WASHINGTON, Jan 31 (Reuters) – Tesla Inc (TSLA.O) disclosed on Tuesday the U.S. Justice Department has sought documents related to its Full Self-Driving (FSD) and Autopilot driver-assistance systems as regulatory scrutiny intensifies.
The automaker said in a filing it “has received requests from the DOJ for documents related to Tesla’s Autopilot and FSD features.”
Reuters reported in October Tesla is under criminal investigation over claims that the company’s electric vehicles could drive themselves. Reuters said the U.S. Justice Department launched the probe in 2021 following more than a dozen crashes, some of them fatal, involving Autopilot.
Tesla did not respond to a request for comment.
Chief Executive Officer Elon Musk has championed the systems as innovations that will both improve road safety and position the company as a technology leader.
Regulators are examining if Autopilot’s design and claims about its capabilities provide users a false sense of security, leading to complacency behind the wheel with possibly fatal results.
Acting National Highway Traffic Safety Administration (NHTSA) chief Ann Carlson said this month the agency is “working really fast” on the Tesla Autopilot investigation it opened in August 2021 that she termed “very extensive.” In June, NHTSA upgraded to an engineering analysis its defect probe into 830,000 Tesla vehicles with Autopilot, a step that was necessary before the agency could demand a recall.
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Autopilot is designed to assist with steering, braking, speed and lane changes. The function currently requires active driver supervision and does not make the vehicle autonomous. Tesla separately sells the $15,000 full self-driving (FSD) software as an add-on that enables its vehicles to change lanes and park autonomously.
The automaker’s shares rose 2% in early trading.
The Wall Street Journal reported in October that the Securities and Exchange Commission is conducting a civil investigation into Tesla’s Autopilot statements, citing sources.
Tesla also forecast Tuesday capital expenditure between $7 billion and $9 billion in 2024 and 2025. The midpoint of that expectation is $1 billion higher than the $6.00 billion to $8.00 billion range provided for this year.
Reuters Graphics
Some of the spending will go toward a $3.6 billion expansion of its Nevada Gigafactory complex, where Tesla will mass produce its long-delayed Semi truck and build a plant for the 4680 cell that would be able to make enough batteries for 2 million light-duty vehicles annually.
Tesla said it recorded an impairment loss of $204 million on the bitcoin it holds, while booking a gain of $64 million from converting the token into fiat currency.
Cryptocurrencies such as bitcoin were hammered last year as rising interest rates and the collapse of major industry players such as crypto exchange FTX shook investor confidence.
Reporting by Akash Sriram in Bengaluru and David Shepardson; Editing by Sriraj Kalluvila and Bernadette Baum
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Jan 25 (Reuters) – Tesla Inc’s (TSLA.O) aggressive price cuts have ignited demand for its electric vehicles, Chief Executive Elon Musk said on Wednesday, playing down concerns that a weak economy would throttle buyers’ interest.
The company slightly beat Wall Street targets for fourth-quarter revenue and profit earlier on Wednesday despite a sharp decline in vehicle profit margins, and it sought to reassure investors that it can cut costs to cope with recession and as competition intensifies in the year ahead.
Deep price cuts this month have positioned Tesla as the initiator of a price war, but its forecast of a 37% rise in car volume for the year, to 1.8 million vehicles, was down from 2022’s pace.
However, Musk, who has missed his own ambitious sales targets for Tesla in recent years, said 2023 deliveries could hit 2 million vehicles, absent external disruption.
Tesla’s sales prospects, as it confronts a weaker economy, are a key focus for investors. The company said it maintains a long-term target of a compounded 50% annual rise in sales.
Musk addressed the issue at the start of a call with investors and analysts.
“These price changes really make a difference for the average consumer,” he said, adding that vehicle orders were roughly double production in January, leading the automaker to make small price increases for the Model Y SUV.
He said he expected a “pretty difficult recession this year,” but demand for Tesla vehicles “will be good despite probably a contraction in the automotive market as a whole.”
Shares rose 5.3% in extended trading.
CYBERTRUCK
The company is relying on older products and Musk said its Cybertruck, its next new electric pickup truck, would not begin volume production until next year. Reuters in November reported that the highly anticipated model would not be produced in volume until late this year.
Tesla will detail plans for a “next-generation vehicle platform” at its investor day in March.
Tesla’s vehicles “are all in desperate need of updates beyond software,” said Jessica Caldwell, Edmunds’ executive director of insights. She said Tesla will largely depend on the cheaper unit as well as Model 3 and Model Y to bring EVs to the masses.
“It’s unlikely that the Cybertruck will attempt to achieve mass-market volumes like the Detroit competitors.”
