+++ Former AUDI boss Rupert Stadler is ready to make a confession about his role in the diesel emissions scandal in exchange for a suspended sentence and a payment of 1.1 million euros, he and his defense team said. The former CEO has been on trial for fraud since 2020 over his role in the scandal after parent group Volkswagen and Audi admitted in 2015 to having used illegal software to cheat on emissions tests. Stadler had previously rejected the allegations. Stadler’s defense team said a statement would be made on May 16, after which the judge will decide whether it amounts to a complete confession and deliver a verdict in June. It was not immediately clear whether Stadler would deliver the statement personally or through his lawyers. Prosecutors also agreed to the deal. A judge had said the 60-year-old Stadler faced a prison sentence of 1.5-2 years, which would be suspended if Stadler agreed to make a confession. The trial is one of the most prominent court proceedings in the aftermath of the diesel scandal at Volkswagen and its subsidiary Audi. Revelations that millions of emissions tests had been manipulated emerged in September 2015. According to prosecutors, engineers manipulated engines in such a way that they complied with legal exhaust emission values on the test bench but not on the road. Stadler was accused of failing to stop the sale of the manipulated cars after the scandal became known. Stadler has been on trial along with former Audi executive Wolfgang Hatz and an engineer. Hatz and the engineer confessed to having manipulated engines. Audi declined to comment, saying it was not party to the trial. The deal follows haggling between Stadler’s defense team, the prosecutors and the court, especially over how much money Stadler would pay in exchange for a suspended sentence. Prosecutors wanted 2 million euros, citing Stadler’s salaries at Audi and Volkswagen and his financial and real estate assets. Stadler’s team had initially argued that 1.1 million euros was too high, as he had no current income and faced hefty legal costs. +++
+++ ELECTRIC VEHICLE START-UPS in the United States are expected to report another quarter of dwindling cash reserves next week, piling pressure on a group of companies that are struggling to ramp up production and have few options for funding in a turbulent economy. Having gone public with hopes of shaking up the automobile industry, these companies have seen their market valuations evaporate in the past few months as EV demand slows and market leader Tesla cuts prices to stoke orders. Lucid Group kicks off first-quarter earnings for the group on Monday, with the company expected to report a 36% sequential slide in cash reserves, according to Visible Alpha. Rivian Automotive, meanwhile, will likely report on Tuesday that its cash balance fell by 6.8% to $10.78 billion from the preceding quarter, per a Visible Alpha estimate. The Amazon.com backed firm, whose shares have declined by nearly a quarter this year, is also expected to report a larger loss of $1.75 billion as both deliveries and production fell in the period. It posted a $1.59 billion loss a year ago. Fisker and Nikola, both of which report earnings on Tuesday, are expected to see their cash reserves decline by 5% and 15%, respectively, according to Visible Alpha. “Any company that’s losing money with a low valuation is toast and EVs are no exception. I think it is just a slow bleed. Maybe they’ll get lucky and some of their technologies maybe bought by bigger players”, said Thomas Hayes, chairman of hedge fund Great Hill Capital. A drop in valuations of companies has rendered selling equity for precious cash more ineffective and investors are becoming increasingly unhappy with their stake being diluted as several startups are yet to recognize revenue from operations. British EV startup Arrival and Nikola have issued going-concern warnings in the past few months, with the former set to merge with blank-check firm Kensington Capital Acquisition in a bid to raise cash. Lordstown Motors said this week it could be forced to file for bankruptcy due to uncertainty over a funding deal with major shareholder Foxconn. Its earnings in an unscheduled release on Thursday showed Lordstown’s cash balance fell 11% sequentially. Some of the companies including Lucid and Rivian have also said they would not provide data on reservation numbers going forward, sparking some concern among investors. It is a “disturbing development”, CFRA Research analyst Garrett Nelson said. “What we’ve seen is a trend of less transparency in the reservation count, but overall competition is a big problem”, he added. +++
+++ FERRARI produced a bigger-than-expected 27% rise in first-quarter core profit, and it forecast a strong second quarter when deliveries start for its new Purosangue model, for which waiting lists extend to 2026. The Italian luxury sports car maker said it was reopening orders for the Purosangue 4-door, 4-seater, which had been suspended due to initial “unprecedented” demand. CEO Benedetto Vigna said Ferrari’s overall order book covered production until the end of 2025. But those customers now ordering the 390.000 euro petrol-powered 12-cylinder Purosangue will have to wait until 2026 to receive it. “We were caught by positive surprise for these strong interest”, Vigna told analysts presenting the company’s quarterly results. The CEO, however, confirmed Ferrari’s pledge to keep Purosangue sales below 20% of total group shipments over the car’s life-cycle and not to extend it, to retain a degree of exclusivity. Ferrari’s Milan-listed shares rose as much as 5.6% on Thursday to a new record high of 267.20 euros. The Prancing Horse’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the January-March period came to 537 million euros, toppng analyst expectations of 508 million euros. Higher shipments, led by the Portofino M, the 296 GTB and the 812 Competizione models drove the results, as well as pricing capacity. CFO Antonio Picca Piccon told analysts Ferrari was now applying mid-single digit price increases on selected models and markets it had announced last year. He said the company expected a strong second quarter, followed by a softer second half of the year (the fourth quarter in particular) in line with its planned product cadence. Bernstein analysts noted that Ferrari’s “extremely strong” product mix, pricing power and lengthy order book protected the company against potential recession-driven order cancellations. Ferrari, which has promised its first fully electric model in 2025, confirmed its full-year forecasts, although the Bernstein analysts said they expected them to be raised later in the year. Car price increases will counterbalance current cost inflation, Ferrari said. +++
