AD #4329 – Trump To Dump USMCA Tomorrow; Slate Destination Charge: $1,400?; More Automakers Want Aluminum Wiring

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

VW AG WANTS SPLIT TO END-RUN UNIONS
The situation at the Volkswagen Group is going from bad to worse. Sales have plummeted globally, profits have plunged to dangerous levels, the stock is at its lowest point in 16 years and the company is saddled with excess capacity. VW’s CEO, Oliver Blume, wants to slash jobs and close plants in Germany, but his supervisory board, half of which is represented by labor and local politicians, are dead set against it. And they can stop it. The VW Group’s management structure dates back to 1960, when it transitioned from a government-owned company to a private one. Part of the deal allowing that transition was to have half the supervisory board made up of labor and government, and the other half being managers from the company. They even call it the Volkswagen Law or the Volkswagen Act. Well, Oliver Blume wants to pull an end run around it. He wants to split the Group into a company that makes cars and a separate one that makes components. Th e VW Law only applies to the Group. So if he can split off cars and components into their own separate entities, he can go ahead with the restructuring that VW badly needs to do. This could turn out to be one of the biggest boardroom battles of all time and we think the survival of the company is literally at stake.

TRUMP TO DUMP USMCA TOMORROW
Now, over to the U.S., where President Trump is expected to formally announce tomorrow that the United States is pulling out of the USMCA free trade agreement. But no one knows what comes next. The U.S. is currently only negotiating with Mexico and while it will eventually have to negotiate with Canada, nothing is scheduled. Automakers and suppliers are going to cringe at this news. They’ve been stuck in limbo for over a year, not knowing what kind of agreement will be put in place. And because of that uncertainty, they’re holding back on investments in plants and equipment. One thing’s for sure, the Trump Administration’s long list of different tariffs have created a whole new layer of red tape and bureaucracy that are driving the industry crazy.

SLATE DESTINATION CHARGE: $1,400?
Everybody pretty much knows what the cost of the Slate truck and SUV will be. Twenty-five grand for the base model, thirty for the SUV and thirty-two for the fastback version. But what’s the destination charge going to be? Slate hasn’t announced that yet. But Ryan Green, the CFO of Slate, told us it would be the standard destination charge of any EV. So we looked up what Nissan charges for the Leaf and what Chevrolet charges for the Bolt. They’re both in the $1,400 range, so that’s what we’re calling it for Slate: fourteen hundred bucks.

STELLANTIS FALLING SHORT OF PRODUCTION PROMISE TO ITALY
Stellantis promised the Italian government it would do everything in its power to boost car production in Italy. But things aren’t working out to plan. Stella is extending the summer production shutdown of the Fiat 500 at its Mirafiori plant in Italy. It originally planned a three-week downtime but it’s adding an extra week. Stella blames parts shortages from some suppliers. But one of its labor unions says it’s because the car isn’t selling. Last year, Stellantis scheduled production of 100,000 Fiat 500s for this year. But it only produced 15,000 in the first quarter. And if customers aren’t buying them, there’s no sense in making them.

CHINESE MADE JEEPS HEADED TO EUROPE
In the U.S., Jeep is marketed with a lot of patriotism. Lots of waving American flags. But in Europe, Stellantis is going to start selling Jeeps made by Dongfeng in Wuhan, China. Jeep currently sells two models in Europe, the Avenger and Compass, and will expand the lineup to six models in the region by the end of the decade. The Chinese made Jeeps will hit the market in 2030. And no doubt they’ll be marketed on price, not a lot of flag waving.

CHINESE BATTERY CO’S PROMISE TO PAY SUPPLIERS FASTER
China is worried that the price war that shows no signs of going away, will hollow out its automotive industry. It’s what China calls involution. Well, there’s another problem that goes along with this. EV battery makers in China drag their feet when it comes to paying their suppliers. That’s leaving those suppliers financially weak, and adding to the problem of involution. So under government pressure, the battery makers are pledging to pay their suppliers more quickly. Last year, the Chinese government issued rules requiring big companies to settle most payments within 60 days. And the major EV batteries makers have finally agreed to do just that.

MORE AUTOMAKERS WANT ALUMINUM WIRING
Tesla is the first automaker we’re aware of that started using aluminum wiring for high voltage power. And now Stellantis, Ferrari and BMW are starting to use it, too. One reason is that the cost of copper has nearly doubled since the start of the year. Aluminum is now $3,000 a ton cheaper. Another reason is that aluminum is 20% lighter than copper. But there’s another reason, too, and it has to do with assembly. Instead of having a floppy, copper wiring harness to install in a car, you can make rigid, aluminum cables. Or at least, that’s what Tesla has done. These are far easier to install and in fact, lend themselves to robot assembly. So we’ll be watching to see if Stella, BMW and Ferrari take full advantage of what aluminum wiring can provide.

NEXT NISSAN FRONTIER DUE LATE 2029
We’ve got some future product intel from our friends at AutoForecast Solutions on the Nissan Frontier pickup truck. The current model is doing quite well in the U.S. market, with sales up 48% in the first quarter, hitting 21,000 units. Good thing it’s doing well. The next version of the truck will not be out until December, 2029. AutoForecast reports it will continue to be built at Nissan’s assembly plant in Canton, Mississippi. And for all you suppliers in the audience who have to track these things, the code name of the new Frontier is H62B, and the platform code is D23/F-Alpha.

As we noted yesterday, Autoline will be off the air next week so the crew can take a summer break and recharge for the second half of the year. And with that we wrap up today’s report. Thanks for tuning in to Autoline Daily.