Reuters Graphics
[1/5] A Tesla supercharging station is seen in the early morning sun, in Kettleman City, California, U.S., January 25, 2023. REUTERS/Mike Blake
Reuters Graphics
Analysts said Tesla’s goal is bullish given the macroeconomic uncertainties.
“I think that you’re going to see some severe demand destruction across consumer spending and I think cars are going to take a big hit,” Edward Moya, senior market analyst at OANDA, said.
Tesla said it does not expect meaningful near-term volume growth from China, since its Shanghai factory was running near full capacity, rebounding from production challenges last year.
“Even a small cooling of demand will have significant implications for the bottom line,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.
Tesla said that its automotive gross margins, which dropped to a two-year low of 25.9% in the reported quarter, were pressured by the costs of ramping up battery production and new factories in Berlin and Texas, as well as higher raw material, commodity, logistics and warranty costs.
Tesla expected its automotive gross margin to remain above 20%.
Margins generally are expected to be under further pressure from its aggressive price cuts. Tesla, which had made a series of price increases since early 2021, reversed course and offered discounts in December in the United States, followed by price cuts of as much as 20% this month.
Analysts had said Tesla’s profitability gave it room to cut prices and pressure rivals. The company’s $9,000 in net profit per vehicle in the past quarter was more than seven times the comparable figure for Toyota Motor Corp (7203.T) in the third quarter. But it was down from almost $9,700 in the third quarter.
“In severe recessions, cash is king, big time,” Musk said, adding that Tesla is well positioned to cope with an economic downturn because of its $20 billion of cash.
The company’s stock posted its worst drop last year, hit by demand worries and Musk’s acquisition of Twitter, which fueled investor concerns he would be distracted from running Tesla.
Musk dismissed surveys that suggest his political comments on Twitter are damaging the Tesla brand. “I might not be popular” with some, he said, “but for the vast majority of people, my follow count speaks for itself.” He has 127 million followers.
Revenue was $24.32 billion for the three months ended Dec. 31, compared with analysts’ average estimate of $24.16 billion, according to IBES data from Refinitiv.
Tesla’s full-year earnings were bolstered by $1.78 billion in regulatory credits, up 21% from a year earlier.
Adjusted earnings per share of $1.19 topped the Wall Street analyst average of $1.13.
It ended the fourth quarter with 13 days’ worth of vehicles in inventory, more than four times higher than the start of 2022, and a record $12.8 billion in value.
Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru, Additinoal reporting by Joe White and Ben Klayman in Detroit and Kevin Krolicki in Singapore
Writing by Peter Henderson
Editing by Sriraj Kalluvila, Matthew Lewis, Sam Holmes and David Goodman
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Model 3 price in Germany in line with Volkswagen’s ID.3
Jan 13 (Reuters) – Tesla (TSLA.O) has slashed prices on its electric vehicles in the United States and Europe by as much as 20%, extending a strategy of aggressive discounting after missing Wall Street estimates for 2022 deliveries.
The move, which prompted a 3.8% fall in Tesla’s shares in Frankfurt, came after CEO Elon Musk warned that the prospect of recession and higher interest rates meant it could lower vehicle pricing to sustain volume growth at the expense of profit.
The lower pricing across Tesla’s major markets marks a reversal from the strategy the automaker had pursued through much of 2021 and 2022 when orders for new vehicles exceeded supply. Musk acknowledged last year that prices had become “embarrassingly high” and could hurt demand.
The U.S. price cuts, announced late Thursday in U.S. time on the Model 3 sedan and Model Y crossover SUV, ranged between 6% and 20% compared with prices before the discount, according to Reuters calculations.
That is before an up to $7,500 federal tax credit that took effect for many electric vehicle models at the start of January.
Following is a table of the price cuts by model in Germany and the United States:
Reuters Graphics
Tesla also cut prices for its Model X luxury crossover SUV and Model S sedan in the United States.
In Germany, it cut prices on the Model 3 and the Model Y – its global top-sellers – by between about 1% and almost 17% depending on the configuration. It also cut prices in Austria, Switzerland and France.
For a U.S. buyer of the long-range Model Y, the new Tesla price combined with the U.S. subsidy that took effect this month amounts to a discount of 31%. In addition, the Tesla move broadened the vehicles in its line-up eligible for the Biden administration tax credit.
Before the price cut, the five-seat version of the Model Y had been ineligible for that credit, a designation Musk had called “messed up”. After the price cut, the long-range version of the Model Y will qualify for the $7,500 federal credit.
“This should really boost 2023 (Tesla) volumes,” Gary Black, a Tesla investor who has remained bullish on the company and its prospects through the recent, sharp share price decline, said in a tweet. “It’s the right move.”
Still, some users on Tesla fan forums online complained the price cuts disadvantaged customers who had recently bought their vehicle, leaving them with a lower-valued item on the second-hand car market.
