🗺️ Auto News from The US, China, and Europe

October 23, 2024

The Gist:

Rivian’s workers are literally getting banged up, while their stock takes a tumble. Meanwhile, the U.S. government races to secure EV grants, Ford hands out massive F-150 Lightning discounts, and GM’s $35K Equinox might steal the SUV show. Across the pond, Volvo faces a premium EV slowdown, Germany courts India as an economic partner, and Jaguar is busy building vintage E-Types with Bluetooth—because who doesn’t need a heated windscreen on a classic roadster? Oh, and Chinese self-driving cars are quietly racking up miles on U.S. roads.

This Digest

🤖 Rivian's Rough Ride: From Hype to Hazard

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Rivian’s shiny reputation is taking a hit both on the production floor and in its stock price. Workers are getting injured, and demand is falling—let’s just say Rivian’s going through some serious growing pains.

Bits:

  • Factory Floor Fiascos: Rivian has faced more serious safety violations than any other U.S. automaker since 2023. Injuries at the factory include a cracked skull, amputated finger, back lacerations, and even a case of "Rivian blue" vomit from chemical exposure.

  • Production Cuts: Rivian initially planned to produce 57,000 vehicles in 2024, but now they’ve slashed that to between 47,000 and 49,000. This reduction signals trouble in both demand and supply chain issues.

  • Inventory Surge: In Q3, Rivian added 3,139 units to its inventory, the second-largest quarterly build in company history, indicating potential oversupply and falling customer interest.

  • Analyst Downgrade: JPMorgan analysts cut Rivian's price target from $14 to $12, citing concerns about demand and delivery trends. With the EV market heating up, this is a red flag for Rivian’s long-term prospects.

🇺🇸 EV Grants, Discounts, and the Political Storm Around Electrification

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The White House’s EV Push: Armadas, Not Knives

The U.S. government is moving fast on its $1.7 billion grants for EV plant conversions, but politics are heating up as the 2024 election nears. U.S. Energy Secretary Jennifer Granholm emphasized the Biden administration’s commitment to making the U.S. a leader in electric vehicle production, but not without some major political roadblocks.

  • The Department of Energy (DOE) is working "as fast as we can" to finalize grant commitments, with $500 million for GM’s Lansing plant and $334.8 million for Stellantis’ Belvidere plant on the line.

  • United Auto Workers (UAW) threatens strikes over Stellantis’ delayed investments, adding tension as automakers negotiate with the DOE.

  • Granholm stressed that the Biden administration is not playing around with EVs, saying, “This time, the United States government is not effing around.” Bold words, but the clock is ticking as Republican candidate Donald Trump threatens to repeal EV investments, casting doubt over the future of these grants.

Ford’s Lightning Deals: Not Just Political Posturing

While the government is busy with grants, Ford is quietly offering huge discounts on its F-150 Lightning to keep EV adoption on track. Fleet buyers could stack up to $22,500 in rebates and discounts.

  • Ford’s $7,500 Fleet Discount stacks with the federal $7,500 tax credit, giving commercial buyers a serious price cut.

  • Depending on where you live, you might be eligible for even more rebates through state programs and utilities like ComEd in Illinois, further sweetening the deal for those ready to electrify their fleets.

Ford’s strategy of incentives may be a small piece of the bigger EV push, but it shows how automakers are navigating the political and economic complexities of the EV transition, one fleet sale at a time.

🛠️ Google + Qualcomm: More Buzzwords, Less Clarity

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The Google-Qualcomm partnership announcement sounds great, until you try to figure out what they're actually doing. Spoiler: they're adding AI to your car’s dashboard, but the details are buried under layers of jargon.

Wait, what’s the big deal?

Oh, nothing much—just “generative AI-enabled digital cockpits.” Yeah, you’ll get “immersive map experiences” and “real-time updates” powered by Snapdragon chips. All we need now is for your car to start a podcast while you’re driving.

Who exactly asked for this?

Apparently, automakers did! Qualcomm will lead the charge in customizing AI solutions with automakers to meet their needs. That said, they haven’t named any automakers who are ready to jump on this bandwagon. Guess it’s a case of “build it and maybe someone will want it?”

Is this really necessary?

Do we need our cars to “anticipate driver needs”? The short answer: probably not. But when your car suggests it’s time for a coffee break before you even feel tired, you’ll know that Google and Qualcomm were just looking out for you.

✈️ Lilium’s Air Taxi Nightmare: Flying Cars Grounded

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Flying High—Until They Weren’t

Once Europe’s most promising air taxi startup, Lilium is now fighting for survival. After being denied a €50 million loan from the German government, Lilium is scrambling to raise emergency funds from the state of Bavaria. Their ambitious plan to develop flying cars (or eVTOLs) is facing turbulence, and if they can’t secure funds soon, Lilium could crash-land before takeoff.

