Auto File: EVs in reverse and reality catches up with Volvo

Reliance Infrastructure

10/09/2024 16:00

By Nick Carey, European Autos Correspondent
 
Greetings from London! 
    
Volkswagen’s shock announcement last week that it was
considering shutting some plants in Germany and thus engaging in
a battle with its powerful unions has remained a hot topic,
raising questions about the future of Germany’s economic model. 
    
Interesting solutions have been floated, including that shifting
to a four-day week could help address Volkswagen’s challenges. 
    
One thing stood out in Volkswagen CFO Arno Antlitz’s comments
defending cost cuts: Europe’s annual car sales will hover around
14 million, down from pre-COVID levels of 16 million. That’s a
big drop, especially as new Chinese entrants mean everyone is
chasing a slice of a shrinking pie.
      
The thing is, executives at big car companies have been saying
for years now that people are not going to buy cars in the
future because everyone will go for short-term rentals or
car-sharing services.  
But 14 million cars a year sounds a long way from a
subscription-service utopia.
       
Which brings us to today’s Auto File… 
    * EV retrenchment speeds up 

    * Volvo abandons 2030 electric dream 

    * BMW’s hydrogen joy ride  

     
    EV plans go awry 
  
The slowdown in demand for electric cars has left automakers
hitting the brakes or changing course in recent months and this
past week has been no exception, with Toyota slashing EV
production plans by a third for 2026, according to a report from
the Nikkei business daily.
The Japanese automaker now aims to make 1 million EVs in that
year, instead of 1.5 million, meaning a drop in output
equivalent to a car assembly plant or two. 
    
Volkswagen’s battery unit PowerCo is going to build just one of
two planned production lines at its Salzgitter plant in Germany
because of weak demand, while Northvolt will halt cathode active
material production in Sweden as the battery startup tries to
cut costs.
      
Meanwhile, Renault’s CEO Luca de Meo warns that slowing EV
demand means Europe’s auto industry could face fines of 15
billion euros for failing to comply with EU CO2 emissions
targets.
      
The news is not all good for Chinese EV makers as they expand
into new markets. As Reuters correspondent Daniel Leussink
reports, BYD has found it hard to get a foothold in Japan, where
EV demand is sluggish and foreign automakers have had a rough
ride. You can read about it here.
     
And an increasingly crowded market may soon have yet more
company. As Reuters correspondent Aditi Shah reports here,
India’s Reliance Infrastructure is also considering making EVs
and batteries. 
     
    Recommended reading: 
    * Platinum loves a hybrid  

    * Xi Jinping courts Norway  

    * Piedmont Lithium pulls back  

     
    Volvo bows to the inevitable  
As other automakers pulled back from ambitious EV targets, Volvo
had stuck to its own plans that its sales would be 100% electric
by 2030.  
No longer.  
As Reuters colleague Marie Mannes reports here, Volvo has also
scaled back.  
Given the slowdown in demand for EVs, going all electric has
become an incredibly steep road to drive for anyone who is not a
pure EV maker like Tesla. 
Volvo now says that by 2030 between 90% and 100% of its car
sales will be fully electric or plug-in hybrid models. Up to 10%
should be mild hybrids, where electric power occasionally backs
up the combustion engine. 
Like its peers, the Swedish automaker owned by China’s Geely is
beefing up its plug-in hybrid offering to drive profits,
starting with a revamped version of its XC90 hybrid. 
After sticking to its 2030 all-electric target long after others
backed off, Volvo’s head of strategy described its new approach
as “pragmatic.” 
     
    BMW goes for it with hydrogen 
  
Long a proponent of hydrogen as a possible route to
zero-emission cars, BMW says it will launch its first
hydrogen-powered vehicle in 2028.  
Japan’s automakers are big fans of hydrogen cars and have led
the charge with hydrogen fuel cell technology. Indeed, BMW’s
hydrogen fuel cell car has been developed using technology from
Toyota, which will help the German premium car company to keep
costs down. 
BMW has been testing a hydrogen passenger car, the iX5 Hydrogen,
with a range of 500 km (310 miles) that can refuel in three to
four minutes, though limited hydrogen fueling infrastructure in
Europe makes finding somewhere to fill up challenging. 
It says its hydrogen vehicle would be an existing model with a
hydrogen fuel cell, without giving further details, including
price or production volume. 
      
    Trump has a job for Tesla’s Musk 
  
Republican presidential candidate Donald Trump said if he wins
the U.S. election in November, he has a job for Tesla CEO Elon
Musk: heading a new government efficiency commission.  
Trump provided few details but said the new commission
would eliminate "fraud and improper payments" within six months
of being formed. 
Given that investors have already grumbled about how much time
Musk spends away from Tesla and focusing on the growing list of
problems at his social media platform X, meeting that ambitious
target of wiping out fraud could provide a further unpopular
distraction. 
Musk, who back in 2021 took on the modest title of “Technoking
of Tesla,” responded to Trump’s proposal by saying he would be
honored to serve, adding "No pay, no title, no recognition is
needed." 
     
    Fast Laps 
  
Chinese new car sales fell in August for the fifth straight
month, dropping 1.1% versus the same month in 2023, but sales of
fully electric and plug-in hybrid models rose thanks to
subsidies for buyers trading in more-polluting models. 
    
U.S. regulator the National Highway Traffic Safety
Administration is proposing requiring some future vehicles be
redesigned to reduce serious or fatal injuries in crashes
involving pedestrians where they strike the hoods of pickup
trucks or SUVs that do not currently meet international
pedestrian protection standards. 
    
Japan will hand out more subsidies for EV battery production,
pledging as much as $2.4 billion to support projects from Toyota
and other major companies to boost its battery supply chain.
     
A bipartisan group of U.S. lawmakers has asked the CEOs of six
major auto parts retailers if they bought products from Chinese
company Qingdao Sunsong and its U.S.-based subsidiary that may
have evaded tariffs, according to letters seen by Reuters. 
    
Stellantis  is recalling 1.46 million vehicles worldwide due to
a software malfunction in the anti-lock brake system that can
increase the risk of crashing.
     
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 (Editing by Emelia Sithole-Matarise)