“I’m not very pleased with these huge price sways. Just reducing 10,000 euros like that – definitely makes you feel that you just paid far too much,” one user wrote on a ‘Tesla Drivers and Friends’ forum on Friday.
In China, where Tesla cut prices last week by 6-13.5%, owners protested at delivery centres across the country, pressing Tesla for compensation.
Before the price cut, Tesla inventory in the United States, as tracked by the models its website shows as immediately available, had been trending higher. Prices on used Tesla models had also been declining, increasing the pressure on it to adjust new-car sticker prices.
For 2021, the United States and China combined had accounted for about 75% of Tesla sales, although the automaker has been growing sales in Europe, where its Berlin factory has been ramping up production.
Reuters Graphics
NEW SALES LEADERSHIP
The shift is the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee U.S. output and sales.
Tesla cut prices in China and other Asian markets last week. Along with previous price cuts announced in October and recent incentives, the Chinese price for a Model 3 or Model Y was down 13% to 24% from September after the recent move, Reuters calculations showed.
Tesla has also cut prices in South Korea, Japan, Australia and Singapore.
Analysts had said the Chinese price cuts would boost demand and increase pressure on its rivals there, including BYD (002594.SZ), to follow suit in what could become a price war in the largest single market for electric vehicles.
That pressure could be building in Europe as well.
Tesla’s Model 3 was the best-selling electric vehicle in Germany last month, followed by the Model Y, beating Volkswagen’s (VOWG_p.DE) all-electric ID.4. Volkswagen recently raised the price of its entry-level ID.3, putting it at parity with the now-discounted Model 3.
Tesla missed Wall Street estimates for fourth quarter deliveries. Full year growth in deliveries was 40% – also short of Musk’s own forecast of 50%.
Tesla shares under pressure
Reporting by Zhang Yan in Shanghai, Hyunjoo Jin in Seoul, Victoria Waldersee in Berlin; Writing by Kevin Krolicki in Singapore; Editing by Lincoln Feast, Kenneth Maxwell, Mark Potter and Alexander Smith
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BERLIN/BUDAPEST, Dec 13 (Reuters) – German automakers and Asian battery suppliers are getting together in Hungary in a multi-billion-dollar marriage of convenience to drive their electric ambitions.
The companies are flocking to central Europe, where Viktor Orban’s government is defying Western wariness of China and offering generous benefits to host foreign operations and stake Hungary’s claim as a global centre for electric vehicles (EVs).
Investment in the Hungarian auto industry is being dominated by three countries – Germany, a champion carmaker, plus China and South Korea, EV battery leaders way ahead of European rivals.
Companies from those three countries have accounted for 29 out of the 31 cash subsidies handed out by Hungary for major investments in its auto and battery sector over the past decade, according to a Reuters analysis of government data that shows the scale of German, Chinese and Korean convergence there.
“Cathodes, anodes, separators, assembly lines, the full battery supply chain is here,” said Dirk Woelfer of the German-Hungarian Chamber of Commerce in Budapest. “This is a foot in the door to Europe.”
Recipients of such subsidies included the likes of German automakers BMW (BMWG.DE) and Mercedes-Benz (MBGn.DE), and battery makers such as China’s BYD and Korean rival Samsung SDI (006400.KS). The median subsidy level has been 15% of investment.
In total, Hungary has received over 14 billion euros ($15 billion) in foreign direct investment into its battery sector alone in the past six years, according to government figures.
Major investments are broadly classed as those worth over 5-10 million euros, varying with factors such as jobs created.
State incentives and the opportunity for automakers and battery suppliers to work next door to each other is proving a strong pull, according to interviews with about 20 industry players and consultants in Germany, Hungary, China and South Korea.
China’s CATL (300750.SZ), the world’s No. 1 EV battery maker, and Korean battery giants SK Innovation (096770.KS) and Samsung SDI, all told Reuters that the planned proximity to German carmakers was a key factor in their decisions to invest in Hungary, as well as being able to source separators and other components there.
CATL is investing $7.6 billion to build Europe’s largest battery plant in Hungary. This plant and the $2.1 billion BMW factory will both be sited in the city of Debrecen, which is attracting an ecosystem of suppliers, ranging from makers of brakes and battery cathodes to industrial machinery.
Mercedes-Benz is converting its factory in Kecskemet to produce electric cars, while Volkswagen’s (VOWG_p.DE) Audi is making cars and electric motors in Gyor.
Such big business could present a boon for Prime Minister Orban’s government as the country faces its toughest economic environment in more than a decade, with inflation running above 20%, the economy slowing and EU funds in limbo.
Yet the Hungarian EVs project also faces stiff obstacles, according to many of the industry insiders.
One key concern is the huge demands that massive battery plants will place on the electricity grid, which needs to shift away from fossil fuels towards renewables to meet the net-zero emissions targets of much of the auto industry, the people said.
