AD #4322 – Peak Oil? Nope. Demand Keeps Growing; 7,000 Tesla Owners Join Class Action Lawsuit; Europe Needs to Save Its Auto Industry

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

PEAK OIL? NOPE. DEMAND KEEPS GROWING
Remember around 2017 when Tony Seba, the founder of RethinkX, predicted that electric cars would cause the oil industry to collapse by 2030? He sure got a lot of headlines. So, did Bloomberg New Energy Finance’s prediction of a global oil glut by 2026. There was a lot of talk about Peak Oil back then, but that was then. Now, OPEC just came out and said it sees no signs of Peak Oil. It’s just the opposite. OPEC sees “robust growth.” In 2020, the world consumed 91 million barrels of oil a day. Last year it hit 105 million barrels, according to the U.S. Energy Information Agency. OPEC predicts it will hit 113 million by the end of the decade. And it says oil demand will continue to grow through at least the middle of this century.  

JLR’S NORTH AMERICAN CEO QUITS
We’re worried about what we see happening at Jaguar Land Rover. First of all, we think Jaguar’s strategy of going all electric and moving way upscale is beyond risky. It’s dangerous. Now comes word that Land Rover will outsource development and assembly of the Defender to Stellantis North America, according to a presentation it gave to investors. On the heels of that announcement, Joe Eberhard, the CEO of JLR North America, announced he’s quitting the company to “pursue other opportunities.”   

LAND ROVER RELIES ON CHERY FOR FREELANDER
Meanwhile, in China, the new electric Freelander that just went on sale was largely developed with Chery. And the price of a new Land Rover Evoque in the country dropped almost in half. Customers can pick one up for just under $30,000. In the U.S., it starts around $50,000. They say that desperate times demand desperate measures, and these sure sound desperate to us. 

EUROPE NEEDS TO SAVE ITS AUTO INDUSTRY
We also don’t like what we see going on in Europe, and are very worried about its auto industry. BMW and Mercedes announced yesterday that they’re getting ready to talk to employee representatives. You know what that means. They’re getting ready to get rid of more jobs. That’s what Volkswagen announced earlier this week: 19,000 jobs going away by the end of this year. And that’s just in Germany. What we’re seeing is Europe’s auto industry starting to crumble. And we think it’s only going to get worse, and it’s going to accelerate. We say Europe needs to do a lot more to protect its industry. Yeah, we’re just gearheads from Detroit, but we’ve always respected the European industry, and we don’t like the way things are going.

SWEDEN WANTS CHANGES TO FSD
Despite five countries in Europe approving Tesla’s supervised FSD, there’s pushback against widespread adoption. Sweden’s transport authority is recommending the EU vote against approval unless Tesla disables its ability to exceed speed limits. FSD has a feature called “Speed Offset,” which allows the vehicle to go over speed limits by a margin set by the driver. EU officials will meet at the end of the month to debate approving FSD, however a final vote is expected to come later. In order to be approved, 15 of the EU’s 27 member states, representing at least 65% of the population, must vote in favor of it.

7,000 TESLA OWNERS JOIN CLASS ACTION LAWSUIT
And speaking of FSD and Europe, Tesla faces a lawsuit from owners that could be very costly. Back in April, the Netherlands road authority, RDW, approved FSD but it was only for vehicles with the current HW4. This upset owners with HW3, who were promised the system was capable of full-self driving, but they claim FSD will never work with HW3. So one owner launched a website in April seeking other HW3 owners to negotiate a settlement or pursue possible legal action. The initiative received 3,000 signups in its first week, but now it’s grown to 7,000 owners and a Dutch law firm is also supporting the case. If Tesla is forced to refund or replace the hardware, it could end up being very costly for the company.

USE GROK TO TALK TO FSD
And in one last bit of FSD news, Elon Musk teased a couple of updates for the system. One will remember your parking preferences, “so that the car goes to the right location at your home, office, school drop off, etc.” And the other update will allow owners to talk to the vehicle through Grok, the AI assistant from Musk’s xAI. It will allow for natural language commands like “turn right here” or “drop us off here.” That feature is expected to arrive in “about 3 months or so.”

           

PUBLIC SUPPORTS U.S. MILITARY RIGHT-TO-REPAIR
Similar to independent repair shops, the U.S. military is also fighting for the right to repair its own vehicles. Currently it’s illegal for military personnel to perform maintenance on things like trucks, drones and jets because while it owns the physical hardware, the contractor retains the IP on the software, tools and manuals. So, even if a vehicle breaks down in combat, only approved technicians are allowed to fix it. Lawmakers have pushed for legislation called the Warrior Right to Repair Act, which would grant military personnel the access they need, but it was stripped from the most recent version of the defense budget. So now the lawmakers are trying to include the Act in future bills, but it may take more awareness from the public to make it through. According to a survey from the Specialty Equipment Market Association nearly 80% of voters would support military right-to-repair but prior to that over 75% were unaware of the issue. 

CHERY LAUNCHES PICKUP TRUCK DIVISION
Chinese automaker Chery recently launched a new pickup truck division for global markets that it calls Rely, but the Chery brand itself is also getting into pickup trucks. And it looks to us like the new mid-size Stockman that it just revealed is a rebadged version of the Rely truck. The Stockman features a diesel plug-in hybrid powertrain and is also designed for global markets. So, there’s a good chance the two brands will cannibalize sales from each other. However, Rely is part of Chery’s commercial division, so it may be able to separate the two by gearing the Stockman to retail customers and/or making it a little more upscale. 

AUTOLINE POLL ON TARIFFS
We asked our Autoline members about the cost impact of U.S. auto tariffs. We wanted to know whether they thought automakers, suppliers, dealers or consumers carried the burden. Here’s some of the feedback we got.

Donswier said, “Just like everything, the eventual source of the money is the consumer.”

David Hamby, agreed. “The customer always pays,” he said.

Steven Relyea, said “While consumers are impacted in higher vehicle costs ($1,500 to $8,000 per car), US automakers and suppliers are absorbing billions in losses because of tariffs on steel, aluminum, copper, and auto parts. Car dealers profit margins are squeezed due to lower sales with average car prices now past $50,000.”

And Mike McAllister had this to say. “Tariffs threaten not only the automobile industry, but the entire economy of the US.”

Thanks to all you members out there who support Autoline, and especially for your feedback. Autoline is really well watched amongst people who work in the auto industry, including policy makers, and we like to provide a little insight into what you’re all thinking about. 

But that’s a wrap for this show and this week. I hope that you have a great weekend.