+++ A U.S. manufacturing trade group on Friday urged the Biden administration to take steps to block the import of low-cost CHINA automaker imports from Mexico that it says could threaten the viability of American car companies. “The introduction of cheap Chinese autos (which are so inexpensive because they are backed with the power and funding of the Chinese government) to the American market could end up being an extinction-level event for the U.S. auto sector”, the Alliance for American Manufacturing said in a report. The group argues the United States should work to prevent automobiles and parts manufactured in Mexico by companies headquartered in China from benefiting from a North American free trade agreement. “The commercial backdoor left open to Chinese auto imports should be shut before it causes mass plant closures and job losses in the United States”, the report said. Vehicle and parts produced in Mexico can qualify for preferential treatment under the U.S.-Mexico-Canada trade agreement as well as qualifying for a $7.500 electric vehicle tax credit, the report noted. The issue has taken on new interest after news outlets reported that China’s BYD plans to set up an electric vehicle factory in Mexico. BYD, known for its cheaper models and a more varied lineup, recently overtook Tesla to become the world’s top EV maker in terms of sales. Tesla itself announced plans almost a year ago to build a factory in Mexico, in the northern state of Nuevo Leon. In October, Mexico said a Chinese supplier for Tesla and a Chinese technology company would invest nearly a billion dollars in the state of Nuevo Leon. A bipartisan group of U.S. lawmakers has urged the Biden administration to hike tariffs on Chinese-made vehicles and investigate ways to prevent Chinese companies from exporting to the United States from Mexico. A group of lawmakers urged U.S. Trade representative Katherine Tai to boost the current 27.5% tariff on Chinese vehicles and said USTR “must also be prepared to address the coming wave of (Chinese) vehicles that will be exported from our other trading partners, such as Mexico, as (Chinese) automakers look to strategically establish operations outside of (China)”. Alliance for Automotive Innovation CEO John Bozzella has said that proposed U.S. environmental regulations could let China gain “a stronger foothold in America’s electric vehicle battery supply chain and eventually our automotive market”. The U.S. Treasury issued guidelines in December on the $7,500 EV tax credit aimed at weaning the U.S. electric vehicle supply chain away from China. +++
+++ First came the fake exhaust tips. Then came fake engine noises. Fake vents have always been a thing. But now the upcoming DODGE CHARGER EV will reportedly introduce an all-new form of deception: fake vibrations to mimic the rumble of a V8 engine. The transition from internal combustion to electric has hit old school car enthusiasts pretty hard. The transition of an iconic muscle car like the Dodge Charger almost seems sacrilegious. Easing them into the change, according to a patent filed by parent company Stellantis and unearthed by Mopar Insiders, is a system called Active Vibration Enhancement. AVE employs a force generator that transmits vibrations to the specific points on the vehicle body. The patent filing calls out steering wheel and seats as examples, but there could be other points as well. AVE will work in conjunction with the Active Sound Enhancement system, which replicates the sound of an ICE engine. Both AVE and ASE are activated by signals from sensors monitoring the accelerator pedal position, electric motor speed, wheel speed and torque. Together, they provide what Stellantis describes as a “vibroacoustic experience”. The patent says that other benefits of the system include alerting “the driver that the vehicle is on and ready to drive because it provides audible and tactile feedback, which does not occur with other current electric vehicles and can lead to unintended vehicle movement”. The ASE also doubles as a pedestrian alert. The patent also describes something called the Exhaust Sound Enhancement system. The description sounds like the Fratzonic Chambered Exhaust that Dodge has teased before. The ESE uses a “tuned exhaust assembly” with external speakers that pipe noises through a mixing chamber, which then funnels the sound waves through a “simulated ‘exhaust’ port” so that the note sounds more acoustic than digital. Marketing gimmicks to mimic power have been around as long as there have been cars. Remember the optional Shaker Hood on E-body Challengers? The new systems could help inject some personality into the electric Charger, or they might ring false, or they might feel charmingly nostalgic years from now. We’ll see how the court of public opinion reacts when the Charger is revealed on March 5. +++