A lack of specialised workers in Hungary to work in battery cell manufacturing could also drag on capacity, they added.
HIPA, the Hungarian Foreign Ministry agency responsible for attracting investments in areas ranging from batteries and cars to logistics, did not respond to Reuters queries about the EV industry.
‘CHINA’S MADE GOOD STEPS’
Hungary’s welcome to Asian battery makers might jar with concerns expressed by Brussels and Berlin about the perils of Europe becoming too dependent on China and other foreign powers, particularly in technologies central to the green transition.
Still, for now, the need to ramp up EV output leaves the European auto industry little choice but to source from Asian players, said Csaba Kilian of Hungary’s automotive association.
“I absolutely agree that European manufacturers should have their own sources … but it’s a competition, and China has made good steps,” he added. “There is a learning curve.”
Europe should have a EV battery manufacturing capacity of 1,200 gigawatt hours (GWh) by 2031 if current plans come to fruition, outstripping expected demand of 875 GWh, Benchmark Mineral Intelligence (BMI) estimates. But of that 1,200 GWh, 44% will be provided by Asian companies with factories in Europe, ahead of homegrown firms on 43% and U.S. pioneer Tesla (TSLA.O) with 13%, according to a Reuters calculation based on BMI data.
The prospects for developing a battery sector in Germany have been set back by record energy there as a result of the loss of Russian gas, according to autos consultants at Boston Consulting Group and Berylls Strategy Advisors.
Hungary offers a comparatively stable energy system bolstered by nuclear energy, as well as high subsidies and Europe’s lowest corporate tax rate of 9%.
The entire battery supply chain has come to the country, said Ilka von Dalwigk, policy manager at the European Battery Alliance, launched by the European Union in 2017 to kick-start a homegrown industry.
“Everything is located there. When we look at the forecast for 2025 and 2030, it looks like it will have one of the largest production capacities in Europe,” she added.
“It might very well be that Hungary is in fact the next big battery production cluster in Europe.”
Asked about concerns about reliance on Asia for technology, an EU official said the bloc – which must approve member state subsidies to investors – had a system in place to cooperate and exchange information on investments from non-EU countries that may affect security.
The European Commission is currently in talks with Hungary over the size of the subsidy the country will offer to CATL for building the Debrecen plant, the official added.
‘SENDING THE WRONG SIGNAL’
For some Western companies, setting up shop in Hungary is a tough decision.
German autos supplier Schaeffler said it was on the verge of setting up its primary electric motor plant in Hungary rather than Germany in August because of the appeal of Hungary’s incentives, but decided on Germany for fear of sending “the wrong signal” to Germans who fear a loss of jobs to overseas.
Other industry players expressed a range of concerns over potential pitfalls for the burgeoning Hungarian auto industry as factories ramped up, including the power grid issue.
Batteries, in particular, are highly energy-intensive parts of EVs to produce, requiring high amounts of power for the drying the materials and machine operation.
Hungary’s sources of energy in 2021 comprised 80% fossil fuels, 14.5% nuclear and 3.6% solar, according to a Reuters calculation of data from the BP Statistical Review of World Energy.
The mix spells trouble for carmakers who will soon need to showcase carbon-free credentials across their supply chains under new German and European legislation.
Hungarian Foreign Minister Peter Szijjarto met senior executives from BMW and auto suppliers including Schaeffler and Knorr-Bremse in Munich last month, ahead of the German carmaker announcing it was beefing up its investment in the country.
Topics discussed included plans to improve logistics infrastructure in Hungary and increasing the amount of renewables energy used for the power grid, according to one of the companies that attended.
When BMW first announced its plan to build its Debrecen plant, in 2018, the government committed to spending around 135 billion forints on improving local infrastructure, according to calculations by the German-Hungarian Chamber of Commerce.
On the battery side, CATL told Reuters it was considering developing solar power with local partners in Hungary.
Despite the risks, Alexander Timmer, a partner at Munich-based consultants Berylls Strategy Advisors who has worked on several autos and battery projects in Hungary, said the country presented an appealing package.
“The combination of cost advantages, state subsidies, and closeness to automakers’ plants makes Hungary increasingly attractive to battery producers, he added.
($1 = 397.54 forints; $1 = 0.9483 euros)
Reporting by Victoria Waldersee in Berlin, Gergely Szakacs in Budapest; Additional reporting by Heekyong Yang, Zhang Yan; Editing by Pravin Char
Our Standards: The Thomson Reuters Trust Principles.
TOKYO/WASHINGTON, Aug 29 (Reuters) – Japan’s Honda Motor Co (7267.T) will build a new $4.4 billion lithium-ion battery plant for electric vehicles in the United States with Korean battery supplier LG Energy Solution Ltd (373220.KS), the two companies said on Monday.
