The Suzuki Jimny may get a literal power boost as a fully-electric model by 2030 now that Suzuki is investing billions into electrification. After a relatively long period of uncertainty regarding its stance on EVs, Suzuki is earmarking nearly $35 billion to produce a lineup of five EV models that will go on sale in Europe by the end of the decade, and one of them could be a Jimny EV.
Suzuki’s multi-billion jump into EVs will expand across markets in Japan, Europe and India, according to Reuters, but its debut fully-electric models will first be introduced in its home country of Japan in 2023. Europe and India are set to follow in 2024, and within the following six years, Suzuki expects to have between five to six EV models available in these markets.
Photo: Anindito Mukherjee (Getty Images)
The news comes not long after the debut of Suzuki’s EV concept SUV, called the eVX, which was unveiled in India at the Auto Expo 2023. The eVX builds off an actual production model that Suzuki says will be introduced in 2025, although it’s unclear where it’ll be sold.
The company is now following up the debut of the eVX concept with plans to make a new batch of EVs. One of these looks a lot like a Jimny, which tracks given the Jimny’s popularity around the world. It’s also a good idea for Suzuki to make a Jimny EV sooner rather than later, because a Chinese Jimny EV from SAIC-GM-Wuling looms on the horizon. It’s hard to tell right now whether the Jimny EV that Suzuki teased is a five- or three-door model, though the addition of a battery could require the extra space of the bigger Jimny 5-Door.
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Then again, the Japanese carmaker’s plan is apparently all about going small and light, so it’s possible that Suzuki will find a way to stuff the battery into the ladder frame of the smaller combustion-powered Jimny. The three-door, that is — or two-door as most of us in the U.S. would refer to it.
Photo: Anindito Mukherjee (Getty Images)
And just like every other Jimnymodel we’ve lusted after since the return of the little off-roader, the U.S. is not likely to get the Jimny EV. I suppose it’s for the best, because, really, who wants a capable-yet-adorable fully-electric SUV from Suzuki when we’ve got all these Hummer EVs to go around?
Everything from the economy, to inflation, to the Russian invasion of Ukraine dealt body blow after body blow to the electric carmaker—and the rest of the tech and auto industry at large. However, the recent actions of company CEO Elon Musk, following his reluctant purchase of Twitter, have only dragged the beleaguered Tesla further into the deep trenches of a financial crisis. In fact, Tesla has lost nearly 70 percent of its market cap over the year to date.
It’s a whiplash shift from just a year ago when the company, valued at an eye-popping $1 trillion, seemed like it could do no wrong. Some are questioning Musk’s leadership, while others are going further—speculating that this might just be the beginning of the end of Tesla.
There’s no denying the impact that the company has had in both producing and selling electric cars. After all, it did something that once seemed impossible: convincing the public that EVs are pretty damn cool, actually. Now legacy automakers are playing catchup to get customers to buy their own takes on electric cars.
Tesla revolutionized the way the world sees and drives EVs—but with its back against the wall and the financial situation looking more and more bleak by the tweet, we might very well soon find ourselves in a situation where the biggest name in the game has gone belly up.
Let’s be clear: there’s a fairly low chance of that happening… but what if it does?
How to Make (and Burst) an EV Bubble
To understand the impact Tesla’s disappearance would have on the future of EVs, it’s important to wrap our minds around how exactly we got here.
“I give Elon Musk a lot of credit. He almost single-handedly made electric vehicles glamorous and sexy,” Ragunathan “Raj” Rajkumar, a professor of electrical and computer engineering and autonomous vehicle researcher at Carnegie Mellon University, told The Daily Beast. “People associated them with the person who was transforming the automotive industry and doing the right thing for the planet.”
However, this was a double-edged sword. Musk hyped Tesla up through lofty—if a bit unrealistic—promises and shitposts on Twitter. He cultivated an army of Elon stans willing to go to war for him online to defend his companies from the smallest of slights. Meanwhile, the cars were finally selling well. All this resulted in the perfect mixture to fuel the rise of Tesla’s stock into the stratosphere like so many SpaceX rockets.
