AD #3461 – Tesla to Cut Production in China; Ford Dealers Mad at EV Plan; Cute EV Costs a Bundle

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

UAW READY TO BATTLE DETROIT 3
GM, Ford and Stellantis better get ready for a big battle with the UAW over next year’s contract negotiations. The union is holding elections for new officers, and while the full results are not in yet, it looks like dissidents are going to take control. And they’re already talking about a big fight over next year’s contract. They promise to reject any concessions, to reinstate cost of living increases and to get rid of tiered wages, which is where new hires start at $17 an hour and take 8 years to move up to $27 an hour. The Feds forced the UAW to change the way it elects officers as part of a settlement over a corruption scandal in the union, and that opened the door for a new slate of reformers to run for office. 

FORD DEALERS MAD AT EV PLAN
Ford is running into increasing resistance from its dealers on how it wants to sell electric vehicles. Several dealer groups say that Ford’s plan violates franchise laws. And even the NADA, or National Auto Dealers Association, is getting involved. Ford CEO Jim Farley says the current franchise system adds about $2,000 to the cost of a vehicle compared to Tesla’s direct sales model. He wants Ford to control the buying experience, and retail prices and move to a build-to-order process that gets rid of most dealer inventory. Dealers object to that and the amount of money they have to invest to sell electrics, and if this can’t get resolved through negotiations, look for lawsuits to fly.

TESLA SHANGHAI SETS PRODUCTION RECORD…
Tesla’s upgrades to its plant in Shanghai are really starting to pay off. It delivered over 100,000 China-made EVs last month, which is a record. That was 40% higher than the previous month and nearly 90% higher than last November. But amongst all brands BYD topped the EV sales list. It sold nearly 230,000 electrified vehicles, which was three times higher than last year. But that list also includes plug-in hybrids, not just BEVs.

 

…TESLA TO CUT PRODUCTION IN CHINA
Tesla probably won’t repeat the sales success in December that it just had. Reuters reports the EV maker will cut Model Y production in China by around 20% next month, which it says is due to inventory increasing at its fastest rate ever in October. We need more evidence to see if this is just a blip in the radar or an actual trend, but price cuts, vehicles pilling up and uncertainty over COVID lockdowns aren’t a good sign for Tesla in China. 

BIDEN PROMISES “TWEAKS” TO EV SUBSIDIES
The Biden Administration is proposing an update to the U.S.’s biofuel policy that will allow EV manufacturers to sell renewable fuel credits to oil refiners. Currently, oil refiners are required to blend biofuels into their fuel each year or they can buy credits from companies that do it for them. Under the new proposal, EV makers would be able to generate credits to sell to oil refiners, if they can prove the EVs they make are being powered by electricity produced from plants that burn biofuels. Since that is hard to track, the EPA would require manufacturers to set up contracts with renewable biofuel power generators, which would give the EV maker the exclusive right to generate credits for a specific amount of renewable power. And the EPA will conduct audits to make sure everyone is following the rules.

BYD TARGETS JAPANESE MARKET
Foreign automakers don’t sell many cars in Japan, but BYD is ready to break the door down. Back in July, the Chinese automaker announced it will launch three BEVs in Japan next year and now we know more. It will first launch its ATTO 3 crossover in January, with a starting price just under $33,000. Its Dolphin and Seal models go on sale in 2023 in 22 cities before expanding across all of Japan. By 2025 it plans to have more than 100 dealerships. This could be a real threat to Japanese automakers since they currently don’t have many EVs in their lineups.

CUTE EV COSTS A BUNDLE
This swanky, custom-built EV could be yours for half-a-million bucks. It’s called the Montage and will be assembled by California EV startup Alpha Motors. Roughly the same size as a Nissan Z car, the Montage is planned to be built on a custom-made EV platform, be powered by a custom-built drive unit that makes 150 kW or 200 horsepower and features a custom-built battery pack that provides around 250 miles or 400 kilometers of range. Approved applicants, to which Alpha says it already has 35, then have to go through a verification and customization process and finally have to put down a 50% down payment, or $250,000, at the point of sale before taking delivery, which will take a minimum of 6 months and won’t happen until sometime next year. Oh yeah, it’s also not street legal unless it can be registered as a specially constructed vehicle. We first heard of Alpha in late 2020 at which time it wanted to make more mass-produced models like the ACE and WOLF that were supposed to come out in 2023. But now it’s coming out with the Montage next year, which is supposed to make way for the mass-produced models. 

CHIPS SHORTAGE WILL STRETCH TO 2024
Even if automakers were able to get their hands on all the chips they had in 2019 today, they still couldn’t build as many vehicles as they did then. That’s the finding from the Federal Reserve Bank of Chicago. Kristin Dziczek (Dee-check), a policy advisor with the Fed, says cars now require more chips than they did just three years ago. That’s because consumers are buying more high end vehicles, with more features. ADAS tech, for example, is increasingly becoming standard equipment. And production of BEVs and hybrids is ramping up fast. Dziczek says things will not get back to normal until 2024 at the earliest. If you’d like to learn more We’ve got an interview with her and you can find the link to that in the transcript or description box.

 

VW CARIAD IS LATE & EXPENSIVE
Volkswagen’s software unit, CARIAD, which it launched to take on Tesla, ran into monumental problems and multiple delays. So VW had to scrap those plans and next week CEO Oliver Blume will announce its new software strategy. Germany’s Handelsblatt newspaper reports that Blume will explain how it will make the software unit competitive, and that it will hit the market by the end of the decade at a cost of 1 billion euros. That’s a lot of money the company did not expect to spend and we think that’s why VW dropped out of its investment in autonomous technology with Argo AI.

CADILLAC CELESTIQ CHIEF ENGINEER ON AUTOLINE AFTER HOURS
Want to learn a lot more about Cadillac’s $300,000 hand-built Celestiq? How about hearing what the chief engineer has to say about it? Join us this Thursday when Tony Roma will be our guest on Autoline After Hours. If you’ve got questions you’d like us to ask him, you can post them in the comments section or send an email to viewermail@autoline.tv. And while you’re at it, if you haven’t subscribed to our YouTube channel, please do so today. Autoline is one of the few sources that is able to get access to chief engineers like Tony Roma, and so we really value your support.

And that’s a wrap for today.