Battery makers are looking to increase production in the U.S. where a shift toward electric vehicles (EV) could increase as the country implements stricter regulation and tightens tax credit eligibility.
The location of the plant has not been finalised, the companies said, but two people briefed on the matter confirmed reports Honda is seriously considering Ohio, where Honda’s main U.S. factory is located.
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The companies aim for annual production capacity of approximately 40 GWh with the batteries supplied exclusively to Honda facilities in North America to power Honda and Acura EV models.
The pair are expected to establish a joint venture before building the plant, with the start of construction planned for early 2023 and mass-production by the end of 2025.
Ohio Governor Mike DeWine said his administration is working with Honda and LG “to ensure that they choose Ohio for this new electric battery plant.” The sources briefed on the matter said an announcement on the location could come in weeks.
The U.S. government has been pushing policies designed to bring more battery and EV manufacturing into the country.
President Joe Biden signed a $430 billion climate, health care and tax bill this month that would render electric vehicles assembled outside North America ineligible for tax credits. read more
The Honda Motor logo is pictured at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha
White House Deputy National Climate Advisor Ali Zaidi praised the Honda LG “massive investment” that he said was catalyzed by climate and infrastructure legislation.
U.S. Energy Secretary Jennifer Granholm said the administration was bringing “back the domestic manufacturing of batteries to provide Americans with good-paying jobs that will power the EV revolution.”
California announced a plan last week requiring all new vehicles sold in the state by 2035 to be either electric or plug-in electric hybrids. read more
The two companies said a combination of strong local electric vehicle production and the timely supply of batteries would put them “in the best position to target the rapidly-growing North American EV market.”
LG Energy Solution, which is mainly engaged in the development of lithium-ion battery materials and next-generation batteries, also supplies EV batteries and has signed joint-venture agreements with General Motors (GM.N), Hyundai Motor Co (005380.KS) and Stellantis (STLA.MI). read more
In July, Panasonic Energy Co, a unit of tech conglomerate Panasonic Holdings Corp (6752.T) and a major Tesla Inc (TSLA.O) supplier, said it had selected Kansas as the site for a new battery plant with investment of up to $4 billion. read more
Earlier this year, Honda laid out a target to roll out 30 EV models globally and produce about 2 million EVs a year by 2030. read more
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Reporting by Satoshi Sugiyama and Heekyong Yang in Seoul and David Shepardson in Washington; Editing by Rashmi Aich Krishna Chandra Eluri, Kirsten Donovan and Chris Reese
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Toyota teams up with Suzuki to crack Indian hybrid market
First new model is compact SUV, people-carrier to follow
Toyota aims to lower costs by making components in India
BIDADI, India, Aug 22 (Reuters) – Toyota is rebooting its strategy for India, doubling down on a bet that emerging markets will learn to love its hybrids, as long as the price is right.
Renowned for its pioneering Prius, the Japanese carmaker has struggled to sell large numbers of its hybrid Camry sedan since its Indian debut in 2013, partly due to a sticker price of more than eight times the annual income of a middle-class family.
This time, Toyota is determined to do it differently with lower-cost hybrids, said four company and industry executives and suppliers who provided previously unreported details about the carmaker’s sourcing, production and pricing strategy.
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Central to the strategy is a drive to cut the cost of full hybrid powertrains by making them in India, where the automaker’s factories are running well below capacity, and to source key materials within the country.
Toyota Motor (7203.T) is also leveraging its cooperation with partner Suzuki Motor (7269.T), majority owner of India’s biggest carmaker Maruti (MRTI.NS), to benefit from its low-cost engineering know-how and mild hybrid technology.
“The hybrid bet is a turning point. It will be a litmus test for Toyota’s future and success in India,” one person with direct knowledge of Toyota’s plans told Reuters.
A full hybrid can be driven for stretches on electric power whereas mild hybrid technology only supplements the combustion engine to help cut emissions. However, mild hybrids have smaller batteries and cost far less.
Toyota’s Indian strategy is at odds with global rivals Volkswagen (VOWG_p.DE), General Motors (GM.N) and India’s Tata Motors (TAMO.NS), which are rushing to roll out pure electric vehicles (EVs), and comes in the face of criticism from investors for sticking with fossil-fuel hybrids.
Hybrids are generally cheaper than EVs as they typically have smaller batteries and are not reliant on charging stations, important factors in markets such as India where customers are price sensitive and charging infrastructure can be patchy.
Toyota declined to share details about cost savings, future product launches, car pricing strategies or production plans for full or mild hybrid models in India.
The world’s biggest automaker told Reuters it wanted more first-time buyers in India to own full hybrids as a first step towards mass electrification, and that it would continue to increase local sourcing and production to be competitive.
