Auto File-Stellantis and VW’s Trump tribute

Canoo

28/01/2025 16:00

Jan 28 - By Nick Carey, European Autos Correspondent 
     
Greetings from London! 
    
The tussle over tariffs imposed by the European Union last
October on Chinese-made EVs reached a new phase this past week
as BYD, Geely and SAIC all filed legal challenges to the border
duties, as did BMW and Tesla.
     
The challenges were filed with the Court of Justice of the
European Union (CJEU), where proceedings last an average of 18
months and can be appealed. 
     
The European Commission said it was aware of the cases and has
two months and 10 days to prepare a defence. The Commission
issued two reports spanning more than 900 pages on Chinese
subsidies for companies including automakers to fend off legal
challenges, so it is unclear how well the automakers will fare
in court.
     
In the meantime, Beijing and Brussels have been in talks on
possible minimum price commitments instead of tariffs since
September, which seem more likely to bear fruit.  
 
Which brings us to today’s Auto File… 
    *         Stellantis, VW retry old routine to please Trump 

    * A cheap EV for Tesla investors? 

    *         Rivian feels the love  

 
 
    VW, Stellantis aim to please Trump     
Volkswagen and Stellantis are the two European automakers most
exposed to the impact of the 25% tariffs U.S. President Donald
Trump has threatened.
      
So, it was not surprising to see both companies talking up U.S.
investments within days of Trump taking office last week.
      
    Stellantis said it would now go ahead after all with plans
to build a new midsize pickup truck at its Belvidere plant in
Illinois. The plant had been the focal point of an acrimonious
dispute with the United Auto Workers union, which filed unfair
labor practice charges last year claiming Stellantis was
delaying planned investments there – $3.2 billion in a battery
plant and $1.5 billion to build the pickup truck.
      
But now, it’s all back on track.
      
VW CFO Arno Antlitz said the automaker will make additional
investments in the United States.
     
Automakers learned from Trump 1.0 that what he wants is to make
headlines with big U.S. job-creating investments by
foreign-owned companies and claim victory.
     
So, watch for more such announcements from global automakers
looking to avoid tariffs and be in Trump’s good graces. 
 
Recommended reading: 
    * Hyundai Steel considering U.S. plant 

    * Portuguese lithium deposit bigger than expected 

    * CATL warns of revenue drop  

 
 
    Tesla investors still hope for cheap EV  
Investors in Tesla hope their long wait for a lower-cost EV
model to boost the automaker’s flagging sales will end when the
company reports quarterly results this week.
      
As my Reuters colleague Akash Sriram reports here, investors
hope for details on a cheaper car which could help Tesla hit its
target of 30% higher deliveries after posting its first ever
decline in 2024.
     
But investors have already been waiting years for a lower-cost
EV.
      
Last April Tesla ditched ambitious plans to produce an all-new
model that had been expected to cost $25,000, saying it would
launch cheaper cars based on its current platforms and their
existing production lines in the first half of 2025.
      
In the meantime, fast-moving rivals like China’s BYD have been
launching model after model, making Tesla’s small, ageing lineup
look even older.
     
Even if details are lacking, some investors may shrug it off.
      
The world's most valuable automaker has seen its stock market
valuation soar more than 60% to $1.3 trillion since Trump’s
election victory with the financial backing of CEO Elon Musk, as
investors bet the new administration will ease regulations on
the self-driving vehicle systems Tesla champions.  
 
    VW cash brings Rivian some love 
The joint venture between U.S. EV maker Rivian and Volkswagen is
in talks to supply software and electrical architecture to other
automakers, with a senior Rivian executive saying that other car
companies “are knocking on our door.” 
    
Not so long ago, Rivian was locked in a race against time to
scale up as it burned through mountains of cash. A number of
other EV startups, including Fisker, Arrival and Canoo have
already failed to get there.
     
But as my Reuters colleague Abhirup Roy reports here, that
changed when the German automaker agreed in November to invest
$5.8 billion in the joint venture to integrate advanced
electrical infrastructure and Rivian's software technology for
both companies' future electric vehicles.
     
That enables Rivian to negotiate better supplier deals and
reduce costs. It also gives other traditional automakers
confidence in Rivian as they seek quick and easy access to the
technology and software that they have struggled to build for
years. 
 
    Investor pressure for Vingroup 
Vietnamese conglomerate Vingroup is facing scrutiny from foreign
investors over its continued backing for loss-making  EV maker
VinFast.
      
As my colleagues Francesco Guarascio and Phuong Nguyen report
here, Vingroup’s shares have fallen to near multi-year lows,
pushing its borrowing costs up.
     
Pressure on Vingroup intensified this month as Moody's and Fitch
issued 'junk' ratings for its most profitable unit, real estate
firm Vinhomes, as well as a planned $500 million international
bond sale.
     
Vingroup and its founder, Pham Nhat Vuong, had poured $13.5
billion into VinFast as of October in loans and grants,
and promised  nearly $3.5 billion more in November, despite
concerns raised by investors at the company's last two annual
shareholders' meetings.
     
Despite the pummeling from investors, Vingroup says it will
continue to back VinFast. 
 
    Fast Laps 
Global sales of fully electric and plug-in hybrid vehicles will
rise by at least 17% this year to over 20 million cars helped by
China's ongoing auto  trade-in subsidies, according to a
forecast from research firm Rho Motion.
      
    Tesla launched a redesigned version of its best-selling
Model Y crossover in the United States, Canada and Europe on
Thursday, weeks after it was first released in China.
     
India’s Tata Motors is betting that investments in
locally-manufactured EV batteries will help it maintain its edge
despite intensifying competition, its group CFO told Reuters.
     
    Aptiv plans to spin off its electrical distribution systems
(EDS) business into a new company, as it aims to focus on its
advanced driver assistance technology.
      
    Nissan will procure batteries for EV sold in the U.S. from
South Korea's SK On from around 2028 onwards as the troubled
Japanese automaker looks to ramp up its EV business.  
 
Think your friend or colleague should know about us? Forward
this newsletter to them. They can also subscribe here. 

 (Edited by Christina Fincher)