Auto File-Tesla delivers, BYD scores
02/01/2024 16:00
Jan 2 -
Joe White
Global Autos Correspondent
joe.white@thomsonreuters.com
Greetings from the Motor City!
Happy New Year! It’s good to be back. After two weeks off duty,
I was able to log on to my work computer in one try without
resetting my password. That’s an auspicious start to 2024.
Not only that, the Detroit Lions are going to the NFL playoffs
and the University of Michigan won the Rose Bowl. This must be
Detroit’s lucky year. Right?
The last days of December are supposed to be a quiet time in the
world of cars. Not so anymore. There’s not space to review
everything that happened over the period once known as the
Christmas break. We’ll hit the high points and look ahead to
some of the events kicking off the year. Welcome back!
Today –
* BYD vs Tesla
* More EVs lose U.S. purchase subsidies
* America’s vehicles get heavier and faster
BYD pulls ahead of Tesla
Tesla reported Tuesday fourth quarter and full year vehicle
delivery figures that beat most Wall Street estimates.
Tesla delivered 1.8 million vehicles in 2023 – the company’s
release is here. The final tally fell short of Elon Musk’s
aspiration for 2 million vehicles.
Tesla fared better than rival Rivian, which dismayed investors
on Tuesday with Q4 deliveries that fell short of analysts'
expectations. Rivian shares slumped 6%.
But when it comes to selling electrified vehicles, China’s BYD
is now the one to beat.
BYD said deliveries of its EVs and plug-in hybrids surged
62% last year to just over 3 million vehicles – 1.6 million of
them battery electrics, the rest plug-in hybrids. China lumps
both categories together as new energy vehicles.
In the global market for electrified vehicles, Tesla and BYD are
pulling away from the field. Both have highly vertically
integrated operations – in contrast to legacy automakers that
still outsource much of their manufacturing.
Both are moving aggressively to expand capacity, sales, and
technical capability. BYD said last week it plans a production
base in Hungary – the better to circumvent potential EU tariffs.
BYD also got approval last week to start testing an advanced
assisted driving system – aka, an Autopilot fighter.
Tesla is pushing ahead with plans for a plant in Mexico, and
using the launch of its Cybertruck to showcase innovations -
including a 48-volt electrical architecture and even bigger body
castings – that put it years ahead of legacy rivals.
How many Cybertrucks Tesla will build in the near term is
another matter.
Bottlenecks in production of Tesla’s next-generation 4680
batteries could keep the Cybertruck in production hell for
months, sources told Reuters.
BYD and Tesla make money on their electric vehicles – most
rivals do not. Still, investors will be watching Tesla’s fourth
quarter results to see how much of the company’s profit margin
was given away to sustain sales momentum.
Tesla continues to demonstrate enviable brand power, despite
controversy created by Elon Musk’s social media side gig and
Tesla’s pugnacious stances toward unions, regulators, and
customers (more on the latter below.)
Tesla boosted sales in Norway and Sweden, despite an escalating
fight with Nordic trade unions that has hobbled vehicle
shipments and prompted stern words from Nordic investors.
Essential Reading
* U.S. unions capitalize on a labor friendly
Washington
* Red Sea attacks mean more global supply chain trouble
* China’s automakers battle the “Great Uncoupling”
The EV Incentive Reduction Act
As the old year slipped away, so did U.S. tax subsidies for two
dozen electric vehicles, including certain versions of the Tesla
Model 3 and the Cybertruck, the Nissan Leaf and General Motors’
recently launched Chevy Blazer EV.
The U.S. Treasury’s online guide to which vehicles qualify for
tax credits up to $7,500 is here.
On the plus side, EV buyers who qualify for a tax subsidy under
the Inflation Reduction Act (IRA) can now get the value of that
credit at the dealership when they buy the vehicle, instead of
waiting months to get the credit via a tax return.
But the complexity of the IRA’s domestic content rules and
income limits will challenge consumers and automakers alike. GM,
for example, is scrambling to find a compliant source for
components for Ultium platform EVs such as the Cadillac Lyriq to
push their domestic content back to levels that qualify for
subsidies.