LEARNING TO LOVE MILD
Toyota’s first new hybrid to hit India’s roads will be the Urban Cruiser Hyryder, a compact sports-utility vehicle (SUV) which two people with knowledge of the plan said is likely to be priced around $25,000 – less than half the price of the Camry.
That would pit it against popular midsize combustion-engine SUVs made by Hyundai Motor (005380.KS) and Kia Motor (000270.KS) in a fast-growing segment that makes up 18% of car sales in India, the world’s fourth-biggest auto market.
The full hybrid Hyryder, however, will be 31% more fuel efficient than the Hyundai and Kia diesel models, offering an economy of 28 km per litre (65 miles per gallon), a key metric for Indian buyers.
To bring down the cost of the Hyryder, which will be sold by Toyota and Suzuki, it will use a hybrid system originally developed for subcompact cars, or one size smaller, according to a Toyota engineer familiar with hybrid technology.
By combining the hybrid system with a low-cost chassis and some upper body parts from Suzuki, the end result is an SUV on a par with or slightly cheaper than the Prius sedan, which starts at $25,000 in the United States.
“The high-cost complexity of hybrids is hard to overcome, but it’s a good start,” the Toyota source, who was not involved in the Hyryder’s development, said.
Savings have also come from working with Suzuki on designing and developing the SUV, as well as leveraging the scale and pricing power with suppliers of Maruti, which produced eight of the 10 best-selling models in India in 2021.
Even so, there is a cost differential of $3,400 between Toyota’s full hybrid and its comparable gasoline car in India, said another source, higher than the typical differential of about $2,000 for Toyota in most countries.
To boost sales in India’s price-sensitive market, Toyota will also sell Hyryders with a mild hybrid powertrain supplied by Suzuki, a significant departure for Toyota which has long championed full hybrids.
The shift is a recognition that Toyota has been unable to bring down the cost of full hybrids to the point where they can always compete on price in markets such as India, the people familiar with Toyota’s planning said.
It also shows how Toyota is altering its strategy for different markets, depending on what buyers want and are willing to pay.
“As we come down the price points … we hope to increase our numbers as well as our market share,” Vikram Kirloskar, vice chairman of Toyota Kirloskar Motor, the Japanese company’s Indian unit, told Reuters.
Toyota’s next hybrid for India will be a multi-purpose vehicle, or people-carrier, expected later this year or early in 2023, two sources said.
BUILDING IN BIDADI
Another factor affecting the Hyryder’s price is taxation. India levies taxes of 43% on hybrids – on a par with gasoline or diesel SUVs and far higher than the 5% tax on EVs.
Toyota is lobbying to get the taxes reduced, sources said. The company said it wants New Delhi to provide support, including taxation, to all green technologies that help India achieve its goal of reducing fossil fuel and carbon emissions.
So far, the government has not shown any interest in extending its fiscal support beyond EVs.
Making hybrid powertrains in India aligns Toyota with Prime Minister Narendra Modi’s drive to boost local manufacturing, especially at a time when major car companies such as Ford Motor (F.N) have left the country. read more
It also comes as India tightens fuel efficiency and emission targets for carmakers. Selling hybrids will help Toyota meet its regulatory requirements as credits they earn will go towards offsetting the production of fossil-fuel vehicles.
At the Toyota Kirloskar Auto Parts factory in Bidadi, an industrial town near Bengaluru in southern India, the Japanese automaker’s new Indian strategy is already in motion.
A joint venture between Toyota, its parts affiliate Aisin Seiki Co (7259.T) and India’s Kirloskar Systems, the plant is manufacturing E-Drives for the Toyota Hybrid System.
The E-Drive ensures seamless switching between the engine and electric motor, and shifting the manufacture of one of the hybrid system’s four key components to India is a major move.
Toyota sees the Bidadi factory as a starting point for building a local supply chain for the EVs it will eventually bring to India.
“We now have the core technology, whether it’s an electric vehicle or a hybrid,” Kirloskar said.
‘IT’S A HUGE BET’
The plant can make 135,000 E-Drives a year on one assembly line and could raise that to over 400,000 by adding two more.
About 55% of raw materials by value for the E-Drives come from India, two sources said. Capital equipment, such as tools and dies, are also made there, though rare earth magnets for the motors and some other components are imported.
The cost savings on the made-in-India E-Drives are expected to be in the “double-digits” in percentage terms compared with imported systems, one source said.
Toyota will also export them back to Japan for hybrid cars built there, as well as to countries in Southeast Asia.
“India is one of the lowest cost bases for these parts. We are competitive on this,” Kirloskar said, adding that he expected about 40% to 50% to be exported, though that could change depending on local demand.
Of the three other main hybrid components, Toyota already makes engines in India but the 1.8 kilowatt-hour (kWh) lithium-ion batteries and power control units will be imported for now.
