+++ CHINA ’s car exports surged to a record high in April, data showed, as domestic sales slipped 5.8% from a year earlier amid intensifying price competition and consumers’ caution about spending on big items during a shaky economic recovery. Car exports jumped 38% year-on-year to 417,000 units in April, continuing strong momentum from the previous month which posted a 39% growth in exports, the China Passenger Car Association (CPCA) said. An ongoing anti-subsidy investigation by the EU into Chinese automakers has disrupted and put pressure on vehicle exports to the bloc, but China has been actively exploring South America, Australia and ASEAN markets for exports, said Cui Dongshu, secretary general of the association. He said local automakers would have to make a choice between going overseas and losing out, as competition in the domestic market intensifies. Passenger vehicle sales in the world’s biggest auto market fell 5.8% in April from a year earlier to 1.55 million units and slipped 9.6% from March, CPCA data showed. Car sales had risen 5.7% in March on the year, and jumped 53% on the month. “Market sluggishness was worse than expected, while some automakers still strived to keep producing and resulted in rising inventories at dealerships”, Cui said. While the share of new energy vehicle sales scaled a new high, paving the way for the world’s largest auto market to fast-track its green goal, EV sales are still far slower than those of plug-in hybrids (PHEVs). NEVs accounted for 43.5% of total car sales, a record full-month high after hitting a milestone of more than half in the first half of April. China has set a target of 45% by 2027. EV sales quickened to 12.1% in April from 10.5% in March, while PHEV sales jumped 64.2% against a rise of 75.4% in March.EV sales had contracted 6.3% from March while PHEV sales dropped 4.7%. The PHEV segment, which has grown faster since 2022, drives the success of domestic giant BYD, making up 57% of the company’s car sales in April. China’s share of the global PHEV market rose to nearly 70% in the first quarter, Association data showed. Japanese automakers who have pioneered hybrid technologies lagged behind, capturing just 1.9% of the global PHEV market in the first quarter. Mediocre EV sales versus growing bets on an all-electric future underscore slowing demand in China despite a protracted price war that has drawn in more than 40 brands. To woo cautious consumers, China has announced subsidies of up to 10.000 yuan ($1.380) each for auto trade-ins and more automakers, including Tesla and BYD, have started offering best-selling models with no down payments. +++
+++ The National Highway Traffic Safety Administration has opened a preliminary probe into 6.813 FISKER Ocean cars built in 2023, after complaints that the automatic emergency braking system used in the electric vehicles had activated inadvertently. The regulator said its Office of Defects Investigation has received eight complaints alleging activation of the braking system without an apparent roadway obstruction in the vehicle’s forward path, resulting in sudden vehicle deceleration. 3 of the complaints alleged an injury, the safety agency said. NHTSA’s preliminary evaluation will look into the scope and severity of the potential problem to assess its impact on safety. The regulator could close the investigation into Fisker without taking any potential action. The probe adds to Fisker’s woes as its Ocean were already under investigation by the NHTSA for 3 prior incidents. Last month, the safety regulator received complaints that the doors of the company’s EVs sometimes failed to open. Fisker had flagged “going concern” doubts in February, followed by delisting of its stock from the New York Stock exchange and the collapse of talks with a large automaker for a potential deal in March. The startup had said in April it failed to make an interest payment of about $8.4 million on some notes due in 2026 during a 30-day grace period. The cash-strapped firm initiated insolvency proceedings for its Austrian unit on Tuesday, as it looks for strategic options to raise money to meet its debt obligations. +++
+++ FORD plans to assemble 300.000 units of a new model per year at its Spanish plant in the Valencia region starting 2027, Spain’s Industry Ministry said on Friday. The company had said in March it was considering making a new SUV at its plant in Valencia. “It is a model that will guarantee the workload for this factory and prepares it for the future”, the ministry said in a statement. Currently, Ford assembles its Kuga at the plant, which employs 4.800 people, after output of other models was cut back in recent years. +++
