AD #3381 – People Hate Car Dealers Who Overcharge; Tesla Semi Ships This Year; Car Sales to Stop Growing In 2036

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

CAR SALES TO STOP GROWING IN 2036
New car sales are expected to keep going up and up and up, until they don’t go up anymore. And Bloomberg New Energy Finance predicts they’ll keep going up 14 years from now. That’s 2036. There’s about 1.2 billion vehicles on the planet today, and Bloomberg NEF says it will peak at about 1.5 billion. It’s all about demographics and urbanization. The average age of the people on the planet is going up, and more and more people are living in highly congested mega cities where owning a car can become prohibitively expensive. 

HONDA PROFIT PLUMMETS 73%
Honda turned in its latest financial performance and the numbers are dismal. It only sold 815,000 cars and trucks globally in the last three months. That’s down 18% from last year, which wasn’t a good year either. It brought in about $28.8 billion, which was actually up nearly 7%. But not a lot of that money made its way to the bottom line. Honda reported a net profit of only $1.1 billion, which plummeted 73% compared to last year. 

RUSSIA EXIT STRATEGY FOR MERCEDES, VW 
Russia’s auto industry pretty much collapsed after its invasion of Ukraine. And now Volkswagen and Mercedes are looking for exit strategies. VW, which is Russia’s largest foreign investor, wants to sell its assembly plant in the country. It may only get 450 to 600 million euros for it. A company called Asia Auto from Kazakhstan could buy it. Interestingly, the factory could make VWs and Skodas even though VW wouldn’t own the plant. Mercedes wants to sell off its remaining inventory in Russia but cannot do so because of sanctions. The deal would not include its plant, which suspended production after the invasion.

TESLA SEMI SHIPS THIS YEAR
After several delays, Tesla’s semi-truck will finally be available this year. CEO Elon Musk tweeted that 500-mile range versions will start shipping this year. But Musk wasn’t specific about when it will ship or who will be the first customer to receive it.

SANDY MUNRO ON AAH
We’ve got a great Autoline After Hours coming up tomorrow with Sandy Munro. How the heck did he go from being a tool & die maker to a YouTube sensation? Sandy has a lot to say about what’s going on in the auto industry today, and you’re not going to want to miss it. So join John and Gary when they go live tomorrow afternoon at 3 pm eastern time.

AUTONOMY ORDERS $1.2 BILLION OF EVs
Autonomy is a startup that lets customers get an EV with a subscription, and it just ordered $1.2 billion worth of cars. That will get it 23,000 EVs with 45 different models from 17 different car companies that operate in the US, including legacy automakers and startups. Autonomy is partnering with Autonation, the largest auto retailer in the US, to handle prep work and delivery of the cars. Scott Painter, the CEO of Autonomy, who was recently on Autoline, says that EVs are expensive and that a subscription doesn’t require any down payment or long term commitment, so it will speed up the transition to EVs.

EV FUTURE PRODUCT DEBUTS
Time for some news on future EV products. AutoForecast Solutions says that Polestar will start making the Polestar 3 at its plant in Charleston, South Carolina in October of next year. Then Rivian will fire up its new assembly plant outside of Atlanta in January, 2025. The first vehicle off the line will be the R2S, an SUV that’s designed for the European and Chinese markets. That’s followed by the R2R, which is a crossover station wagon, and then the RCV Cargo van, which is presumably built off the same platform as the other two, which is an all new platform for Rivian. Then BMW will start making battery electric SUVs at its plant in Spartanburg, South Carolina starting in 2026. That’s when the iX5 will roll off the line, followed by the iX7 in 2026 and the iX6 in 2028. These vehicles represent just the tip of the iceberg, and we’ll see a flood of EVs hitting the market in the middle of the decade.  

FORD RAISES LIGHTNING PRICES UP TO $8,000 
Good news for F-150 Lightning fans, Ford is reopening the order books. But here’s the bad news: prices are going up by $7,000 to $8,000. The entry level Pro model, which started just under forty grand, now costs nearly $47,000. The top of the line Platinum Extended Range is almost $97,000. Those prices don’t include destination charges by the way. Ford blames rising raw material prices on the increase. But we wonder, have raw material prices really gone up that much? Or with Tesla and Rivian boosting prices, did Ford think that as long as customers were willing to pay that kind of money, it may as well raise prices too?

FORD TO MAKE CARS WITH SUNSHINE
Speaking of Ford, it signed a deal with DTE Energy in Michigan to supply it with solar power. By 2025, DTE will add 650 megawatts of new solar power in the state for Ford, which means every vehicle produced in Michigan will be built with the equivalent of 100% carbon-free electricity. Ford says this deal will reduce CO2 emissions by as much as 600,000 tons.

FERRARI HIT WITH 17-YEAR RECALL
When you’re a small manufacturer like Ferrari you tend to keep some of the same parts around for a long time. While that saves money, it’s also leading to a recall that spans back 17 years. Over 23,500 Ferrari models, from as far back as 2005, are being recalled in the U.S. for a faulty brake fluid reservoir cap that doesn’t vent properly and could cause a leak. Thankfully the affected models just need a new cap and software update that pops up a warning light when the brake level is low. Thank goodness this is all free for the owner.

MERCEDES STREET-LEGAL F1 CAR
Mercedes kicked off production of its street-legal supercar with a Formula 1 powertrain, the Mercedes-AMG ONE. And like any car of this level, it’s not built in the same facilities as its standard vehicles. A new small series production facility was set up in the UK with the help of Canadian company, Multimatic, which are the same folks that build the Ford GT. There are a total of 16 assembly and testing stations to bring the entire car together, except for the powertrain, which is done by the F1 experts in England. At 1.6L the AMG ONE’s V6 engine almost looks comically small, but with a combined output of over 1,000 horsepower, this car will scream. 

PEOPLE HATE CAR DEALERS WHO OVERCHARGE 
U.S. car dealers are taking advantage of tight supply to charge way over the manufacturer’s suggested retail price. But that could come back to bite them. According to the research data company GfK, 80% of buyers in May and June paid at or above the suggested retail price. And those people are much more likely to talk bad about the dealer and even the manufacturer. GfK says 31% of the buyers who overpaid would tell others not to shop at that dealer, compared to 14% who paid MSRP.  And 27% of overpayers say they’ll never buy the same brand again versus 10% who paid right at MSRP. People that overpay are also less likely to go back to the same dealer for service. Have you overpaid for a new car lately? We’d love to hear what you think.

But that brings us to the end of today’s show. Thanks for tuning in.