Toyota is making the Hyryder at its under-used and revamped plant in Bidadi, which has an annual capacity of 200,000 cars.
More than 50% of Hyryder pre-orders are for the full hybrid, though people aware of Toyota’s production plans say this could settle at 30% to 40% with the cheaper, mild hybrid becoming more popular in India – where most cars sell for under $15,000.
“Once numbers pick up, the cost will come to a point where hybrids will become mainstream. This will lay the ground for an eventual switch to fully electric or fuel cell vehicles,” said one person familiar with Toyota’s plans.
“It’s a huge bet but we know electrification is the future.”
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Reporting by Aditi Shah in Bidadi, India, and Norihiko Shirouzu in Beijing; Editing by David Clarke
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SEOUL, July 14 (Reuters) – Hyundai Motor Co (005380.KS) on Thursday launched its first electric sedan, Ioniq 6, which the South Korean automaker is betting will help it grab a bigger share of the electric vehicle (EV) market dominated by Tesla Inc .
The Ioniq 6 is one of more than 31 electric models that Hyundai Motor Group – including Hyundai Motor, its sister company Kia Corp (000270.KS) and premium brand Genesis – plans to introduce through 2030 to secure a projected 12% of the global EV market.
Hyundai’s sedan will expand its EV range beyond its current crossovers and SUVs to compete head-to-head against Tesla’s best-selling Model 3 sedan.
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Hyundai and Kia were already the second-biggest EV shippers globally excluding China in January to May this year, with a combined 13.5% market share that was second only to Tesla at 22%, according to industry tracker SNE Research.
The Ioniq 6 will be priced in the range of 55 million won ($41,949.51) to 65 million won for the South Korean market.
“The Ioniq 6 will be able to compete with Tesla in the volume EV sedan sector, considering its competitive pricing and long driving range,” said Lee Jae-il, an analyst at Eugene Investment & Securities.
The Ioniq 6 could leverage its pricing in the EV sedan market because Tesla has increased prices several times, he added.
The Hyundai electric sedan will have a driving range of about 610 kilometres (380 miles), around 30% more than the Ioniq 5 crossover, Hyundai said.
“We are using the same (battery) cell chemistry but … we maximised the amount of batteries per each pack, enhancing energy density significantly,” said Kim Yong Wha, an executive vice president at Hyundai.
It will come in two battery pack options – 53-kilowatt per hour (kWh) and 77.4 kWh – and will begin production at its Asan plant in South Korea later this year, Hyundai said.
The Ioniq 6 will be available in South Korea this year and the U.S. market launch is expected in the first quarter of next year, it added.
Hyundai said the Ioniq 6 launched this year would source batteries from SK Innovation’s (096770.KS) SK On and LG Energy Solution’s (373220.KS) batteries will be used from next year.
The launch comes after Hyundai announced its plans to build dedicated EV plants both at home and the United States, where the Ioniq 5 and Kia’s EV 6 SUV together became the second-best selling EVs after Tesla cars and ahead of Ford Motor Co’s (000270.KS) Mustang Mach-E.
($1 = 1,311.1000 won)
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Reporting by Heekyong Yang; Editing by Jamie Freed
Our Standards: The Thomson Reuters Trust Principles.
2023 Toyota bZ4X all-electric SUV is displayed during the 2021 LA Auto Show in Los Angeles, California, U.S. November, 17, 2021. REUTERS/Mike Blake
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TOKYO, June 23 (Reuters) – Toyota Motor Corp (7203.T) said on Thursday it would recall 2,700 of its first mass-produced electric vehicles (EVs) for the global market because of a riskthe wheels could come loose.
The world’s largest automaker by sales submitted the recall of the bZ4X SUVs to Japan’s transportation ministry. Of the 2,700 vehicles, 2,200 were earmarked for Europe, 260 for the United States, 20 for Canada and 110 for Japan, the company said.
Subaru Corp (7270.T) also said Thursday it was globally recalling about 2,600 units of the Solterra, its first all-electric vehicle jointly developed with Toyota, for the same reason.
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Japan’s safety regulator said sharp turns and sudden braking could cause a hub bolt to loosen, raising the risk of a wheel coming off the vehicle. It said it was not aware of any accidents being caused by the defect.
The regulator advised drivers to stop using the vehicle until a more “permanent” repair measure was in place.
All of the cars recalled in Japan had not yet been delivered to customers as they were meant for test drives and display, spokespeople of the automakers said.
“We sincerely apologise for any inconvenience this causes you,” Toyota said on its website. “We would have repaired it as soon as possible, but we are investigating the details.”
A Toyota spokesperson said not every model was subjected to the recall but declined to say how many it has built overall.
