductors.

RIVIAN SCALES BACK GEORGIA PLANT PRODUCTION AFTER LOAN CUT
Rivian is scaling back production capacity at its new plant in Georgia because it will receive significantly less federal money for the project. In 2024, the Department of Transportation approved a $6.6 billion loan for the plant but now Rivian will receive $4.5 billion. The company originally planned to scale production up in two-phases with a capacity of 200,000 each. But now Rivian will only do a single phase of 300,000 units of capacity a year. The Georgia plant is scheduled to open in late 2028 and will produce the R2 crossover and other models based on that platform. Once the Georgia plant is up to full speed, Rivian will have the capacity to build 515,000 vehicles a year along with its current plant in Illinois.

           

NISSAN CANCELS MISSISSIPPI EV PLANS
And in related news, Nissan is cancelling plans to build electric vehicles at its plant in Mississippi. In 2021, the automaker announced it was investing $500 million into the plant to transform it into an EV manufacturing hub and was targeting sales of 200,000 EVs a year in the U.S. by 2028. But now the company is scrapping those plans to “better align with market conditions, customer demand and Nissan’s updated strategic direction.” Instead of building EVs, the plant will build at least five models based on a new body-on-frame platform. The first will be a revived version of the Xterra that will debut in 2028 followed by the redesigned Frontier and a three-row SUV.

BYD EYES VOLKSWAGEN DRESDEN PLANT FOR GERMAN PRODUCTION
VW’s Dresden plant is one of the most unusual assembly plants in the world. It has glass walls for natural lighting and soft indirect lighting everywhere else. There are no conveyors in the plant, and cars glide quietly on induction powered AGVs. Work stations emerge from the floor, then fold back out of sight when their task is done. The flooring is made from imported Canadian maple wood. The whole place looks more like an upscale museum inside instead of an industrial facility. VW built the plant in Eastern Germany to make the Phaeton, which was then-CEO Ferdinand Piech’s dream to make a VW that could compete with Mercedes and BMW. But the Phaeton was a sales disaster. The plant later only made about 5,000 cars a year. VW later made ID 3s there at about the same rate. Now, Car News China reports that BYD wants to take over half the plant so it can add a “Made In Germany” label to the cars it sells there. So what was once a showcase of German manufacturing excellence could become a symbol of an era that is slipping away. 

UAW MISMANAGEMENT LEADS TO $80 MILLION LOST RETURN
The UAW leadership is fond of criticizing the top management at the Detroit Three for being greedy and only caring about profits. But the union clearly needs some lessons in how to handle money. A federal overseer says the union has badly managed investments that help pay for the UAW’s strike fund. That federal monitor, who was appointed by the courts because of deep corruption in the union, says he has, and I quote, “uncovered significant dysfunction, supervisory shortcomings, communication failures, and governance weaknesses.” As a result of that, the union missed out on $80 million in potential returns had it reinvested the money left over in its strike fund. It’s not that the union made bad investments, it didn’t make any investments at all, even though its own policies require it to do so. In a statement, the union says it disagrees with the federal monitor, but none of the union’s leadership would publicly comment about it.    

HYUNDAI LAUNCHES NEW PLEOS CONNECT INFOTAINMENT SYSTEM
The Hyundai Group is getting ready to introduce its all-new user experience system, what it calls Pleos Connect. There’s a large central display that’s split into three main sections, one for ADAS and vehicle status, one for navigation and one for multimedia. While most functions are controlled through this screen, there’s also physical knobs and buttons as well as a small display on top of the dash that has critical information for the driver. On top of that a new AI voice assistant, called Gleo AI, can help with things like navigation and information searches. Rounding out the main functions is a new market for apps that’s an ecosystem for music, video and web browsing. Pleos Connect will first launch this month in Korea on the newest version of the GRANDEUR, a large luxury sedan. That will be followed by a phased global rollout to most Hyundai, Kia and Genesis vehicles. 

HYUNDAI AND KIA SALES DROP MAY SIGNAL MARKET SLOWDOWN
Speaking of Hyundai-Kia, could they be like the canary in the coal mine for U.S. sales? The brands have posted strong sales in the market, but they have now fallen for two straight months with April deliveries dropping nearly 2% for Hyundai and nearly 3% for Kia. A strong pull-ahead from last April played a role, but automakers are still getting squeezed by tariffs, the federal EV tax credit went away, vehicle prices are up over $800 the last 30 days and prices at the pump keep rising. So if two of the hottest brands are down, it could be an indication of what the rest of the market is going to do. 

FORD USES ROBOT DOGS TO TRAIN PLANT APPRENTICES
Traditionally a skilled trades worker at an automotive plant is doing some sort of fitting, welding or fixing, but technology is providing new career paths, like robot dog handler. Ford first started trials with Boston Dynamics’ Spot at its Halewood plant in the UK in 2020 and is now using it to train apprentices. They work together to learn the plant, so Spot can use its thermal camera to detect machines that are running too hot or its microphones to find air leaks. The apprentices also have to do some mild maintenance, like changing rubber feet pads and cleaning Spot’s cooling motors. While the program is still in its trial phase, Ford says it’s looking at two more use cases with Spot that could help cut costs and the skills that these apprentices are learning can also be applied to collaborative robots.

MAGNA’S PROFITS PLUNGE DESPITE RISE IN REVENUE
It’s tough out there in supplier land. Magna reported its Q1 earnings and the numbers reflect a tough business climate, where vehicle production in the U.S., Europe and China fell in the first three months of the year. Magna saw its revenue rise 3% to $10.3 billion. But its operating profit fell 61% to only $87 million. And it lost $12 million for the quarter, versus a net profit of $146 million last year. Magna points out that drop includes a $485 million loss on the assets it sold as part of the divestiture of its Lighting and Rooftop division. That’s a one-time cost, so its numbers should look better going forward, but with everything going on in the industry right now, “better” is a relative term.

But that’s a wrap for today’s show. Thanks for making Autoline a part of your day and I hope that you have a great weekend.