+++ BMW has orbited around the pickup segment several times over the past few years without landing in it. In 2016, right after Mercedes-Benz badge-engineered a Nissan Navara into the short-lived X-Class, one of the Munich-based company’s executives confirmed his team was “watching the pickup space closely”. In 2019, an X7-based pickup concept made its debut to haul motorcycles. The final call is no, however. “I think a pickup is beyond the brand”, explained Bernd Körber, the senior vice president of BMW brand and product management, in an interview. “In principle, I would say for a brand like BMW to differentiate, to make cars that are dream cars that really bring out the essence of BMW, we need niche models”, he added. In his opinion, a pick-up simply wouldn’t fit the bill. Mercedes-Benz came to a similar conclusion: It axed the X-Class (which wasn’t imported to the United States) 3 years after unveiling the model. Over at Audi, we haven’t seen a production-bound truck, but the Activesphere concept shown in 2023 featured a truck-like cargo box. That doesn’t mean BMW buyers will need to look elsewhere if they want a vehicle capable of serious off-roading. Körber told that his team has noticed rugged off-roaders, such as the Land Rover Defender and the Toyota Land Cruiser, have become increasingly popular in recent years. BMW doesn’t have Land Rover’s off-roading heritage, though it briefly owned the British brand and supplies some of its engines, but it’s open to the idea of giving buyers a more outdoorsy alternative to the popular SUVs in its range, like the X3 and the X5. “Open to” isn’t synonymous with “developing” and it sounds like nothing is set in stone; this is just an idea bouncing around Munich’s executive board meetings. One factor working in favor of a more rugged SUV is that it would have a global appeal. “Rugged is an interesting trend because it has moved from being a U.S., South Africa and Australia phenomenon into a global phenomenon”, Körber pointed out. If the model receives the proverbial green light for production, it will arrive as a more off-road-capable evolution of an existing model rather than as a standalone nameplate. Put another way, we’re more likely to see a jacked-up X5 with meaty tires than a boxy, G-Class-like SUV designed from the ground up to rip across the desert. There’s no word on when a decision will be made, however. +++
+++ U.S. president Joe Biden is set to announce new CHINA tariffs as soon as next week targeting strategic sectors including electric vehicles, according to 2 people familiar with the matter. The full announcement, which could take place as soon as Tuesday, is expected to largely maintain existing levies, according to one of the people. An announcement could also be pushed back, the person said. Specific sectors were also set to include semiconductors and solar equipment, according to one of the people. Details on the precise value or categories of tariffs that would be imposed were sketchy, but the administration was said to have zeroed in on areas of interest within strategic competitive and national security areas, one of the people said. The U.S. trade representative’s office made their recommendations to the White House weeks ago but a final announcement was delayed as the package was debated internally, according to one of the sources and an additional person familiar with the matter. Biden, seeking re-election in November, is looking to contrast his approach with that of Donald Trump, who has proposed across-the-board tariffs that White House officials see as too blunt and prone to spark inflation. The measures could invite retaliation from China at a time of heightened tensions between the world’s two biggest economies. Trump’s broader imposition of tariffs during his 2017-2021 presidency prompted China’s retaliation with its own levies. Biden has said he does not want a trade war with China even as he has said the countries have entered a new paradigm of competition. Both 2024 candidates have sharply departed from the free-trade consensus that once reigned; a period capped by China’s joining the World Trade Organization in 2001. In 2022, Biden launched a review of the Trump-era policy under Section 301 of the U.S. trade law. Last month, he called for sharply higher U.S. tariffs on Chinese metal products but the targeted products were narrow in range, estimated at more than $1 billion of steel and aluminum products, a U.S. official said. Biden also announced launching an investigation into Chinese trade practices across the shipbuilding, maritime and logistics sectors, a process that could lead to more tariffs. The Biden administration has also been pressuring neighboring Mexico to prohibit China from selling its metal products to the United States indirectly from there. China has said the tariff measures are counter-productive and inflict harm on the U.S. and global economy. +++