+++ HONDA said on Friday it would increase R&D spending this financial year by nearly a quarter to boost its competitive edge in hybrid and other electrified vehicles. Honda, which is a latecomer to purely electric vehicles that only run on a battery, plans to spend 1.19 trillion yen for research and development this year, up 23% from the previous year, it said. “Our current plan is to create an environment that allows us to produce 2 million hybrid models in a year by 2030, and we have been planning our business strategy taking into account necessary investment”, CEO Toshihiro Mibe told reporters. Car makers are focusing more on hybrid vehicles as sales of fully electric vehicles disappoint. Hyundai Motor said that it plans to use investment already lined up for the United States to produce hybrid vehicles at its electric vehicle plant there. Honda’s Mibe said he is seeing “good progress” in ongoing talks with rival Nissan over a possible partnership to collaborate on producing EV components, and that he hopes to update the market in the near future. For the January-March period, Honda posted a 17% sales rise in its biggest overseas market, the U.S., to about 378.000 vehicles. However, its sales in China fell by more than 6% to about 207.000 vehicles. In China, the world’s biggest auto market, Honda is among the Japanese car brands that have struggled against more nimble andfaster-moving local rivals that have attracted Chinese drivers with low-cost, technology-loaded electric vehicles. The company said last month it plans to build an EV production base in Canada and launch 6 EV models branded Ye in China by 2027. +++
+++ INEOS boss Lynn Calder plans to introducere more hardcore off-roaders. The first step in expansion after the Grenadier wagon and Quartermaster pickup will be the Fusilier midsize SUV, revealed in February and due on the market in 2027. Engineered on a skateboard platform (a departure from the ladder-frame chassis of its larger siblings), the Fusiler will be offered as a battery-electric vehicle and a range-extended EV. Offering details on the powertrains, Calder said the BEV would get about 400 km on a charge. The REV variants would get a smaller battery good for about 250 km on its own, the fuel-powered generator used only to replenish the pack, not turn the wheels. After that, the automotive arm of the Ineos petrochemical conglomerate is plotting 2 more SUVs to bracket the Grenadier: one larger, one smaller. These reportedly won’t be as all-out focused on the trail as the Grenadier. I’m just guessing, but if the Grenadier/Quartermaster pair are Wrangler/Gladiator competitors, the larger truck might go more explicit on the luxury to challenge the Grand Cherokee. I’m not sure where the smaller SUV lands. The Grenadier is about 8 cm longer than a Jeep Wrangler Unlimited. The Fusilier is 20 cm longer than a Defender 90. Clearly, there is plenty of room to slot in another model with a slightly different focus, or who knows, maybe it’s a 2-door even shorter than the Fusilier. Calder didn’t say what kinds of architectures these 2 new vehicles would sit on, however, like the Fusilier, they’d be engineered to accept different kinds of powertrains. To make the most of these plans and the balance sheet, Calder said the company’s considering a U.S. factory. At the moment, Ineos owns a single plant in Hambach, France. With the United States already accounting for the most Grenadier and Quartermaster orders, building there would help feed the growth aspirations and avoid the 25% tariff on importing the Quartermaster from France. Or, hey, if Ineos could make that small, hard working, reasonably priced pickup that an increasing number of truck buyers have been begging for for at least 15 years, Ineos could build a bank vault next to that U.S. factory. The decision on a local facility could be a couple years out, depending on where the Fusilier will be built. The Hambach plant is said to max out at 50.000 Grenadiers and Quatermasters annually, when on 3 shifts, but those are larger vehicles than the Fusilier, built on a different platform. Wherever the factory ends up (China being the mentioned alternative) it will begin to fulfill Ineos Automotive’s goal of 300.000 sales per year globally with 10 years. Calder believes that, within a decade, Ineos could be selling 200.000 to 300.000 vehicles worldwide. He has no plans to build anything other than off-road capable 4×4 vehicles. +++
+++ UAW president Shawn Fain has hit out at STELLANTIS over recent employment cuts, which occurred less than a year after the union secured a new long-term contract with the car manufacturer. Stellantis said it would invest an additional $19 billion into the U.S., increase wages by 25%, and provide more than 3.000 temporary workers with full-time employment as part of its new contract with the UAW. Despite this, Stellantis recently fired 199 full-time workers at the Ram 1500 plant, axed 400 engineering, technology, and software jobs in March and will also reduce its Italian workforce by 8%. “Stellantis is pathetic”, Fain said. “Honestly, the leadership is pathetic. You got a CEO over there across the pond that wants to talk about how they need to cut costs and all this stuff, but it didn’t stop him from giving himself a 56 percent pay increase”. Stellantis chief executive Carlos Tavares earned $39 million last year, easily eclipsing the $27.8 million earned by GM boss Mary Barra and the $26.5 million earned