“If Tesla collapses and they’re completely out of business, I believe that there’ll be dancing in the streets at every giant [automaker] on the planet.”
— Sandy Munro
But the value was always tenuous at best. It’s not like other automakers weren’t ever going to make electric cars. So Tesla’s market cap became a bubble of epic proportions.
One of the people who held a needle was Musk himself—which he wound up popping with the acquisition of his favorite social media platform, Twitter.
“It was just complete baloney,” Rajkumar added. “At the end of the day, business has to be a business. Sooner or later, things that go up have to come down, and that’s what we’re seeing, and will continue to see.”
There’s also fundamental economic factors. Demand is low across the board due to a flailing economy. Plus the market looks vastly different than it did even a year ago. Tesla’s not the only horse in the race anymore. The EV industry is much bigger now, and with the added competition, it was really only a matter of time that Musk’s company started feeling the pressure.
That sink in feeling: Elon Musk’s takeover of Twitter unintentionally caused further turmoil and instability for Tesla’s finances.
Getty
A World Without Tesla
Given the profound impact of Tesla on the automotive industry and consumer habits, there’s really no question that it would have a profoundly negative impact on the future of EVs.
“If Tesla collapses and they’re completely out of business, I believe that there’ll be dancing in the streets at every giant [automaker] on the planet,” Sandy Munro, an independent automotive engineer, consultant, and industry expert, told The Daily Beast.
Munro’s known for his famous teardown reports providing incredibly detailed analysis of different vehicles. His glowing review of Tesla’s Model Y in 2020 resulted in him not only being bullish on the future of the company but also electric vehicles in general. A few years ago, he predicted that EVs would make up more than 50 percent of total vehicles on the market by 2030. Due to Tesla’s success, he’s updated that prediction to 2028.
However, Munro admits that, if Tesla were ever to go bankrupt, neither prediction would likely ever happen and he would “definitely walk away from EVs.”
That’s because, to him, the fall of Tesla would put out the proverbial fire underneath the asses of every legacy automaker to pivot to new, emerging technologies—and instead, incentivize them to go back to old ones. No longer would there be the push to build new plants and devote so much of their resources into R&D for batteries, charging stations, and electric powertrains. Even regulators would have much less incentive to make the change in the nation’s transportation and energy infrastructure.
Overall, we’d see a return to our gas-guzzling, greenhouse gas emitting normal. “If Tesla goes out of business, you watch how fast that Keystone pipeline goes through,” Munro added.
Rajkumar’s assessment isn’t quite as dire. He believes that the technologies and innovations that Tesla has championed will ultimately continue. After all, consumers already want EVs more than ever—and that number is only expected to grow. Car companies see this too, and are ready to capitalize on it.
“The global automotive industry has been emphasizing EVs now, and many companies are publicly announcing that they will switch to a completely electric line of products. I don’t think it’s going to stop anytime soon.,” Rajkumar said. However, he concedes that it’s not clear if many of the goals outlined by these automakers are realistic due to an inadequate charging infrastructure and a slow rate of EV adoption by consumers overall.
The only real winner that would emerge from the death of Tesla would be China. The country is already making a concerted effort towards electrifying its transportation infrastructure, with goals to have 40 percent of all vehicles sold domestically be EVs by 2030, and have enough charging stations to service more than 20 million vehicles.
Munro said that this might cause a kind of geopolitical tortoise-and-hare situation where China plays catchup and soon advances much more exponentially than the Western world, eventually eclipsing the sleeping U.S. with technologies like EVs that will be vital for our collective future.
“China will survive,” Munro explained. He added that we might get to the point where the U.S. has relatively little EVs because we were so focused on short term gains.