+++ ELECTRIC VEHICLES are getting some hefty discounts this year. In order to deal with a slowdown in demand for big, expensive electric cars (and dwindling federal incentives) dealers and manufacturers in the United States are pouring on discounts. Deals have abounded in the EV market since last summer, when these cars started piling up on dealer lots. Elon Musk’s aggressive discounting of the popular Tesla Model 3 and Model Y didn’t help either. By the end of last year, electric cars were seeing some of their highest discounts ever. Average EV incentives rocketed to 9.8% of average transaction prices from 2% just a year earlier. The discounts are continuing into this year, with some of the most expensive models seeing the biggest price cuts. Changes to requirements for a $7.500 electric vehicle tax credit have also put more responsibility on the dealer and the manufacturer to discount prices. As demand from wealthy early adopters in the EV segment dries up, affordability is a new deciding factor for the success of an electric car. This is the list of the most discounted electric cars in January: 1. Mercedes-Benz EQE SUV (average discount $10.002), 2. BMW i7 ($9.194), 3. Volvo C40 ($8.946), 4. Porsche Taycan ($6.614), 5. Lexus RZ 450e ($4.492), 6. Audi Q8 e-Tron ($4.404), 7. Volkswagen ID.4 ($3.281), 8. BMW i5 ($3.204), 9. BMW i4 ($3.152) and 10. Hyundai Ioniq 5 ($3.058). +++
+++ HYUNDAI MOTOR GROUP ’s output at its car manufacturing plants in India has reached a record 1.08 million units last year, surpassing the 1 million unit milestone for the second year in a row. According to data from the Korea Automobile Manufacturers Association, Hyundai produced 765.000 units and Kia 319.878 units in India last year, bringing the combined total production to 1.084.878 units. It marked the highest annual production volume ever recorded by the 2 companies in the South Asian country. The combined production of the two companies in India exceeded 1 million units for the first time in 2022. Hyundai has long established India as one of its largest global production bases. The company established its first Indian manufacturing plant in 1998 and a second one in 2008. Currently, Hyundai produces around 10 models with a focus on compact SUVs, such as the Creta and Venue. Hyundai plans to begin operating a third plant (previously owned by General Motors) next year. Kia has also operated its own separate manufacturing plant in India since 2019. Hyundai and Kia collectively sold 860.000 cars in India last year. For 2024, Hyundai aims to sell 613.000 units and Kia aims for 280.000 units, targeting combined sales of 893.000 units; up 3.8 percent from the previous year. Over the past year, the Hyundai Motor Group has announced new investment plans in India totaling approximately 5 trillion won ($3.75 billion), reflecting the group’s intent to better target one of the fastest growing major automotive markets in the world. +++
+++ During a press briefing outlining JEEP ’s strategy for the next couple of years, the brand confirmed that the Recon, the electric not-a-Wrangler, will finally be on sale in 2025. It will be the second electric Jeep launch in America, with the Wagoneer S launching first this year. Jeep’s CEO, Antonio Filosa, announced that the first full year for Recon would be 2025, but the exact timing was left fuzzy. It seems to us that we’ll likely see some sort of announcement and production model reveal at the very end of this year, with production and deliveries happening early next year. Also confirmed was the fact that the Recon will be based on the STLA Large platform, just like the Wagoneer S and presumably the upcoming Charger. Dual motors seem an almost guarantee, as do independent suspension all-around and unibody chassis construction. The platform also supports between 85 and 118 kWh of battery capacity and 400 or 800 volt architectures. The Recon’s launch will be part of Jeep’s widening electrification plans that incorporate both full EVs and hybrids. The Wagoneer S will be Jeep’s first EV on sale in the U.S., and Filosa confirmed again that it will go on sale in the third quarter of this year. He also said that 4xe offerings will expand between now and 2025, though wouldn’t go into details on which models and what kind of hybridization. Jeep has previously announced 4xe versions of the Wagoneer and the Gladiator. The company also currently sells a 4xe version of the Compass in Europe. And on the subject of smaller Jeeps like Compass and the discontinued Cherokee and Renegade, Filosa said they’ve been discontinued “so far”. So that’s not a confirmation of anything coming back, but it also suggests Jeep is conscious of the need for smaller, more affordable offerings. +++
+++ LOTUS completed its SPAC merger last week in the U.S. and its stock was publicly traded for the first time on Friday. It’s an interesting turn of events for the Geely-backed automaker now known as Lotus Tech given the uncertain EV market, but one that may prove an exception to the struggles of other pure-play EV makers. Trading under the ticker LOT on the Nasdaq, Lotus Tech will focus on the higher end of the EV market with its Eletre and Emeya. “What is most important here is that we are definitely going to more markets at the same time through more models and through more stores”, said Lotus Tech CFO Alexious Lee. By the end of the year Lotus will have 4 vehicles in production, 3 of them EVs. “These 4 models are currently available in Asia Pacific and part of it is also available Europe”, Lee said. “We’re having the new Eletre coming into the U.S. in the third quarter of this year, so different markets