by Ford CEO Jim Farley. The UAW appears particularly upset at Stellantis for firing many temporary workers. The company said it would provide 3.200 temporary workers full-time employment within a year. Stellantis usually uses these supplemental employees to fill absences or calls on them when a plant needs more workers. Despite its contract with the UAW, Stellantis axed 539 supplemental employees across the United States in January and 341 in March. “One of the reasons they had the different tiers and they had the temps was to give them some flexibility”, Cornell University labor relations expert Art Wheaton said. “From the union’s perspective, the union always wants job security, and from the company’s perspective, they always want flexibility. So if the temporaries are going to become permanent, it reduces the flexibility for the company. And they say, ‘Gee, if I don’t have to make them permanent, maybe we can just lay them off’ ”. +++
+++ SUBARU and TOYOTA have long worked together on vehicle development, and an executive for the first company recently confirmed that the 2 companies would deepen their partnership. Earlier today, Subaru CEO Atsushi Osaki told reporters that his automaker would team with Toyota to produce 3 new electric crossovers over the next 2 years. “At the moment, it is quite difficult to predict how things will go from here with EVs. There is a huge risk for us to go it alone in this field. We have held talks with Toyota and have agreed that it is better to reduce risks through joint development”, Osaki noted. Toyota is considerably larger than Subaru and owns a 20 percent stake in the company, so it’s not surprising to see the smaller entity leaning on its more established counterpart. Though it has legions of dedicated fans, new electric vehicle development takes a significant investment and time; 2 challenges Subaru will want to mitigate. The company also plans to boost Forester production at its Indiana facility, adding hybrid variants to the roster, and Toyota’s U.S. manufacturing footprint would help Subaru’s EVs qualify for federal tax credits. Subaru also builds vehicles here, but the company’s wait-and-see approach and Toyota’s help will give it some time to make decisions about how and where to make investments in its production capabilities. Though it will continue focusing on growing its EV offerings, Osaki said that Subaru wouldn’t give up on gasoline. “While we have steered toward EVs, we find it important to sell internal combustion products at the same time. So, we already have plans to expand our hybrid product lineup”. That move is expected to include a next-gen hybrid system for the Crosstrek, in addition to the new Forester. Subaru’s CEO also outlined the company’s strong fiscal year performance. The automaker saw annual net income nearly double to over $2.5 billion. Forester sales climbed significantly, moving 48,456 units in the first quarter of the year. +++
+++ In the UNITED STATES , the big headline from president Biden’s new tariffs on Chinese goods announced Tuesday was the massive hit to electric vehicles made in China. New duties on EVs from companies like BYD, Geely and NIO are set to quadruple in 2024: to 100% from 25%. But the question remains: will Biden’s EV tariff move make any difference for EV sales in America? The White House’s sweeping array of new tariffs will raise duties on $18 billion in Chinese imports like steel to semiconductors to medical products. But it is the focus on EVs and manufacturing that stands out. The White House earmarked billions via the Inflation Reduction Act and Bipartisan Infrastructure Law to boost EV adoption and charging, and to create an American manufacturing industrial complex to support EV production. Biden’s move to protect his EV bet is not surprising. And the overall effect on the American consumer will, initially, be slim to none, as there are very few Chinese made EVs for sale in America. Currently, only Buick, Lincoln, Lotus, Polestar and Volvo ship vehicles made in China into the United States. Of those cars, Polestar is the only one that imports an EV, though Lotus has just started shipping its luxury EV in extremely limited quantities. According to KBB, 1.2 million EVs were sold in America in 2023. Beyond the ‘2’ it currently sells, Polestar was on the verge of expanding its offerings here, starting with the ‘3’. The good news for Polestar is that it plans to begin production in South Carolina later this year. Polestar does not break out its overall global sales by territory, but the company delivered 54.600 cars across territories like the China, the EU, and the U.S. last year. Even if a generous half of those vehicles are counted as U.S. sales, the percent of Chinese-made EVs sold in America makes up just over 2% of all EV sales. “The duty is unlikely to significantly impact the U.S. auto market as relatively few Chinese EVs are being imported, and this new level will only further discourage buyers from turning to Chinese EVs”, Beacon Policy Advisors said in a note to clients. “The value for