For Subaru, most of the vehicles were for dealers and none were delivered to customers in the U.S., a Subaru spokesperson said.
The recall comes less than two months after Toyota, a relative latecomer to the EV market, rolled out the electric SUV, bZ4X, to the domestic market, albeit as a lease-only option.
Toyota’s unit that offers the leases, KINTO, has cancelled promotional test-drive events planned in three Japanese cities for safety measures.
Toyota has been criticised by some investors and environmental organisations for not acting quickly enough to phase out gasoline-powered cars and embrace EVs instead.
The company has repeatedly pushed back against the criticism, arguing the necessity to offer a variety of powertrains to suit different markets and customers.
Gasoline-electric hybrid models remain far more popular in Toyota’s home market than EVs, which accounted for just 1% of the passenger cars sold in Japan last year, based on industry data.
Still, the market is growing fast and foreign automakers including Tesla Inc (TSLA.O) are making visible inroads on the streets of cities such as Tokyo.
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Reporting by Satoshi Sugiyama and Maki Shiraki
Editing by Jane Merriman and Bernadette Baum
Our Standards: The Thomson Reuters Trust Principles.
SEOUL, May 22 (Reuters) – Hyundai Motor Group said on Sunday it would invest an additional $5 billion in the United States by 2025 to strengthen collaboration with U.S. firms in advanced technology.
The investments, announced during a visit to Seoul by President Joe Biden, are for robotics, urban air mobility, autonomous driving and artificial intelligence, the group said.
Hyundai Motor Group, which houses Hyundai Motor Co (005380.KS) and Kia Corp (000270.KS), on Friday announced plans to invest $5.5 billion in Georgia to build electric vehicle (EV) and battery facilities. read more
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Hyundai’s new EV and battery manufacturing facilities will be based in the southern “right to work” state, where labour unions are less prevalent and cannot require workers to join.
Biden, a Democrat, has described himself as the most pro-union president in history. But the deal, announced by Georgia’s Republican governor, showed the compromises the president may have to make as he woos investment overseas.
“Hyundai and any company investing in the United States would benefit greatly from entering into partnerships with some of the most highly skilled, dedicated, and engaged workers in the world, anywhere you can find; and that is American union members,” Biden said.
“Every venture to manufacture electric vehicles and electric vehicle batteries would be made stronger by a collective bargaining relationship with our unions.”
Hyundai Motor Group Executive Chair Euisun Chung did not comment on U.S. unions.
The new investment brings its planned U.S. total through 2025 to about $10 billion, above the $7.4 billion it announced last year.
The world’s third-biggest automaker by vehicles sales did not say where in the United States the additional $5 billion would be invested.
The auto group said on Wednesday it would invest 21 trillion won ($16 billion) through 2030 to expand its EV business in South Korea. read more
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Reporting by Trevor Hunnicutt, Heekyong Yang and Jack Kim; Editing by Bradley Perrett and Lisa Shumaker
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May 10 (Reuters) – Tesla Inc (TSLA.O) is open to buying a mining company if producing its own supply of electric vehicle (EV) metals would speed up worldwide adoption of clean energy technologies, Chief Executive Officer Elon Musk said on Tuesday.
Concern is mounting across the EV industry that there may not be enough supply of lithium, nickel, copper and other metals to match demand later this decade, fueling questions about whether Tesla would consider jumping into the mining sector.
“It’s not out of the question,” Musk told the FT Future of the Car 2022 conference. “We will address whatever limitations are on accelerating the world’s transition to sustainable energy. It’s not that we wish to buy mining companies, but if that’s the only way to accelerate the transition, then we will do that.”
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While the auto giant has EV metals contracts with suppliers across the globe, its goal to produce 20 million vehicles annually by 2030 – what Musk called an “aspiration, not a promise” – will require vastly more supplies of metals. Tesla produced just under 1 million EVs last year.
Other automakers and executives including Carlos Tavares, the CEO of Tesla rival Stellantis NV (STLA.MI), have warned the auto industry faces a metals supply shortage.
Tesla has no experience with the time-intensive and laborious task of building and operating a mine, so industry analysts have advised the automaker to focus on buying an existing operator.
Many in the mining industry have noted that buying an existing metals producer would cost far less than the $43 billion Musk offered to personally buy social media network Twitter Inc (TWTR.N)earlier this year.
Tesla has lithium supply deals with Ganfeng Lithium Co (002460.SZ), Livent Corp (LTHM.N)and Albemarle Corp(ALB.N), among others. The company’s lithium supply deal with Piedmont Lithium Inc (PLL.O) was put on hold last year.
Tesla has nickel supply deals with ValeSA (VALE3.SA) and Talon Metals Corp(TLO.TO).
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Reporting by Ernest Scheyder; additional reporting by Eva Matthews, Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.