Why Air Taxis Are Struggling

Lilium’s financial woes come at a bad time. The eVTOL market is still in its infancy, and developing these futuristic vehicles has proven to be more expensive and difficult than expected. Despite partnerships with major airlines and airports, Lilium needs significant capital to stay afloat.

🏎️ BYD’s Low-Cost EVs Shock Japan

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Breaking the Mold—BYD’s Dominance in Japan

Japanese automakers are feeling the heat as BYD rolls out budget-friendly EVs that outperform and underprice local competitors. At a recent EV seminar in Japan, BYD’s Atto 3 SUV, priced at just $30,000, stole the show, leaving attendees wondering how BYD can build vehicles so cheaply.

How Does BYD Do It?

The secret to BYD’s success is vertical integration. Unlike traditional automakers, BYD builds nearly all its components in-house, slashing costs and improving efficiency. This approach allows them to sell EVs like the Atto 3 and Dolphin for far less than rivals, positioning them as a major threat to the Japanese auto industry.

It’s catching on.

Chinese tech giant Xiaomi is set to complete its expanded EV factory by mid-2025, further pushing into the automotive sector. Similar to BYD, Xiaomi aims to challenge global competitors with affordable electric vehicles.

🚕 China’s Driverless Dreams Test US Roads

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Quiet Takeover?

Chinese companies have been quietly testing their autonomous vehicle technology on U.S. roads for years, logging millions of miles in states like California. While these tests have helped companies like Baidu and WeRide make strides, they’ve also raised national security concerns in the U.S.

The Data Dilemma

With vehicles gathering data on U.S. infrastructure and traffic patterns, experts worry about the potential for surveillance. Some lawmakers are pushing for a ban on Chinese-connected vehicles, citing concerns over data privacy and national security.

🏎️ GM Stock Surges on Q3 Success

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The Comeback King

General Motors (GM) just had its best stock day since 2020, thanks to a massive Q3 performance that beat Wall Street expectations. GM raised its full-year guidance, and shareholders are cheering.

The Numbers:

  • Earnings per Share: $2.96 vs. $2.43 expected.

  • Revenue: $48.76 billion vs. $44.59 billion expected.

  • Outlook: GM raised its 2024 earnings forecast, expecting up to $15 billion in adjusted earnings before interest and taxes.

The China Problem

Despite strong North American results, GM is struggling in China, where it reported a $137 million loss in Q3. The company is working on restructuring its operations in the world’s largest auto market, hoping for a turnaround.

What’ll 35K Get Ya?

Amid its strong Q3 performance, GM is launching the affordable $35,000 Chevy Equinox EV with up to 319 miles of range, aiming to capture the mass market. This move positions GM to compete with rivals like Toyota in the growing electric SUV market.

🌍 European Auto Update: Shifting Gears Amid Global Challenges

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Volvo’s Electric Dilemma: The Premium Pinch

Volvo started the year with high hopes, but the road ahead is getting bumpy. The EV market is cooling, especially for high-end models, forcing Volvo to pump the brakes on its sales forecast.

  • Volvo now expects growth of 7-8% in 2024, down from its previous estimate of 12-15%.

  • CEO Jim Rowan blames inflation, high interest rates, and Chinese competition, which is putting serious pressure on luxury EV sales.

  • On the bright side, Volvo still turned a Q3 profit of 5.8 billion Swedish crowns—proving that even with a flat tire, the engine's still running.

Germany’s Strategic Pivot: Betting on India, Not Just China

While Volvo grapples with demand, German automakers are diversifying their supply chains. As tension with China rises, Germany is hedging its bets on India’s growing market.

  • Chancellor Olaf Scholz is in New Delhi, pushing for stronger ties with India’s 7% growth rate and skilled workforce.

  • German companies like Volkswagen and DHL are already eyeing joint ventures in India, seeking a cheaper and more reliable alternative to Chinese manufacturing.

  • The message is clear: China may be the heavyweight, but India’s looking like the scrappy underdog ready to make a play.

Jaguar’s Retro Revival: The E-Type Returns

While everyone’s racing toward the electric future, Jaguar is taking a pit stop in the past. The British automaker is hand-building two E-Type Commemoratives for a Southeast Asian client, merging classic luxury with modern tweaks.

  • These aren’t your dad’s E-Types—expect heated windscreens, Bluetooth radios, and a modernized 3.8L engine under the hood.

  • Jaguar Classic spent over 2,000 hours crafting each car, with details like solid silver switchgear and 18-carat gold trim. Talk about going all-in on retro charm!

  • It may not be the future of mobility, but it’s a stunning reminder that sometimes the past is worth revisiting—especially when it looks this good.

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