Biden, though, is the attention that nearly quadrupling the tariff grabs and provides the president a clear campaign talking point”. And the auto industry’s main lobbying arm is, not surprisingly, backing the move. “China’s got a major EV overcapacity problem. They’re building too many EVs, too many heavily subsidized EVs, for the domestic market and have no choice but to look abroad to offload those vehicles at budget prices. It’s happening already in Europe”, said John Bozzella, president and CEO of Alliance for Automotive Innovation (AAI) in a statement. “It’s appropriate for the White House to be looking at tools to prevent the U.S. from becoming a dumping ground for subsidized Chinese EVs”. The United Auto Workers (UAW), which endorsed Biden’s reelection campaign earlier this year, also applauded the president’s “decisive” action, calling it “a major step in the right direction”, Ohio senator Sherrod Brown is even pushing Biden to go further, posting last week that tariffs aren’t enough and “we need to ban Chinese EVs from the U.S”. Nonetheless, quadrupling import tariffs to 100% could severely dampen even those minimal sales. And the new duties may ultimately hurt the American consumer in ways beyond sales at a dealership. “Chinese EVs and batteries, along with solar products, will be excluded from the US market”, free trade expert Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, told. “The result will be higher U.S. prices and slower uptake of climate-friendly technology. This is a regrettable price of the U.S.-China Cold War, and U.S. presidential political dynamics”. AutoForecast Solutions’ Fiorani also believes these new tariffs will slow the advance of Chinese made EVs in America, but there could be a backdoor. “Congress is looking to control the importation of vehicles by Chinese brands, but that will be difficult when they’re not made in China”, Fiorani said. “Establishing production facilities outside of China, especially in Mexico or South Korea, will be one of the possible methods of getting around basic legislation”. Later this week, for instance, BYD will debut a new plug-in hybrid EV pickup that will be assembled in Mexico. Advocates for tariffs believe protection from Chinese EV imports are necessary, otherwise American automakers will be overwhelmed by the competition, and a backdoor through Mexico could be the trigger. Hufbauer also believes, however, the tariffs are too extreme and likely overkill. “The US auto industry could certainly survive and even prosper if, say, Chinese EVs and batteries were limited to 15% of the market, rather than excluded”, Hufbauer said. +++
+++ VOLVO has ambitious plans to transition to all-electric vehicles by 2030, aiming for EVs to make up half of its global sales by 2025. However, 2024 has proven to be an abysmal year for its electric models in the States, with sales plummeting by a whopping 69 percent through April. In the first 4 months of 2024, the automaker sold just 1.298 EVs to American buyers versus 4.138 the same period last year. This figure stands in contrast to the simultaneous 55 percent increase in sales of its plug-in hybrid models, totaling 10.124 units, and a 15 percent rise in overall sales from 36.094 in the first quarter of 2023 to 41.555 in the first 3 months of 2024. In fact, Volvo experienced the largest decline in EV sales among luxury brands in America last quarter. Some of this decline can be attributed to the automaker’s product offerings. Currently, American shoppers have a limited selection of fully electric vehicles at Volvo dealerships: the XC40 Recharge and the C40 Recharge. Both are small crossovers that have garnered critical praise. However, they come with starting prices of $52,450 and $53.600, respectively before incentives. That’s significantly more than the Tesla Model Y, which can be had from $44.990 this week, before any incentives. The American EV has had its price changed more times that we can remember in recent months, often dropping to lower levels, something the Swedish automaker has refused to do. The company’s refusal to engage in a price war has left dealers in the U.S. feeling frustrated. They’re grappling with the challenge of selling these expensive compact crossovers at a time when prices are a significant concern for shoppers. On the other hand, this means that Volvo maintains a 16 percent gross margin on each example it sells. Around the world, EVs accounted for 21 percent of the automaker’s sales in the first quarter of the year, more than at any time in the last 2 years. However, sales of the XC40 and C40 Recharge experienced a global decline. The brand’s EV charts saw a boost from new additions to the lineup, such as the EX30 and the EX90, both of which are set to debut in the U.S. soon. The EX90, being much larger in size, will surely cater more to American buyers’ preferences. However, its $76.695 price tag could still raise concerns among cost-conscious consumers. Winning over these shoppers will be crucial, and the EX30, starting at $34.950, may play a significant role in that effort. +++