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Employees work on the assembly line of electric vehicles at a factory of Dayun Automobile Co., Ltd on Dec. 8, 2022 in Yuncheng, Shanxi Province of China.
Getty
Tesla Will Die Another Day
The future might seem a bit uncertain for Tesla—but it will likely survive its current downturn. Sure, it might not reach the $1 trillion zenith it hit last year (at least, for a while) but it will probably see this through.
“There’s no way Tesla is going to go belly up,” Munro said. “It’s just not going to happen.” He added that there are two primary factors why the company will keep driving along.
The first is actually Musk. Though many might be bothered by his antics on Twitter (Tesla stock investors chief among them), there’s no denying that he helped revolutionize and championsome of the very industries that the world will be relying on the most in the future: electric cars and space travel. If he can pull himself away from the social media albatross that he’s wrapped around his neck, he might be able to help usher Tesla through a rapidly crowding EV market and beyond 2030.
The second, said Munro, is children. Yes, children. He believes that kids—more than any other market indicator, stock trend, or McKinsey consultant—accurately point the way for the future of things like automobiles and, therefore, Tesla.
“If you talk to kids, all of a sudden you understand what they don’t like,” he said. “‘I don’t like the smell of gasoline. I don’t like the black smoke coming out of the car. I want to do more for the environment.’ That’s why I don’t think Tesla is going away.”
Toyota says it still isn’t going to really boost production of its first mass-market electric vehicle for a few more years, Faraday Future is slashing salaries because the start-up EV maker is running out of cash, and Mercedes-Benz is the latest manufacturer to quit the Russian market. All that and more in The Morning Shift for Wednesday, October 26, 2022.
1st Gear: Toyota Needs Time to Boost bZ4x Production
Toyota is reportedly considering a huge jump in bZ4X production, but not before 2025. It’s said to be part of a broader strategy rethink from the Japanese company.
The automaker is mulling over the decision to increase production of its first mass-market EV by either six or 12 times its current monthly output. Right now that stands at about 1,000 cars per month. But, this isn’t happening overnight. The move would happen in 2025 if components (including semiconductors) can be secured in time. From Reuters:
The car is produced at Toyota Motor Corp’s Motomachi plant near its headquarters on a shared assembly line with gasoline cars and hybrids. Both the current and potential production numbers include those of the Subaru Corp Solterra, which is made on the same platform.
The increase would see Toyota add production at another plant near its headquarters, the Takaoka factory, said the three people, who spoke on condition of anonymity because the information was not public.
[…]
The potential ramp-up in production comes as the automaker has faced criticism for not moving faster to embrace all-electric cars and pushing hybrid technology instead. It has launched a review of its EV strategy, Reuters reported this week.
As part of that review – which could result in a more aggressive roadmap for future electric vehicles based on technologies that promise to lower cost and improve performance – it has also suspended development work on some of the 30 new EV models it announced last year and planned to launch by 2030, Reuters reported.
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Toyota recently restarted bZ4X production after a couple of recalls hampered it. At the peak of the planned production increase, Toyota would be producing over 190,000 EVs per years.
2nd Gear: Faraday’s Bleak Future
Faraday Future is reportedly slashing employee salaries by 25 percent starting next month. The move is being done in an effort to save some cash (since it is nearly out) while the company looks for new capital in order to finally launch the FF91.
In an email sent to employees last week, Faraday said the salary cuts expect to last from November 1st through the end of the year. Earlier this month, the company also laid off a few dozen employees. From Bloomberg:
Faraday has seen its cash reserves dwindle rapidly. It recently reported having $39 million in cash as of Sept. 21, down from around $47 million at the end of August.
The company said in the emailed memo, which was viewed by Bloomberg News, that employees will be granted restricted stock units, or RSUs, equivalent to the amount being cut from their salary and which will vest in December. Faraday also offered employees the option of taking a larger salary cut in exchange for more valuable RSUs, though it noted that any RSUs granted will be forfeited if the employee is terminated.