+++ HYUNDAI is considering introducing pay-to-use features in its cars, such as the ability to activate heated seats, as part of a move to keep connected to its customers post-sale. “We are looking at feature-on-demand as an option, in order to add more personalising in the car”, said Marcus Welz, head of Hyundai Connected Mobility. This new Europe-based division will bring the Korean company’s car subscription (Mocean) and connected services (Bluelink) ventures together under one roof. “For years we worried about how we were going to sell more cars”, said Welz. “Today we worry about ‘what if all we do is sell cars?’ ”. The new division is about “the future of mobility, from today owning cars to transferring to subscriptions”, added Andreas-Christoph Hofmann, Hyundai’s vice-president for marketing, product and PR. A key to the new division’s plans is a restructuring of Bluelink. Like others, this app currently allows owners to remotely control features such as pre-conditioning, locking and sat-nav. Now, this system (available on newer models fitted with the 10.25 inch infotainment screen) will be offered in 3 grades: Lite (free for the first 10 years; in-car use of maps, online services etc only), Plus (€2.99 a month; access to all remote services) and Pro (€9.99 a month; advanced data-driven services such as in-car payments, including partner offers, to “connect drivers with surroundings”). This is part of a push from Hyundai to get closer to customers post-sale. As part of that, feature-on-demand integration is one of the next steps, although the firm didn’t confirm whether this would affect cars already on the road. This concept is nothing new. BMW, for example, already limits some features, both hardware (heated seats) and software (high-beam assistance), already fitted to the car behind paywalls. It has been widely criticised for this, however. When asked if Hyundai’s goal was the same, Welz said it would look to go beyond today’s examples and also “bring new features into older cars”. “What you have often seen in the industry is an old use case, for example heated seats”, he said. “This was brought to the customer using new technology such as software updates. However, I think the benefit of feature-on-demand is exactly the opposite: to bring new features into older cars”. Without explaining exactly which features could be implemented remotely into older cars, Welz suggested it could instead involve upgrading software around existing components, such as the battery, motors, parking cameras and sensors to eek out more performance at a cost. “A lot of advancements can actually be done through software, so you can utilise the existing hardware. We will keep developing these features and functionality and then we will provide them to users”. +++
+++ LUCID reported mixed first quarter results as a wider-than-expected loss trumped the company’s confirmation that its Gravity SUV is still on track for a 2024 debut. For the quarter, Lucid reported revenue of $172.7 million, topping expectations of $150.1 million and nearly 16% higher than a year ago. Lucid’s loss per share, however, came in at $0.30, higher than estimates of $0.25, with its adjusted loss coming in at $598.4 million compared to the $505.1 million forecast by analysts. “Our sales momentum is building, our focus upon cost remains relentless, and we believe Gravity is on track to become the best SUV in the world”, Lucid CEO Peter Rawlinson said in a statement. Lucid confirmed its Gravity SUV was set for a “late 2024” production start, and its upcoming midsize vehicle was slated for a late 2026 launch. Last month, Lucid announced that it produced 1.728 vehicles and delivered 1.967 vehicles in the first quarter, compared to 2.391 vehicles produced and 1.734 vehicles delivered in Q4. The sequentially higher delivery numbers were positive news for investors, and the company said that it is targeting 9.000 vehicles produced in 2024. Last year, Lucid produced 8.428 vehicles and delivered 6.001 to clients. Lucid’s latest round of EV price cuts announced in February likely boosted sales but hurt the company’s margins, which were also likely impacted by capital expenses incurred for its Gravity production activities. Lucid said capital expenditures hit $198.2 million in the quarter, with expenditures expected to tally $1.5 billion in 2024. In terms of its cash position, Lucid said it had $4.62 billion in cash and cash equivalents on hand, enough liquidity to last into the second quarter of 2025. Lucid announced in late March that it struck a funding agreement with its majority shareholder Ayar Third Investment Company for a $1 billion investment. Ayar is an affiliate of Saudi Arabia’s Public Investment Fund (PIF). “I believe there are 2 factors that set Lucid apart: our superior, in-house technology and the partnership with the PIF”, Rawlinson said in the release. +++
