AD #2588 – Mopar Sells Out of Hellephant Engines, Tesla to Raise $2 Billion In Cash, Diesel Market Getting Stronger in U.S.

This is Autoline Daily reporting on the global automotive industry.

TRUMP THREATENS TO INCREASE TARIFFS ON CHINA
President Trump sent chills down the spines of auto executives when he threatened to more than double import tariffs on Chinese goods by this Friday. He also threatened to add another $350 billion worth of Chinese goods to the list that get hit by those tariffs. Automakers import a lot of parts and components from China, and this would drive their costs higher. A full-blown trade war between the U.S. and China would also hurt global economic growth. When Trump first imposed tariffs, China retaliated by slapping an additional 25% tariff on U.S. made vehicles, but it suspended that late last year as part of its trade negotiations. That tariff particularly hurt BMW and Mercedes-Benz, which export a lot of American made SUVs to China.

Here’s our Autoline Insight. Trump’s threats are the way he negotiates, and all this could get resolved this week. However, automakers hate uncertainty. It makes it difficult to plan ahead. And with the USMCA going nowhere, which is the replacement for NAFTA, there is a lot of uncertainty in the automotive industry right now.

TESLA TO RAISE $2 BILLION IN CASH
Elon Musk managed to reduce some of the uncertainty about Tesla’s finances. The company is going to raise over $2 billion by issuing more stock and selling more bonds. That will give it more than enough cash to get through the year. But Moody’s still rates Tesla’s debt at six levels below investment grade. Moody’s says the average Model 3 costs $55,000 and that Tesla will need to get that down to $42,000 to increase sales.

WEEKEND RACE RESULTS
In racing news over the weekend, Juan Pablo Montoya and Dane Cameron combined to win the Acura Sports Car Challenge at Mid-Ohio for Acura Team Penske. In NHRA, Steve Torrance won in the Top Fuel category in Atlanta. And the NASCAR race at Dover speedway was postponed due to rain and has been rescheduled for this afternoon.

DIESEL MARKET GETTING STRONGER IN U.S.
Last week we showed you how sales of hybrids, electrics and plug-ins are doing. BEVs and hybrids are going great, while plug-ins are sinking. But how are diesels doing? Better than you might think. Automakers sold 176,000 vehicles with diesels in the U.S. market so far this year, up more than 3% while the overall market is down 2%. And last month automakers sold over 46,000 diesels, up 9.5%, so it looks like the diesel market is getting stronger.

MOPAR SELLS OUT OF HELLEPHANT ENGINES
Speaking of piston engines, the possibility of getting their hands on a 1,000-horsepower engine proved to be too enticing for some customers. Mopar sold out of the $30,000 Hellephant crate engines in just 48-hours. It’s rumored to have built 100 examples and as of right now, there’s no word if it’s going to make any more. But with that kind of demand at that price, we say, what are they waiting for?

FORD & VW TRUCK PARTNERSHIP IN TROUBLE?
Ford and Volkswagen have talked loudly and boldly about how they’ll collaborate on commercial vans and midsize pickups. But it sounds as though the truck partnership could be in trouble. Wards spoke to VW of America’s senior VP of product strategy and he says the situation is “still a little bit hazy to be quite honest… There is some sort of opportunity that maybe a pickup collaboration could happen. That is something that’s still in the cards” The agreement could be seen more like, “Hey, let’s partner up, let’s share ideas.” He says VW would have to build a vehicle on a Ford platform, but it would have to look totally different, so Ford would still be competitive in the segment.

LA PROPOSES BOLD NEW EV GOALS
Los Angeles Mayor Eric Garcetti says he’s going to take on climate change. He set bold new targets to increase the number of electric or zero-emission cars in the city to 80% by 2035, up from 1.4% last year. The plan would increase the number of public charging stations from 2,100 today to 28,000 by 2028. And it would encourage citizens to drive fewer miles by increasing public transportation and charging drivers “congestion pricing” to drive through busy areas.

MAY MOBILITY LAUNCHES SERVICE IN PROVIDENCE
Along those lines, autonomous ride sharing is slowly but surely starting to spread. May Mobility, an autonomous startup based in Ann Arbor, Michigan, is launching a self-driving shuttle service in Providence, Rhode Island. It kicks off on May 15, will operate seven days a week and is free. The state is paying May Mobility $800,000 to operate the service. The company launched a similar service in Detroit and Grand Rapids, Michigan last year. These shuttles operate on a fixed route and only travel at low speeds, and for now they have a safety driver on board who can take over if there are any problems.

But that’s it for today, thanks for watching and please join us again tomorrow.