AD #4407 – Scout’s Sales Plan at Risk; VW Taking China Platform to Europe; Cybercab Needs LFP Batteries at Scale

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

SCOUT’S SALES PLAN AT RISK
Scout was dealt another blow in its bid to sell directly to consumers. A California judge, for a second time, denied motions by Volkswagen Group of America and Scout to dismiss a lawsuit brought against them by the California New Car Dealers Association. The state’s law bans manufacturers, or any affiliated brands, from competing with their own franchised dealers, which the California New Car Dealers Association says Scout is doing because it’s owned by the Volkswagen Group. Scout argues that Volkswagen Group of America has deals with its U.S. dealers, not the Volkswagen Group, so it should not be considered an affiliate of Volkswagen Group of America. But the judge ruled again that the law was interpreted correctly, so the Association says it’s moving forward with its lawsuit, which could be used as precedent for any future litigation.

VW USING CHINA ARCHITECTURE IN EUROPE
In other VW Group news, is it planning to scale back its software partnership with Rivian? VW invested nearly $6 billion into Rivian to develop software for vehicles outside of China, but it also developed a separate electronic architecture with Xpeng for the Chinese market. And now Manager Magazin reports that the automaker is considering using the platform it developed with Xpeng for the VW, Skoda and Cupra brands in Europe. The architecture would be used for about three-quarters of next-gen models from the brands. It’s interesting that VW is considering this. Last week, it was reported that the first model based on the Xpeng platform is selling poorly in China. So perhaps VW believes it will be more appealing to European customers.

PORSCHE’S TURNING PROFITS AROUND
And one last bit of VW Group news, despite posting a drop in revenue and lower sales, Porsche’s profitability is holding up so far this year. The automaker sold more than 178,500 in the first nine months of year, down 16% from a year ago. And its revenue of €25 billion is a 6% decline. But Porsche recorded an operating profit of €1.7 billion, which was significantly higher than last year when heavy restructuring charges put a dent in its earnings. And it posted a 6.9% operating margin through the first nine-months of the year. And with its profits stabilizing, Porsche is sticking with its full-year earnings forecasts.

GM 1ST LEGACY AUTOMAKER ON NASDAQ
General Motors is moving its stock listing to the NASDAQ from the New York Stock Exchange, becoming the first legacy automaker on the NASDAQ. The automaker expects to start trading in the middle of November and it will continue under the same “GM” ticker symbol. The NASDAQ is a more tech-focused exchange and GM says its “technology-driven strategy” makes it a “natural home.” But it also hopes to get included on the Nasdaq-100 Index, which triggers mandatory buying from funds and portfolios that track it. GM’s current market value is around $64 billion.

  

U.S. SALES HOT ON CHINA’S HEELS
October new car sales in the U.S. and China are going to be really close again. At its peak China sold about 1 million more cars a month than the U.S., but in September the difference was about 270,000. And now the China Passenger Car Association is forecasting that about 1.6 million new cars will be sold in October, a drop of 1.1% from September and nearly 30% worse than last year. Hyundai and Kia are really starting to struggle in China. For the first time ever, combined monthly sales dipped below 10,000 units in September, a fall of nearly 40%. Overall imports are also shrinking. They were down almost 50% last month to just 21,000 cars. And one of the most shocking falls is sales of cheap cars. While the overall China car market is down about 20% for the year, sales of models priced between under $7,500 are down 55%. Even models priced between $15,000 and $22,500 are down 27%.

CHINA SALES FORECAST TO INCREASE NEXT YEAR
But it looks like the drop in China car sales may have bottomed out. According to the China Passenger Car Association, sales are expected to increase 2% next year thanks to new products and less pressure to cut prices. Automakers are forecast to sell 18.5 million passenger cars this year in China, down from 23.7 million in 2025.

   

CYBERCAB NEEDS LFP BATTERIES AT SCALE
Tesla will probably start taking some of the batteries that it uses for stationary storage and put them in the Cybercab. Munro Live did a deep dive into the engineering of the robotaxi and part of the development team at Tesla revealed it will need to bring LFP batteries into the platform when it scales up production. No doubt that’s because LFP batteries are cheaper, but the team also revealed that the Cybercab needed less batteries than they originally thought. So, they may be able to still hit range targets even with the cheaper batteries.

BYD GOING AFTER ROLLS-ROYCE
BYD’s Yangwang brand is getting ready to take on Rolls-Royce. It teased a picture of its all-new ultra luxury sedan and revealed its name, Altior. The model is expected to make its full debut early next month.

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