At the same time, U.S. Sen. Joe Manchin, a principal architect
of the IRA and not a fan of EV subsidies, said he wants the
Treasury to write tighter rules to prohibit subsidies for EVs
with Chinese content.
Meantime, take Q4 sales for EVs with a grain of salt. Customers
racing to grab tax subsidies before they vanished could have
juiced December sales at the expense of demand in Q1.
The U.S. vehicle fleet: Heavy on the horsepower
The Biden administration released the annual scorecard for new
vehicle fuel efficiency on the shortest day of the year.
The numbers, which you can read here, tell different stories
depending on how you look at them.
Average fuel economy for 2022 model year vehicles rose to a new
record of 26 miles per gallon (mpg) and is projected to rise to
26.9 mpg in model year 2023, thanks in large part to increased
sales of electric vehicles.
Climate action groups, however, pointed out that average CO2
emissions/fuel economy for gasoline vehicles have barely
improved since 2015.
Overall, the vehicles American consumers favor are getting
larger, heavier, and faster, the Environmental Protection Agency
said.
The average 2022 model vehicle packed 259 horses under the hood,
and that average is expected to rise to 272 horsepower in 2023.
Pickup trucks and SUVs accounted for 73% of 2022 model year
sales.
Customers challenge Tesla over defects
Faced with thousands of complaints about suspension system
failures that sometimes caused wheels to fall off, Tesla blamed
customers for mistreating their vehicles, Reuters reported.
Tesla records showed that engineers were aware of widespread
problems with certain suspension parts. The company conducted a
recall in China under pressure from regulators. It did not order
a recall for similar problems in the United States or Europe.
Tesla’s handling of suspension problems is now under
investigation in Sweden and Norway. Two U.S. Senators called on
Elon Musk to recall vehicles with faulty suspensions, citing the
Reuters report.
Tesla responded via Musk’s X.com platform that the Reuters
report was “riddled with incomplete and demonstrably incorrect
information.”
The post noted a key issue for Tesla customers and regulators:
Tesla “has the most advanced vehicle telemetry system that can
identify emerging issues, determine scope, and allow for faster
vehicle and service improvements than has ever been seen in the
auto industry.”
Tesla also can use that data to challenge customers who complain
that a defect caused an accident.
The connected car and cyberstalking
A woman in San Francisco complained to police that her abusive
husband was using the mobile internet connections to her Tesla
Model X to stalk and harass her – and Tesla denied her requests
to turn off the tracking capability, Reuters reporters Kristina
Cooke and Dan Levine report.
The case exposes the dark side of the connected vehicle
revolution that will be celebrated at next week’s CES convention
in Las Vegas
Tesla won a lawsuit brought by the woman in the San Francisco
case, successfully arguing that the woman had no proof its
technology enabled stalking. Other automakers are working on
ways to allow vehicle operators to mask their locations.
Fast Laps
Chinese smartphone maker Xiaomi unveiled its first electric
vehicle and CEO Lei Jun said he expects to be among the world’s
top 5 EV makers within 20 years.
Diesel engine maker Cummins agreed to pay a record $1.675
million fine to U.S. regulators for installing “defeat devices”
in Cummins diesel engines used in Ram pickups to cheat federal
emissions tests. Cummins said it will take a $2.04 billion
charge related to regulatory claims.
Germany cut EV subsidies as part of a broader budget overhaul.
German automakers said they would replace the lost subsidies.
Volkswagen outlined plans to get smaller and faster - slashing
product development times and reducing staff as part of an
effort to shed 10 billion euros in costs.
Toyota’s production surged to a record in November of nearly
926,000 vehicles. The jump put Toyota on track for global sales
of roughly 10 million vehicles.
A scandal over rigged safety tests forced Toyota’s Daihatsu
mini-car brand to halt production and offer compensation to
suppliers.
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(Editing by Mark Potter)