+++ FISKER a new electric vehicle maker, said it would start delivering its Ocean with swappable batteries made by Ample by the start of next year. The partnership with the battery startup will help Fisker increase scale and adoption of its EVs in the United States and Europe, the electric car maker said, adding that Ample will share revenue related to the battery swapping mechanism. Battery-swapping, replacing a depleted battery with a freshly charged one, is fast emerging as an alternative to charging EVs at utility stations. Fisker added that the initial customer for Ample-powered EVs will be fleet operators who are looking to “transition to electric mobility without economic or operational compromises”. Long charging times that are common at most public and commercial charging stations pose a major hurdle to EV adoption. San Francisco-based Ample is part of a growing group of companies, including Chinese EV makers Nio and Xpeng, trying to revive and update an old idea: Leapfrog charging hurdles by offering quick battery swaps to EV owners concerned about running out of juice while driving. Ample aims to make its batteries and swapping process more widely available to different brands of carmakers. +++
+++ Car manufacturers from JAPAN are seeing their sales tumble in China as the nation continues its rapid adoption of electric vehicles, many of which are being built by local companies. Industry data has revealed that total sales of Japanese auto brands in China fell 32% year-on-year in the first quarter of 2023. Japanese firms now account for 18% of China’s new vehicle sales, down from the 20% share of 2022, the 22% share of 2021, and the 24% share of the market that they had in 2020. Some carmakers are being hit particularly badly. Mitsubishi recently announced that it has suspended production of the Outlander in China for 3 months and is taking a one-time hit of $78 million for its slow sales in the country. Additionally, Nissan posted a 45.8% drop in Chinese sales in the first quarter of 2023 while those from Honda fell by 38.2% and those at Mazda plummeted by 66.5%. Toyota and Lexus posted a sales decline of 14.5%. Speaking with Reuters, Honda chief executive Toshihiro Mibe noted that its Chinese rivals was beating it in certain software technologies, explaining that China’s carmakers are “further ahead of us than we expected”. In general, Japanese car manufacturers have been slow to adopt electric and plug-in hybrid powertrains when compared to some of their Chinese rivals. The country is shifting to electrified vehicles so quickly that the Nissan Sylphy which was China’s top-selling vehicle for three years was beaten out by the plug-in hybrid BYD Song last year. “Japan is the biggest loser of the price war so far”, added founder and chief executive of Automobility, Bill Russo. “As EVs get more affordable, they become more attractive to the core buyers who have been resisting so far, the buyers of foreign brands. So, you can see the writing is on the wall”. +++
+++ KIA , Korea’s second-largest automaker, said Tuesday its sales rose 8.3 percent last month from a year earlier on improved production and product mix amid eased chip supply disruptions. Kia, a smaller affiliate of Hyundai, sold 259.524 vehicles in April, up from 239.539 units a year ago, the company said in a statement. Domestic sales fell 1.8 percent on-year to 49.086 units last month from 49.969, while overseas sales were up 11 percent to 209.945 from 189.329 during the cited period on higher demand for the Sportage, Sorento and Seltos SUVs, it said. From January to April, sales jumped 11 percent to 1.027.775 autos from 925.277 units in the same period of last year. In 2023, the company set a sales goal of 3.2 million units, including overseas sales of 2.6 million. +++
+++ TESLA delivered 75.842 China-made electric vehicles in April, down 14.7% from March, data from the China Passenger Car Association (CPCA) showed on Friday. The figure was however a huge jump from a year earlier, when the city of Shanghai (where Tesla has a factory) was in Covid-19 lockdown. In April last year, the company delivered only 1.512 China-made Model 3 and Model Y cars in the world’s largest auto market. Local rival BYD, with its Dynasty and Ocean series of EVs and hybrids, sold 209.467 vehicles in April, CPCA data showed, up 1.6% from March. CPCA is expected to release more detailed China car sales figures for April next week. Tesla has cut prices in several markets globally and kickstarted a price war in China that since the start of the year has seen more than 40 local and international car brands join in. The price cuts have lowered automakers’ earnings, with Tesla reporting a 24% plunge in first-quarter net income even though its quarterly global deliveries reached a fresh all-time high. The EV giant has however this week moved in the opposite direction, raising prices by up to $290 on its 2 topselling models (the Model Y and the Model 3) in Canada, China, Japan and the United States on Monday. On Friday, it raised prices for its new Model S and Model X vehicles in China by 19,000 yuan ($2,751). Tesla is readying exports of a version of the Model Y to Canada this year from its Shanghai factory, the first time it will ship cars to North America from China, according to a person with direct knowledge of the plan and a production memo seen by Reuters. +++
+++ VOLVO will lay off around 1,300 office-based employees in Sweden as it steps up cost cutting, the Sweden-based automaker said on Thursday. While an earlier efficiency drive had begun to show results, with Volvo this week reporting a strong first quarter, more efficiency was needed, CEO Jim Rowan said in a statement. “Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time”, he said. The 1.300 positions equate to 6% of Volvo’s workforce in Sweden. Rowan told the group did not yet know how much it would save from the new measures. “We’re still working the details through on that”, he said in an interview. The company said it had issued redundancy notices for 1.100 employees, while the remaining 200 white-collar positions would be identified following a review of the business across Sweden. It said it also expected to cut jobs and reduce costs across its global operations in the coming months, including its consultancies. Rowan said he could not yet specify where those jobs would be cut, but that focus would primarily remain on office-based positions. “We sell in over 80 countries or so worldwide, so I think there’s opportunities for us to become more efficient across the entire network”, he told. +++
