AD #4295 – Repos Increase w/ High Car Prices; U.S. Could Eliminate Fuel Tax; South Korea Military Wants Hyundai Robots

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

U.S. COULD ELIMINATE FUEL TAX
President Trump is talking about eliminating the federal gas and diesel tax. And you know what that probably means. We think the President knows that oil prices aren’t coming down anytime soon. Oil is still over $100 a barrel and prices at the pump average over $4 a gallon for gasoline and over $5 for diesel. But eliminating the federal tax won’t help much, it’s only 18.4 cents a gallon for gas and 24.4 cents for diesel. Consumers will welcome any relief, but high prices at the pump will almost certainly hurt new car sales. They fell 7% in April and unless things turn around soon, automotive analysts may have to revisit their forecasts for full year sales.

LEGISLATORS MOVE TO BAN CHINESE CAR TECH
Democrats and Republicans can’t seem to agree on anything these days. But they do agree on keeping Chinese cars out of the U.S. market. So they’re joining forces to enact legislation that will do exactly that. In the U.S. Senate, Republican Bernie Moreno and Democrat Elissa Slotkin introduced legislation that will ban vehicles designed in China that use Chinese software and connectivity equipment. In the House of Representatives, Democrat Debbie Dingell and Republican John Moolenaar, did the same thing. Interestingly, the Biden Administration adopted regulations that already included that ban. But with President Trump in China wanting to score a big win, and with the President having said he would welcome Chinese automakers who want to make cars in the U.S., these legislators aren’t taking any chances. They want to make the ban a law, not just a regulation.

GM CUTS IT JOBS
General Motors is cutting hundreds of workers from its information technology department. The cuts will affect about 500 to 600 employees globally, which in addition to reducing costs, will put the company in a better position for the future, according to GM. While the automaker is eliminating some IT jobs, it will fill those positions with workers with skills in other technology areas like software and AI.

SOUTH KOREA MILITARY WANTS HYUNDAI ROBOTS
To help support declining troop numbers, South Korea’s military is in discussions with Hyundai to use robots in noncombat roles. It’s considering using Boston Dynamics’ robot dog Spot or its four-wheeled MobED mobility droid for surveillance, reconnaissance and logistics. South Korea’s standing forces have fallen 20% over the past six years to 450,000 troops because of a declining birth rate. And it’s expected to drop by another 100,000 troops by 2040. So to help offset that decline, South Korea is transitioning its military from a manpower-intensive structure to a technology-centric one.

           

FORD LAUNCHES BATTERY STORAGE BUSINESS
Ford officially launched its battery storage business called Ford Energy. The wholly owned subsidiary will provide battery energy storage systems for utilities, data centers and large industrial and commercial customers in the U.S. Ford Energy will manufacture prismatic LFP cells under license from SK On, which were supposed to go into Ford electric vehicles. But after the company’s EV rollback, Ford repurposed its battery factory in Kentucky to build the storage systems, which will deploy at least 20-GWh a year. First customer deliveries are planned for late 2027.

UNIFOR GOING AFTER FORD 1ST
And in other Ford news, Canadian union Unifor says it will target the automaker first in its negotiations for a new labor contract. Unifor hasn’t publicly revealed what it’s looking to gain, but if a deal is reached it will set the pattern for new agreements with General Motors and Stellantis, whose contracts expire in September. Ford and the union have scheduled negotiations that start June 22, just shortly before a mandated review of the USMCA trade deal on July 1.

MERCEDES ROLLS OUT COMPANY-WIDE AI PLATFORM
Mercedes recently held a company-wide hackathon, which drew in more than 1,500 employees from across the world all with the effort of designing new AI and automation use cases. It says the best ideas to come from that will now be developed further through a new global AI platform that allows workers to test and deploy solutions into everyday business operations and across all functions, including R&D, production, sales, financial services, HR and IT. Mercedes is developing this platform because it believes software and AI are becoming bigger factors to a company’s overall competitiveness.

MERCEDES-AMG GT PUMPS OUT FAKE ENGINE NOISES
Speaking of the German automaker, the new AMG GT with axial flux motors will make its debut a week from today. In anticipation of that the company just wrapped up a special testing session with Mercedes’ F1 development driver Doriane Pin and CEO Ola Källenius, who shared a few details about the production version. He says the EV will feature liquid-cooled cylindrical battery cells, which appear to be fitted into 14 modules that make up the entire pack. We also see signs of active aero, like a spoiler that pops out of the rear decklid. And we learn that the car will pump out fake engine noises when in the Sport + mode, kind of like Hyundai’s N electric vehicles, but the Mercedes sounds more like a V8 to us.

REPOS UP 43% SINCE 2019
They say that cars have become unaffordable and one way to measure that is by looking at how many get repossessed when owners fail to make their payments. Cox Automotive says repossessions have shot up 43% since 2019. But would you care to guess how many vehicles get repossessed every year? Here’s a hint, think big. I guessed 300,000. But last year, 1.7 million vehicles were repossessed, that’s over 4,600 every single day, including the weekend. And here’s the kicker. The repossessed cars get sold at auction and if it doesn’t raise enough money to cover the car loan, the owner still has to pay the balance, even though their car was taken away.

But that’s a wrap for today’s show. Thanks for making Autoline a part of your day.