Faraday delayed the launch of its first vehicle until at least 2023. Things are not looking too hot for the Los Angeles-based company right now, though they never really have been.
3rd Gear: Mercedes-Benz Leaves Russia
Add Mercedes-Benz to a growing list of automakers who are pulling out of the Russian market. The company is reportedly selling shares in its industrial and financial service subsidiaries to a Russian investor: car dealer chain Avtodom. From Reuters:
Mercedes Chief Financial Officer Harald Wilhelm, while presenting third-quarter results, said the transaction was not expected to give rise to any further significant effects when it comes to the group’s profitability and financial position beyond those reported in previous quarters.
“Final completion of the transaction is subject to the authority’s approval and the implementation of contractually agreed conditions,” he added.
[…]
“The main priorities in agreeing to the terms of the transaction were to maximize the fulfillment of obligations to clients from Russia both in terms of after-sales services and financial services, as well as preserving jobs of employees at the Russian divisions of the company,” Natalia Koroleva, CEO of Mercedes-Benz Russia, said in a statement.
Mercedes suspended manufacturing in Russia in early March.
Mercedes now joins Volkswagen, Toyota, Nissan and Renault in leaving the Russian market. Other companies like Mazda and Kia are also considering moves out of the country.
4th Gear: $1 Billion for Busses
The U.S. Environmental Protection Agency has announced that it is allocating nearly $1 billion for about 400 school districts around the country to buy zero or low-emission school busses.
The funding will lead to the purchase of 2,463 buses. Over 95 percent of those will be electric, and a “very small number” will be powered by compressed natural gas. Another 100 will be propane-fueled buses. From The Detroit News:
School districts to receive funding were chosen through a lottery system and 99% of the projects are in districts serving low-income, rural or Indigenous students. EPA initially planned to allocate $500 million in the first round of funding, but the agency expanded it to nearly $1 billion after receiving “overwhelming demand” from districts.
Millions of children ride the bus to and from school every day, said EPA Administrator Michael Regan. “It’s a quintessential part of being a kid in America.”
“But we all know that traditional vehicles that rely on internal combustion engines emit toxic pollutants in the air,” he added. Thanks to this funding, “we are forever transforming school bus fleets across the United States.”
Right now in the U.S., over 90 percent of all school buses run on diesel. The outlet reports that the $1 billion allocation is part of a more than $5 billion plan for zero and low-emission school buses though the Infrastructure Investment and Jobs Act. A further $1 billion will be available next year.
School districts that applied and received funding will put in purchase orders with manufacturers, which will be paid directly by EPA, [Karl] Simon [director of the transportation and climate division of the EPA] said. That must be finished by April.
5th Gear: Hyundai’s EV Expansion Starts in Georgia
Hyundai broke ground Tuesday on its $5.54 billion electric vehicle and battery manufacturing project that will build vehicles for Hyundai, Kia, and Genesis.
The factory — called the Metaplant — is set to build up to six different models and has the capacity to produce as many as 500,000 vehicles per year on its 2,800-acres of land located about 30 miles northwest of Savannah, Georgia. From Automotive News:
“We are making the current investment to get to 300,000 vehicles in phase one, and then 500,000,” Munoz said at a media roundtable after the groundbreaking ceremony.
[…]
Munoz did not say which models the Metaplant will produce, but a new three-row Hyundai EV crossover called the Ioniq 7 is expected to be the first. Munoz also said Hyundai is still examining what models it will export from the new plant.
The project also will see the construction of an adjacent battery plant that will be built through a joint venture with a battery supplier that Hyundai has not identified yet.
A new supply chain also will be established to support the EV factory, Munoz said.
Because of this move, Hyundai should be back in a position to for its buyers to get federal EV tax credits under President Biden’s Inflation Reduction Act.
Right now, Hyundai/Kia/Genesis EVs aren’t eligible for the credit because they are imported from Korea, and that doesn’t jive with the criteria laid out in the IRA.
