Auto File: Winter Comes for EVs

Schaeffler AG

19/01/2024 16:00

Joe White
Global Autos Correspondent
    
    Greetings from the Motor City!  
    
    Winter arrived late in the Midwest, but the past week’s
bitter cold and snow more than made up for a green Christmas. As
such, it’s been a great week for four-wheel-drive SUVs, not so
good for electric vehicles.  
    Tales of Tesla owners with bricked cars shivering in lines
at Superchargers in Chicago went viral this week. Ford on Friday
dropped news that it will slash production of its F-150
Lightning electric truck to one shift and add a third shift of
production at the Michigan factory that builds gas-fueled
Broncos and Ranger pickups.  
    EV startup Fisker’s share price dropping below $1 – and
shares of Rivian and Lucid slumping into the new year – are
sprinkles on top for EV skeptics. 
    I spent Wednesday and Thursday at a conference hosted by the
Chicago Federal Reserve where auto industry experts delivered a
sobering outlook for Western legacy automakers. We’ve got
highlights from the sessions below and a video replay should be
here soon. 
    One more thing: The Auto File covers U.S. election year
politics only when it affects the auto sector - and don’t worry,
it will.  
    But Reuters has a team of reporters, editors, photographers,
video journalists and data specialists sorting through the
static. Stay up to speed on all the developments in the contest
to set the direction for the world's largest economy by signing
up here for the new weekly newsletter, On the Campaign Trail.  
    Have a great weekend! On with the show –  
    
    Today – 
    *         More red flags for EVs 
    * Chinese automakers are on the move 
    * U.S. auto industry’s challenging outlook  


    * EVs catch cold 
    Electric vehicle demand rose in the United States and Europe
last year and EV market share is projected to keep growing.
However, there are new red flags flying over the pace of EV
sales growth, and whether automakers can expand EV sales more
rapidly and still turn a profit. 
    Ford on Friday said it will slash production of its F-150
Lightning electric pickup to one shift, and redeploy workers to
add a third shift of gasoline Bronco SUV production.  
    The retreat underscores Ford’s decision to pull back from a
deeply unprofitable EV strategy – despite the bad optics
inherent in conceding that a marquee product endorsed by U.S.
President Joe Biden has fallen short with customers. 
    The Biden administration, meanwhile, responded to concerns
about inadequate EV charging infrastructure by announcing
another $325 million in government funds to repair or replace EV
charging stations and cut battery costs. The announcement came
after the media uproar over stranded Tesla owners in Chicago’s
deep freeze. 
    Competition in the U.S. EV market will not get easier. As
Ford cuts electric truck output, Tesla is ramping up production
of its Cybertruck. General Motors aims to increase production of
its Cadillac Lyriq electric SUV after a disappointing launch
last year.  
    Stellantis unveiled details of an EV program aimed at
delivering electrified Jeeps, Dodge muscle cars and other models
to North America and Europe. 
    The EV transition is hitting bumps in Europe. Tesla this
week slashed prices in Europe for its best-selling Model 3 and
Model Y, after shutting its Berlin factory for two weeks. Tesla
blamed the production halt on Red Sea supply chain problems.  
    The price cuts came as German EV sales in December collapsed
after the government eliminated subsidies. Volkswagen is now the
top-selling EV brand in Germany. Chinese EV makers are stepping
up shipments of EVs to Europe as well. 
    Stellantis CEO Carlos Tavares warned that automakers risk a
“blood bath” if they engage in an EV price war that outruns
their ability to lower EV production costs. 
    Amid all this, Elon Musk is provoking a potential governance
crisis with a demand that Tesla’s board boost his voting control
of the automaker to 25%.
        
  
        * Essential Reading 
    *         Fire trucks and America’s manufacturing divide 
    * Red Sea bottlenecks could have a lasting impact 
    *         Lithium miner Albemarle cuts back 


        * China’s automakers won’t let up 
    Policymakers in Europe and the United States are sending a
message to China’s EV manufacturers: Slow down your efforts to
dominate the EV industry. That message is not getting through. 
    Global EV sales leader BYD and state-owned Chinese automaker
SAIC hit the accelerator on their export strategies. BYD is
sending a ship loaded with 5,000 EVs to Europe even as EU trade
officials launch an investigation into whether BYD improperly
benefits from government subsidies.
    
        
  
        * A sobering view of the road ahead 
China’s comprehensive EV strategy was topic A among economists,
trade experts and industry executives gathered in Detroit for a
conference hosted by the Chicago branch of the Federal Reserve
Bank.  
    Here are some of points raised over two days:  
    * U.S. vehicle sales have recovered to 90% of pre-pandemic
levels,
but capacity utilization remains well below the 2015-2019
average – Fed adviser Kristin Dzizcek 
 
    * The average vehicle from a new Chinese EV brand has been
on the
market for 1.3 years, compared with legacy models that are more
than four years old. “These were designed when Baby Yoda was a
thing.” – Mark Wakefield of AlixPartners 
 
    * “Every day that goes by we see more Chinese investment in
Mexico” that could eventually allow Chinese automakers in to the
U.S. market – Mary Lovely, Peterson Institute.
 
    * “You are seeing a greater push toward hybrids, especially
in the
U.S.,” Jeff Hemphill, Schaeffler Group 
 
    * Tesla’s plan for an “unboxed” manufacturing system that
breaks
EV assembly into chunks could cut manufacturing costs by 30% -
Mathew Vachaparampil, CEO, Caresoft Global. 
 
    * “A lot of the things we need to do for the clean energy
transition rely on help from countries that are not in our
circle of friends right now.” – Christine McDaniel, George Mason
University 


        * Fast Laps 
    - Northvolt wants to buy cobalt from the Democratic Republic
of Congo, betting it can resolve concern about abuses of mine
workers to secure “affordable” battery materials. 
 
    - Goodyear named former Stellantis COO Mark Stewart as its
new CEO. 
 
    - TuSimple, the robo-trucking startup, will delist from
NASDAQ.  
 
    - EV registrations fell by 48% in Germany during December
after the government ended EV subsidies. Overall, EV sales
across the EU rose in 2023 to capture 48% of the market. 
 
    - EU lawmakers agreed on rules to cut heavy truck emissions
by 90% by 2040. 
     

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 (Editing by Andrew Heavens)