have different strategies and different product offerings and different conditions”. Lotus is able to go to market in a number of territories due to the backing of its majority owner, Chinese auto giant Geely. But it also raised a considerable amount of money through its SPAC merger. Lotus Tech said it raised more than $880 million in pre-closing and PIPE financing commitments, with a targeted valuation on listing day of nearly $7 billion. Lotus Tech also had an interesting partner with its SPAC merging, combining with L Catterton Asia Acquisition Corp (LCAA), which is backed by French luxury conglomerate LVMH. As Lotus targets the luxury segment with its vehicles, having a partner like LVMH, with its deep connections and insights into the luxury consumer, could be hugely beneficial. “Now what is more important here is Anish Melwani, who is the CEO for LVMH North America, will be on the board of Lotus Tech”, Lee said. “This is a huge opportunity for us to develop a potential partnership in terms of co-branding, co-marketing, and others in a way to help Lotus execute a strategy and develop our full potential in the fast-growing, underserved EV luxury segment market”. While the LVMH partnership is a nice feather in the cap for Lotus, competitors such as Mercedes, BMW and Polestar would beg to differ that the global luxury EV market is underserved. One thing for sure, however, is that these legacy brands are pulling back investments and rollout of their EV plans while Lotus is going full bore. “If I look at Oliver Wyman’s research, you’ll see that this particular price segment is the biggest volume contributor in the whole luxury space. At the same time, it’s very underserved”, Lee said. “Now, based on this market research, this particular segment is gonna grow about 35% CAGR (Compound Annual Growth Rate] for the next 10 years”. With a strategy tailored to the high-end luxury market, financial backing by China’s Geely, and a new partner in LVMH with its SPAC merger, Lee believes Lotus is set up for success. The big question is whether Lotus’s pricey luxury offerings will resonate with high-end buyers. +++
+++ PORSCHE hypercars don’t come around very often. In the 21st century, we’ve seen the V10-powered Carrera GT and the plug-in hybrid 918 Spyder. The brand hinted at what a follow-up could look like with the Mission X concept, and executives will soon decide whether to build it. “With the concept, we have shown the technology we want to put in the car, the performance profile and the feedback we got at our 75-year celebration was massively positive, so it’s a great motivation for us to do the car”, company boss Oliver Blume told. Of course, putting a car on the path to production takes more than motivation. Feasibility will ultimately play a major role in deciding whether the Mission X will be remembered as a wild-looking concept car or as the 918 Spyder’s successor. It helps that the coupe looks far more realistic than the average design study; it wouldn’t take much tweaking to turn it into a production car, at least from a design perspective. Technology is another hurdle the Mission X needs to clear. The concept is electric, and while Porsche didn’t detail the drivetrain it noted that the system offers a power-to-weight ratio of “roughly 1 horsepower per 1 kilo”. It also promised more downforce than the current 911 GT3 RS and quick charging thanks in part to a 900 volt electrical system. However, these claims remain hypothetical, and Blume has previously suggested that the performance his team envisions for an electric hypercar can’t be achieved with the current battery technology. None of these issues are insurmountable: battery technology is improving at a rapid pace, and we’re sure that a production-bound Mission X would sell out quickly even if it comes with a seven-digit price tag. Porsche has historically done well with limited-edition cars. Blume told that “the idea is to make the decision this year”, so we should learn more about what the future holds in the coming months. +++
+++ A global slowdown in electric-vehicle demand is rippling through the industry, costing jobs and leading to changes in strategic plans, layoffs and production cuts, suggesting pain in the near term could slow the TRANSITION away from gasoline-powered combustion engines. On Thursday, Mercedes toned down expectations on EV demand and said it will update its gasoline-powered engine vehicle lineup well into the next decade. Mercedes delayed its goal to go all-electric by 2030. Instead, it now says it will retain combustion engines in at least half of its vehicles until then. Previously, it had hedged by saying consumer demand would dictate how soon it went all-electric. “High interest rates, moderate oil prices, and range anxiety all have conspired against EV demand. The enthusiasm of early adopters of EVs wasn’t representative of the longer-term and broader demand for these vehicles”, said Brian Jacobsen, chief economist at Annex Wealth Management, which does not own shares in any EV makers. “We expected a reduction in demand and enthusiasm for the vehicles, so we didn’t find the valuations compelling”, he added. The pivot by Mercedes comes a day after EV startups Rivian and Lucid forecast 2024 production