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New York is following in California’s tire treads, making drastic moves to cut greenhouse gas emissions. The Empire State will entirely ban the purchase of new petroleum-powered cars by 2035.
“With sustained state and federal investments, our actions are incentivizing New Yorkers, local governments, and businesses to make the transition to electric vehicles. We’re driving New York’s transition to clean transportation forward, and today’s announcement will benefit our climate and the health of our communities for generations to come,” said Governor Kathy Hochul in a statement outlining the new policy directive.
The regulatory step will take New York closer to its statewide goal of 85% emissions reductions by 2050 from 1990 level.
Transportation accounted for 28% of New York’s total greenhouse gas emissions, according to the 2021 statewide report—pumping 106.92 million metric tons of carbon dioxide and other gases into the atmosphere in a single year. Transitioning to electric vehicles should significantly reduce those emissions, assuming the power grid transitions away from fossil fuels as well.
Hochul pulled up to a press conference in White Plains in a Chevy Bolt on Thursday morning, where she laid out the plans for a future gas-free New York. The regulation will go into effect in phases.
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First, by 2026, 35% of all new light-duty vehicles sold in the state will be required to be electric. Then, by 2030, that percentage will rise to 68%, ramping up to 100% by 2035. New pollution standards for gas-powered vehicles manufactured from 2026 to 2034 are also set accompany the EV mandates.
Additional related policies include moving to an all-electric school bus fleet across New York by 2035 and increased financial support for both individuals and municipalities looking to purchase EVs. The state is adding $10 million to the Drive Clean Rebate program, which offers an incentive of up to $2,000 (on top of the federal tax rebate of up to $7,500) to incentivize and assist people in purchasing electric cars. New York has already issued more than 78,000 rebates statewide, according to Hochul.
“You have no more excuses” to not buy an EV, Hochul said. “We are not heading down that dead-end street [of gas vehicles] any longer.” Although the upfront costs of purchasing an EV are still relatively high, that cost is dropping, and some assessments have found that, in the long-term, electric cars are cheaper to maintain and own than their gas counterparts.
California enacted a similar policy in August, but Hochul wasn’t content to let the West Coast take all the credit. The Governor pointed out that she signed the gas-ban goal in 2021. But she “had to wait for California to take a step because there’s some federal requirement that California had to go first—that’s the only time we’re letting them go first,” she added.
On top of the CO2 reductions, switching from gas-powered vehicles to EVs could have sweeping public health benefits across the state. “Westchester is a non-attainment zone for the Clean Air Act,” said State Senator Pete Harckham, in Thursday’s press conference—highlighting the local benefits of curbing combustion vehicles. Air pollution is deadly and debilitating. And in New York, car exhaust is one of the largest contributors.
New York’s announcement is exciting, at a time when we desperately need gas-powered cars and fossil fuel reliance to die out. Unfortunately, personal EVs aren’t necessarily a perfect fix. There are unresolved questions of how the present supply of necessary materials like lithium, copper, and rare earth metals will be able to meet the growing demand. And all that mining comes with its own environmental costs, even if they’re less existentially pressing than climate change itself. Unfortunately, Hochul’s announcement didn’t address additional state funding for public transit expansion.
There are 20 electric vehicles that will qualify for the $7,500 EV tax credit through the end of the year, the U.S. and Mexico are ending a labor probe at a Mexican Stellantis plant, and Warren Buffet doesn’t seem to0 worried about the car market. All that and more in The Morning Shift for Wednesday (my dudes), August 17, 2022.
1st Gear: The 20 Qualifiers
President Biden signed the sweeping tax, climate and health care bill on Tuesday, and the administration now says about 20 models will still qualify for the up to $7,500 EV tax credit through the end of 2022.
That being said, the law immediately ends credits for almost three quarters of the 72 models that were previously eligible. That’s because, in order to qualify, the EVs must now be assembled in North America.