+++ RIVIAN reported mixed quarterly results for the first quarter but will see further cost savings from shifting its upcoming R2 production to its Normal plant and trimming its capital expenditure forecast. The EV maker also reaffirmed its full-year loss forecast and still sees a “path” to “modest gross profit” in the fourth quarter of this year. For the quarter, Rivian reported revenue of $1.20 billion versus $1.17 billion expected, which is an 80% jump from a year ago. However, Rivian posted a loss per share of $1.48 versus $1.27 estimated, with an operating loss of $1.484 billion compared to the $1.299 billion loss expected. Rivian reaffirmed its adjusted loss forecast of $2.7 billion for 2024 but now sees its capital expenditure outlays improving to $1.2 billion from $1.75 billion seen earlier. This is due to the company moving the start of R2 production to its Normal plant, and further savings expected in 2025 and 2026. “We hit several milestones this quarter, including producing our 100.000th vehicle in Normal, successfully navigating the retooling upgrade, and unveiling our new midsize platform, which underpins the R2, R3, and R3X”, CEO Scaringe said in a statement. The company also said that as a result of its retooling upgrade and other improvements, Rivian remains “confident in its path to achieving modest gross profit in the fourth quarter of this year”. By shifting R2 production to its existing US factory instead of its upcoming Georgia factory, Rivian said the company will save more than $2.25 billion. Following the R2 launch and plant changes, the company now expects its Normal plant to hit 215.000 units of total annual capacity across all vehicles, which includes up to 155,000 units of the R2. Rivian said it had $5.98 billion at the end of Q1 versus $7.86 billion at the end of Q4. Last month, the company reported first quarter R1T and R1S production of 13.980 and deliveries of 13.588, topping expectations of around 12.400 units. The company also reaffirmed production guidance of 57.000 vehicles in 2024. Part of bringing down those costs came in the form of a 10% salaried staff reduction, with the company citing economic uncertainty. Though Rivian reaffirmed its forecast to reach “modest gross profit” by the end of 2024, Rivian didn’t reiterate past statements that it was “very close” to achieving a positive contribution margin at the end of 2023.Earlier this year Rivian said its Georgia factory development was suspended for the moment, though Georgia Governor Brian Kemp said Scaringe reaffirmed the company wasn’t abandoning the project. Scaringe said once the R2 was ready for a larger rollout, the upcoming Georgia facility would handle it. The company also said it would be launching its R2 in Europe, which would be a huge market for the company, as it’s not currently selling its larger R1 vehicles on the continent. +++
+++ TESLA sold 62.167 China-made electric vehicles in April, down 18% from a year earlier, lagging the broader market’s surge, China Passenger Car Association (CPCA) data showed on Tuesday. Tesla shares fell 3.8%, amid concerns about softening demand for Tesla cars and an intensifying price war, especially against Chinese rivals. Tesla’s China-made cars, which accounted for over half the automaker’s global deliveries last year, are also exported to markets including Europe and the CPCA didn’t provide a breakdown of Tesla exports by destination. The numbers are a prelude of full data for April due out later this week. Deliveries of China-made Model 3 and Model Y vehicles slid 30.2% from March. The sharp slide contrasts with rising EV sales in the world’s largest auto market, albeit at the slowest pace in a year in the first quarter. China’s new-energy vehicle sales including battery-powered EVs and plug-in hybrids were estimated to hit 800.000 units in April, up 33% on the year and a 2% drop from the month before, according to data. Tesla’s biggest Chinese rival BYD, with its Dynasty and Ocean lineups of EVs and plug-in hybrids, sold 312.048 passenger vehicles in April, up 48.97% year-on-year and a 3.5% increase from March. Tesla, led by its billionaire CEO Elon Musk, saw first-quarter global vehicle deliveries fall for the first time in nearly 4 years. Tesla’s sales of China-made vehicles declined 4% during the January to March period, from a year earlier. The company began the second quarter announcing layoffs of more than 10% of its global workforce and slashing vehicle prices in major markets including the United States, China and Europe. Late April, Musk visited China and made progress towards rolling out Tesla’s advanced driver-assistance package in China, which may help it better compete with local rivals. Tesla will shut down production in its German plant in Grünheide for 4 days due to protests against its expansion plans. The car manufacturer is sending all employees to work from home on Friday. Tesla’s ambitions to expand its German plant hit a roadblock in February when citizens voted against a motion to raze trees and make way for the larger site. Activists have announced several protests against Tesla’s expansion for the coming week, including a rally in front of the factory gates on Friday. +++