well below analysts’ expectations and Rivian cut its workforce by 10%. The pain follows last year’s price war that drained margins and pressured many companies’ already money-losing EV operations. “There is a host of macro-level challenges”, Rivian CEO RJ Scaringe told, adding that high interest rates and geopolitical risks were making consumers price-sensitive. The situation was previously flagged by Ford, General Motors and market leader Tesla, where CEO Elon Musk’s warning in January of the market leader’s slowing pace of growth slashed $80 billion in market value in one day. Prices for used EVs collapsed by 16.4% in January compared with a year ago, according to Manheim Used Vehicle Value index data. Even in China, the world’s largest auto market where demand for EVs has been strong, new-energy vehicle sales fell 38% in January, the first monthly drop since August 2023. That drumbeat of bad news even has the administration of U.S. president Joe Biden set to propose a softening of limits on tailpipe emissions designed to get more Americans into EVs, sources said. Earlier this month, Volvo Cars decided to halt investments in Polestar after the money-losing luxury EV offshoot brand missed a 2023 delivery target. Some industry observers argue that the long-term picture of a transition to EVs remains in place despite any short-term road bumps. “A slowdown in the growth rate from 45% to something more sustainable is not the disaster the press has been pushing. And interest rates affect all car sales, not just EVs”, said Vitaly Golomb, a Rivian investor and investment banker who focuses on mobility. “The effect is more pronounced on more expensive vehicles of course and EVs still average higher price”, he added. “Perhaps automakers need to emphasize the stark difference in total cost of ownership”. +++
+++ Vietnamese electric vehicle maker VINFAST said its 4th quarter net loss deepened 3.4% from the previous 3 months, but it aims to nearly triple vehicle sales this year as it expands into new markets. VinFast’s net losses in the final quarter of 2023 reached $650.1 million, also 1.3% higher than the same period of 2022. It plans to increase deliveries to 100.000 units this year, compared with the almost 35.000 made in 2023, when it missed a 50.000 unit target due to slow EV adoption in some regions and increased price competition. “This year, we expand globally and have all the vehicles, including the right-hand drive model. So we are confident that we are going to achieve the guidance”, chairwoman Le Thi Thu Thuy told after the earnings were released. Other automakers, in contrast, have slashed EV sales targets and curtailed investment plans due to weakening demand in major markets such as the United States. VinFast, which started exporting its VF 8 last year, relies heavily on domestic demand, with around 70% of deliveries going to its affiliate Green SM (GSM), a taxi operator and leasing provider backed by VinFast CEO Pham Nhat Vuong. Fewer than 1.000 units were sold in North America, Thuy said, adding that new dealerships would boost VinFast’s sales this year compared to its direct sales model. 4th-quarter revenue reached $437 million, missing an average analyst estimate of $570.9 million. Full-year revenue was up 91% at $1.2 billion. Founded in 2017 and making EVs since 2021, VinFast has announced numerous EV growth plans overseas. It is constructing a factory in North Carolina, which is expected to launch in 2025, and planning its first manufacturing facilities in India. Thuy said the company was targeting “2 big markets”, Indonesia and India, where it would implement a battery leasing scheme with customers paying a monthly fee the same or lower than the gasoline cost for equivalent vehicles. “We expect to launch factories in India and Indonesia in 2026”, Thuy said, adding that until then its Vietnam plant is able to supply cars to the U.S and other markets. VinFast’s market capitalisation surged to $85 billion (higher than that of legacy U.S. automaker Ford) after its Nasdaq debut in August, but it has since slumped to $12 billion, with its U.S. market entry coinciding with intensifying price competition led by market leader Tesla. +++
+++ VOLVO said on Friday it plans to distribute 62.7% of its stake worth 9.5 billion crowns ($920.17 million) in Polestar to its own shareholders. After completion of the proposed distribution, Volvo said it will retain an 18% stake in Polestar. The heavy involvement by the Swedish car manufacturer in Polestar, where it owns around 48% of the shares, has been criticized by analysts who see the stake as a drag on Volvo’s resources. “As we have significant operational collaborations with Polestar and a financial relationship, it is logical for us to retain influence through a smaller 18% stake in Polestar”, said Jim Rowan, president and CEO of Volvo Cars. The company said it has a financial relationship with Polestar through an outstanding convertible loan of $1 billion. China’s Zhejiang Geely Holding, which is a majority owner of Volvo Cars, will continue to provide operational and financial support to Polestar. The stake distribution will be made through a 2:1 share split, followed by an automatic share redemption process, Volvo Cars said. +++