The number of eligible vehicles is likely to change come January 1, 2023, when new restrictions on battery and mineral sources and pricing caps come into play. The Alliance for Automotive Innovation, an industry trade group, says it’ll make all or nearly all EVs ineligible. From Automotive News:
The automaker group said it will work with the administration “as they issue critical guidance and new regulations – so the EV tax credit is as available and beneficial to consumers as possible.”
Currently eligible vehicles are 2022 model year EV or plug-in hybrid electric versions of the Audi Q5; BMW X5 and 3-Series Plug-in; Ford Mach-E, F-Series, Escape PHEV and Transit Van; Chrysler Pacifica PHEV, Jeep Grand Cherokee PHEV and Wrangler PHEV; Lincoln Aviator PHEV and Corsair Plug-in; Lucid Air; Nissan Leaf; Volvo S60; and Rivian, R1S and R1T. The 2023 Nissan Leaf, BMW 3-Series and Mercedes EQS are also eligible.
Some models are built both in North America and overseas and consumers should check vehicle identification numbers to ensure eligibility, the Treasury Department said.
…
Buyers can still qualify if they had binding written contracts before Biden’s signing and some automakers had been urging customers to make portions of deposits non-refundable to qualify.
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The law also makes General Motors and Tesla vehicles eligible for tax credits starting on January 1. They had previously lost the credits after hitting the old 200,000-vehicle per manufacturer cap. However, it’s not clear if any of the vehicles they make would qualify under the new restrictions.
2nd Gear: U.S. and Mexican Labor Probe Ends
The U.S. and Mexican governments have resolved a labor dispute with a Mexican Stellantis manufacturing plant.
The agreement at Teksid Hierro de Mexico is the fourth labor probe to end under the 2020 United States-Mexico-Canada Agreement (USMCA). It was one of Mexico’s longest-running labor conflicts.
U.S. labor officials said workers at the plant, which makes parts for heavy vheicles including Cummins, Volvo and Mack, were previously denied their rights to choose their union and do collective bargaining. From Reuters:
Reuters reported last week that Teksid, which employs some 1,500 people, expected to close the case without going to a dispute panel after the company recognized an independent union, a move workers attributed to U.S. pressure under the USMCA.
Workers since 2014 had fought to establish a union known as The Miners at the Teksid plant in the northern state of Coahuila, and accused the company of colluding with a powerful rival union to block their efforts.
…
The USMCA resolution “will help end eight years of rights violations against Teksid workers,” U.S. Labor Secretary Marty Walsh said in a statement.
As part of the agreement, the unit of Italian-French carmaker Stellantis in July agreed to re-hire, with back pay, 36 workers who said they had been fired in retaliation for supporting the union, which also represents metalworkers and miners.
Stellantis says it is “diligently cooperating” with governmental officials during the process. The company says it respects collective bargaining rights and will comply with local laws.
3rd Gear: Buffett Ain’t Worried
Warren Buffett doesn’t seem to think the good times are over for car dealers just yet. New filings show Berkshire Hathaway tripled its stake an Ally Financial, a long-time automotive financial company, to $1 billion in the second quarter of 2022.
The world’s most famous investor seems to believe lending margins will remain strong and default rates will stay low. From Financial Times:
In the two pandemic years, shares in Ally rallied 57 per cent. The stock was buoyed by consumers flush with cash flocking to buy used vehicles. Auto manufacturers were unable to meet demand for new cars.
Ally shares, have fallen by a quarter so far in 2022. Wall Street is worried about the finances of the US consumer as well as a normalisation in the auto market. Ally says those worries remain overstated, a view that now has the implicit endorsement of a legendary investor.
Between the end of the 2019 and the start of 2022, the Manheim Used Vehicle Value Index increased by a vertiginous 70 per cent. Higher used car prices supported bigger loans at a time when there were virtually no concerns about immediate credit losses.