+++ TOYOTA is expected to get a big lift from demand for hybrids when it reports annual earnings, illustrating how the world’s top-selling automaker is poised to benefit as hype around battery electric vehicles cools. But the forecast record results, to be helped in part by a boost from the weak yen currency, belie the considerable challenges it faces in critical markets. In China it is pressured by a ferocious price war and in the U.S., the fallout from consumers grappling with higher borrowing costs. Globally, it has felt the pinch of growing competition from Chinese rivals rapidly expanding production of low-priced vehicles. Meanwhile, a safety test scandal at its Daihatsu compact car unit has hurt sales in Japan and the Toyota group’s reputation for quality and safety. In February, the Japanese automaker raised its operating profit forecast for the financial year ended March 31 to 4.9 trillion yen ($31.87 billion), a result that would mark a record profit and an 80% increase on the previous year. For the fourth quarter, it is expected to deliver an operating profit of 747 billion yen, according to the average of nine analysts polled by LSEG. As global demand for battery-powered EVs has slowed, Toyota has cashed in by selling more hybrids, which come with relatively higher margins than regular gasoline cars. Toyota pioneered hybrids more than a quarter of a century ago with the Prius. They made up more than a third of the 10.3 million cars it sold in the financial year just ended, including the Lexus luxury brand. While strong in hybrids, Toyota remains a laggard when it comes to EVs, behind rivals such as Tesla and European and Chinese automakers. Battery EVs made up just 1% of global sales in the year just ended, or about 116.500 vehicles, well below a previously announced target of 202.000 vehicles. The fate of its business in China is likely closely tied to its EV strategy. Given Chinese buyers prefer software-loaded cars, Toyota, may not be able to make a big splash over the next 3 years until it releases next-generation models in China, said Koji Endo, head of equities research at SBI Securities. “It’s obvious that they’re behind in terms of software”, he said. Toyota said it would partner with Chinese tech giant Tencent and unveiled 2 battery EVs for the Chinese market at the recent Beijing auto show. Toyota’s China sales were down 1.6% over the first quarter of the 2024 calendar year, better than sharper declines of Japanese rivals Nissan and Honda, but worse than a 12.5% rise in passenger vehicle sales sector-wide, according to data from an auto industry association. In the U.S., they were up 20% to 565.000 vehicles over the period. +++
+++ The VOLKSWAGEN Polo could be on sale for another five years, having been given a stay of execution by the relaxation of upcoming EU emissions legislation. Initial proposals for the Euro 7 emissions regulations, which were due to be introduced this year, were set to kill off Volkswagen’s supermini, because the cost of making it compliant would have obliterated its profitability. In 2022, Volkswagen CEO Thomas Schäfer told that it made “no sense to go with small cars beyond EU7” because, according to estimations, the rules would have added “3.500, 4.500 or 5.500 euros or more” to the cost of a Polo-sized car. However, those rules were heavily watered down by European lawmakers last year in response to widespread criticism about the added development and homologation costs they would incur. The revised ‘EU6e’ ruleset, Schäfer said, is “not as crazy it was posited initially” and as a result the “Polo will carry on”. The new rules, which come into effect on 1 September 2024, impose the same emissions limits for cars and vans as the EU6 rules and so have little impact on the cost of homologating the Polo. Therefore the Renault Clio rival can survive “definitely until the end of this decade”, according to Schäfer. “We will keep it fresh,” he said, hinting at a substantial round of updates in the medium term to bring it into line technologically with its newer range mates. “The car runs well. It’s a good entry into the brand”. However, it isn’t just emissions rules that threaten the Polo’s commercial viability, he added. “EU7 has been done in a reasonable way; it adds costs to the vehicle but not too crazily”, he said. “What adds cost tremendously is General Safety Regulation 2, which mandates interior cameras and a couple of things you need to add to the platform. So that’s the real complication, but we did it now across the brands, and I think we can carry on”. +++