Auto File: Fall of the house of Carlos
15/10/2024 16:00
By Nick Carey, European Autos Correspondent
Greetings from London!
Well, almost Paris, where I attended this year’s car show on
Monday this week with other Reuters autos colleagues.
While smaller car shows are struggling - poor Geneva's motor
event is no more - Paris was hopping. Chinese companies were
there in force trying to get a foot in the door in Europe, going
toe to toe with homegrown European automakers defending their
home territory.
Consumers in Paris can now come face to face with new, virtually
unknown brands, including Aito, Hongqi (“Red Flag”, Chairman
Mao’s favourite brand), GAC, Leapmotor and Xpeng.
Chinese auto executives radiated optimism, though BYD did take
the time to slam the European Union’s planned tariffs for
Chinese-made EVs.
Which brings us to today’s Auto File…
* End of the road for Tavares, almost
* A robotaxi, someday, from Tesla
* BMW’s Zipse: scrap 2035 fossil fuel ban
Carlos’ long farewell
The last couple of weeks have moved fast for Stellantis CEO
Carlos Tavares.
After a hefty shock profit warning on Sept. 30 because of
spiraling inventory problems in Stellantis’ cash-cow U.S.
market, Tavares initially downplayed the matter, calling it a
“small operational error” even as the company’s shares continued
a stomach-churning dive.
Just over a week after those fateful words, Stellantis announced
Tavares will retire when his contract expires in early 2026. For
an executive who seemed invincible just a few months ago, this
was a rapid turn for the worse.
Tavares appeared at a handful of briefings at this week’s Paris
car show to defend his record and talk up Stellantis’ future,
promising that its U.S. inventory problems will be solved by
Christmas (translation: huge discounts on Jeeps, Rams, Dodges
and Chryslers coming your way).
While acknowledging that as CEO he is responsible for things
that go wrong at Stellantis, Tavares said the inventory problems
came down to a “risky” second-quarter marketing plan by regional
U.S. managers that he saw but did not overrule.
The problem with that argument is that according to inventory
data provided to Reuters and commentary from experts and
Stellantis’ U.S. dealers, the automakers’ problems have been
years in the making.
Industry experts and dealers say Stellantis spent years pricing
itself out of the market, under investing in new U.S. product.
It was then slow to discount vehicles as they piled up on dealer
lots. You can read about it here.
Recommended reading:
* French brandy makers fear EV tariff fallout
* Trump’s car loan tax giveaway
* India bids farewell to Ratan Tata
Someday, Tesla robotaxis should come
Some investors had real questions in the runup to Tesla’s
robotaxi event last week and were especially keen to know how
soon they could be mass produced and turn a profit for Elon
Musk’s company.
At a glitzy unveiling, Musk boldly proclaimed that the
“autonomous future is here.”
But it’s not quite here. The “Cybercab” should theoretically go
into production in 2026, though Musk acknowledged his optimism
with targets (see the Cybertruck, announcements on self-driving
cars in 2016, 2019…).
Investors were underwhelmed, especially by the scant details
provided by Musk, and Tesla’s shares fell 9% the next day.
Industry experts and investors were also puzzled by the
robotaxi’s design – a low-slung, two-seater, sporty coupe -
quite unlike a typical taxi with room for several passengers and
luggage.
It is also not clear how much demand there is for two-person,
self-driving taxis. Musk has proclaimed this is the future.
But the company’s future has so far been predicated on filling
up the production lines at expensive Tesla factories in the
United States, Germany and China.
So, it is little wonder some investors were left wanting more.
BMW’s Zipse: ditch EU fossil-fuel ban
Speaking at the Paris car show on Tuesday, BMW’s Oliver Zipse
became the first European auto CEO to call for the EU to cancel
its 2035 ban on fossil-fuel cars.
BMW’s top executive argues that Europe’s laser focus on
switching to only EVs as an alternative to combustion-engine
cars will only benefit Chinese rivals, who dominate the
battery-making industry.
Zipse has previously argued for alternatives to electric
vehicles to be allowed, such as hybrids, e-fuels and hydrogen
fuel cells.
But this time, the German premium automaker’s CEO said the mood
in Europe was "trending towards one of pessimism" and the region
needs different regulations to remain competitive.
At the same event, the head of France's auto association PFA
stopped short of calling for the 2035 ban to be abolished, but
added it was necessary to quickly "come back around the table"
for a review of the EU’s targets that is currently scheduled for
2026.
Hyundai’s IPO a biggie for India
Hyundai Motor India sold shares worth $989.4 million to
institutional investors including BlackRock and Fidelity this
week, in a $3.3 billion IPO that makes it India’s largest share
offering yet.
The IPO shows continued enthusiasm for India's capital markets,
with 260 companies having raised more than $9 billion so far in
2024, according to LSEG data. The year-to-date volume has
already surpassed the $7.42 billion total raised last year.
Investors included the government of Singapore, BlackRock and
Fidelity.
You can read about it here.
For more on all the latest big stories out of India, check out
India File, a new Reuters newsletter.
Fast Laps
Volkswagen reported a 7% drop in third-quarter global
deliveries, in a fresh sign of trouble for the giant German
automaker.
Swedish battery maker Northvolt is trying to sell off its
stockpile of battery-making materials as it tries to shore up
its finances. Separately, Northvolt said it has paid a monthly
tax bill for October, as doubts emerged in media on whether the
cash-strapped group would be able to do so.
EV startup Fisker received court approval for its bankruptcy
liquidation plan following last-minute negotiations to preserve
the company's $46 million sale of its remaining inventory of
about 3,000 Ocean SUVs.
United Auto Workers president Shawn Fain says hundreds of
thousands of U.S. jobs are at stake if Republican former
President Donald Trump wins the Nov. 5 election and makes good
on his threat to overturn EV investments.
Italy's government says Stellantis’ robotics business Comau will
have to preserve production plants and central functions in
Italy as conditions for the sale of a majority stake in the
company to One Equity Partners.
Think your friend or colleague should know about us? Forward
this newsletter to them. They can also subscribe here.
(Editing by Emelia Sithole-Matarise)