Net interest revenue increased substantially in the current quarter, compared with 2021. However, Ally was forced to accrue credit loss provisions so big that pre-tax income fell 40 per cent year on year. The company insists those provisions are simply a natural reversion to ordinary levels.
The move is a vote of confidence not only in auto loans, but in consumer spending power as a whole. If Warren’s not worried about our ability to confidently spend money, why should we be?
4th Gear: BMW’s Battery Switch Up
China’s EVE Energy CO Ltd is going to start supplying BMW with large cylindrical batteries for the company’s electric cars in Europe. It’s reported BMW is following in Tesla’s footsteps by adopting the new technology. Vehicles with the new batteries are due to hit the market in 2025.
Earlier this year, Tesla starting manufacturing its new large-format 4680 cylindrical battery. 4680 means 46 millimeters in diameter and 80 millimeters in length. Tesla says it expects the new battery to lower production costs and improve range compared to the current-generation 2170 cylindrical batteries.
EVE’s batteries are expected to be a similar size to Teslas. From Reuters:
EVE, a supplier to BMW in China, did not directly address Reuters queries when asked for comment. BMW said it plans to release some battery-related news in early September but declined further comment.
The shift by BMW, which currently uses prismatic batteries, underscores growing momentum for larger-format cylindrical batteries. Prismatic batteries, which are rectangular in shape, have become the most common form of auto battery in the past two years as they can be more densely packed, saving on costs. But proponents of cylindrical batteries argue the newer larger format cells have become more cost-effective due to improvements in energy density.
China’s CATL (300750.SZ), the world’s largest battery maker, is also due to start supplying cylindrical batteries to BMW from 2025.
Expectations are high that these batteries will also be large-sized cells. CATL did not respond to a request for comment on planned dimensions.
Right now, it’s not clear exactly how many batteries BMW plans to get from EVE and CATL.
5th Gear: Out Of Power
Toyota has suspended operations at one of its plants in China after local authorities issued an order to conserve electricity. The manufacturing facility will be shuttered until Saturday, according to a spokesperson for the company.
Sichuan province, where the plant is located, is rationing industrial electricity consumption during its worst heatwave in 60 years. It’s caused producers of fertilizers, lithium and other metals to suspend plant operations or curb output. From Reuters:
Industrial users across 19 out of 21 cities in the province were ordered to suspend production from Aug. 15 until Aug. 20 to prioritise residential power supply, according to a notice issued on Sunday by the Department of Economy and Information Technology of Sichuan.
…
“We’re monitoring the situation every day and following the guidance from the government,” the Toyota spokesperson said.
Toyota wouldn’t say just how much vehicle output would be impacted by the suspension.
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This is transportation content if I’ve ever seen it.
Neutral: I’m A Gossip Girl Now
I just signed the lease on an apartment on the Upper East Side of Manhattan. Call me Blair Waldorf, because I’m very fancy. Unfortunately, this will continue my issue of not being able to have my car in the same state I live in. You win some, you lose some. What can ya do, ya know? It’s going to be a fun time. Buh bye, Lower Manhattan.
Shopping for a new car? Have you considered waiting until 2023? All that and more in The Morning Shift for April 18, 2022.
1st Gear: Car Companies Can Get Away With It
Car companies have been spending years — decades — desperately trying to keep prices down to stay competitive in the market. But what if… every car company raised their prices at the same time? What if they all started to produce only their most expensive models with the highest profit margins? What would encourage them to bring prices back down?
Anyway, here’s a news story from the Wall Street Journal from auto industry experts and insiders saying they just can’t find a way to bring down prices anytime soon:
“This could take years” before dealership stocks recover, said Steve Center, operations chief for Kia’s U.S. business. “You won’t see incentives, because we’re still going to be selling everything we can make.”
Auto makers entered this year optimistic that the chip shortage would gradually abate. But it continues to sporadically limit vehicle production globally, along with other disruptions, from the war in Ukraine to Covid-19 restrictions in China.
[…]
Even with car companies trying to generate buzz regarding new showroom offerings, an extended period of low inventory is continuing to leave car shoppers with few good alternatives and keep prices high.
After surging to record highs, the amount Americans have been paying for new vehicles showed some signs of leveling off in recent months. In March, the average transaction price—or the out-the-door price paid—declined slightly for the third straight month, to about $43,700, according to J.D. Power.
Still, it is about 26% higher than before the pandemic, when the average transaction price hit $34,600 at the end of 2019, the research firm has reported.
As long as car companies can keep getting away with high prices, I don’t see this coming to an end.
2nd Gear: BMW Says It Won’t Cut Jobs In EV Transition
A reminder that companies blaming things for job cuts is usually bullshit — they can prioritize keeping jobs around if they choose. Here is BMW saying it won’t blame any job cuts on its transition to battery-powered cars, as the Financial Times reports:
BMW will not cut a single employee in the transition from combustion engines to electric models, its chief executive has pledged, even as economists predict tens of thousands of job losses across the industry.
“We will not have job losses due to the transformation,” Oliver Zipse said. “At the end of the day, possibly already in this decade at our Munich plant, there will be fully electric production without anyone losing their job.”
His comments come as the European auto sector, as well as leading economists, warn that plans to ban petrol and diesel cars will lead to mass unemployment.
Generally, electric cars have fewer parts than ICE vehicles. Theoretically, EVs require less maintenance as well. Parts suppliers have claimed that job cuts are coming, and I don’t see why we can’t have jobs promises in the transition.
3rd Gear: 2023 Kia Niro EV Going 50-State Wide
I drove the current Kia Niro EV the other week and really enjoyed it in Southern California, with warm weather and plentiful chargers. Do I wonder what the car would be like in Topeka, Kansas? Or Lincoln, Nebraska? Or Minot, North Dakota? Of course! Now the Niro EV will go on sale in all 50 states, as Automotive News reports:
The second-generation 2023 Kia Niro electric crossover, one of three available electrified variants, will go on sale in the U.S. this summer in all 50 states, the automaker said last week. The current-generation EV is sold only in certain states.
“Part of our electrification strategy is to sell electric cars everywhere, not just to comply with regulations and the exempt states, or the California standard states,” said Steve Center, Kia America’s COO. “People want electric cars all over the country.”
4th Gear: Ford Down 19 Percent In China Q1
We reported on GM being down by around 20 percent in Q1 in China, so it feels perhaps unsurprising that Ford would be down by the same amount. From Automotive News China:
Ford Motor Co. and its joint ventures sold roughly 125,000 vehicles in China in the first quarter, a drop of 19 percent from the same period last year.
Ford’s China unit blamed the drop on the persistent semiconductor chip shortage and the negative impact from resurgent coronavirus outbreaks in the country.
Lincoln deliveries edged up 0.8 percent to 19,471 during the period and Ford-brand passenger vehicles fell 17 percent to 46,719.
5th Gear: Hongqi Super Luxe Chinese SUV Goes On Sale In Israel
I am charmed that China’s glitziest car brand managed to build a Cadillac Lyriq before Cadillac did. You can see the thing on Car News China, reporting on the model’s Israeli launch:
Israel is not the first country where Hongqi exports to. In September 2021, Hongqi held a ceremony for the launch of E-HS9 in the Norwegian market and announced its entry into the European market. Hongqi also exports to other countries such as Russia, Kuwait, and UAE.
In Hongqi’s global strategy, European users will gradually familiarize themselves with the Hongqi brand through the E-HS9 model, starting from Northwest Europe. In the future, Hongqi plans to launch small and medium SUVs and sedan products to enrich its product range in the European market and customer demands.
Reverse: I Always Respect A Plan That’s Just …
Let’s see what happens if we blow up a really big bomb?
Neutral: How Are You?
I have planted my tomatoes, eggplants, and some herbs for this spring. Buds are popping on the trees outside my window.