AD #3602 – NIO Launching Semi Solid State Battery; Geely & Renault Officially Merge ICE Ops.; U.S. Used Car Prices Drop

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

USED CAR PRICES DROP
Here’s some good news for anyone shopping for a used car in the U.S. Used car prices are falling fast. According to the Manheim Used Vehicle Value Index, which tracks wholesale used car prices sold at Manheim auctions, prices fell 4.2% in June compared to May, which is the largest drop since the pandemic began. If you compare it to a year ago, they’re down 10%. We think that used prices could be dropping because as new car inventory goes up, more people are deciding to buy new car instead of a used one.

UAW NEGOTIATIONS START THURSDAY
Contract talks between the UAW and the Detroit Three automakers kick off on Thursday, and we think these could be the most intense negotiations in decades. The UAW wants to end the two-tier wage system, it wants to restore cost of living adjustments, and it wants benefits that were cut when the automakers were bailed out during the Great Recession. One sign that the negotiations will be contentious is that UAW president Shawn Fain refuses to do the customary handshake with the corporate CEOs at the kick-off of the negotiations. He says he’ll shake their hands once they reach “a deal that reflects the needs of the workers.” We fully expect there to be a strike. The only questions are how long it will last and how damaging it will be?

RENAULT & GEELY OFFICIALLY MERGE ICE OPS
Last November, Renault and Geely announced plans to make ICE powertrains together and now they’ve signed a binding agreement to establish a new 50/50 joint venture. They’ll run 17 plants around the world with 19,000 employees that aim to make up to 5 million internal combustion engines and transmissions a year. The new joint venture will operate completely separate from its parent companies and will be free to develop whatever powertrains it thinks it needs to meet future demands. The engines will mainly be used in hybrid and plug-in hybrid vehicles and eventually they think they’ll be able to provide powertrain solutions for 80% of the global ICE and hybrid market. Not only will Renault and Geely buy the powertrains, but so will their partners, including Volvo, Nissan and Mitsubishi. However, the plan also includes adding more partners and supplying engines and transmissions to other 3rd party car brands. Gas and oil giant Aramco says it wants to invest in the joint venture and we expect more. In fact, we think we’re going to see a lot more of this. As ICE sales decline, the factories that make them will start to become unprofitable. The crossover point is when EVs hit about 20% market share. And that’s going to trigger a lot more consolidation in the powertrain business.

NIO LAUNCHES SEMI-SOLID STATE EV BATTERY
Solid-state batteries are about to hit the market. Chinese automaker NIO has updated its vehicle user manual to include its new 150 kWh semi-solid-state battery pack, which launches in its ES6 SUV this month. A semi-solid-state battery has one electrode with a liquid electrolyte and the other has a solid electrolyte, instead of both being liquid like most batteries today. The pack weighs 575 kilograms or a bit over 1,250 pounds. As you would expect, that’s heavier than its old biggest battery, which is 100 kWh. But it’s still the same size and the cells are also much more energy dense at 261 wh/kg. That’s about 45% higher than the 100 kWh pack. The ES6 with the new battery will have an estimated 930 kilometers or 577 miles of range. On top of being more compact, solid-state batteries offer faster charging and there’s still more gains to be made with fully solid-state batteries.

CHINA CAR EXPORTS SOARING
Car sales in China fell 2.9% last month compared to May, and exports fell 1.7%. Industry analysts say the Chinese economy seems to be recovering far slower from Covid lockdowns than they expected. Even so, for the first half of the year, China exported 2.1 million vehicles, up 75% from last year. That includes 534,000 EVs and PHEVs. Those exports are really helping automakers to keep their assembly lines humming.

RENAULT CHAIRMAN WARNS OF A “CHINESE STORM”
And many of those exports are headed to Europe, which is worrying automakers there. Renault’s chairman, Jean-Dominique Senard, told Reuters that, and I quote, a “Chinese storm” is gathering over Europe’s EV sector. He’s especially worried about China deciding to limit exports of gallium and germanium which are critical metals needed to make EVs and computer chips. Senard says that if there is a geopolitical crisis, European battery factories would grind to a halt if they can’t get the raw materials they need.

CHINA LIMITS EXPORTS OF GALLIUM & GERMANIUM
And getting back to those limits, China says it will stop exports of gallium and germanium beginning August 1st. That kicked off a global frenzy to stockpile as much of the metals as possible before those limits go into effect. But it doesn’t seem to be a permanent ban. Gallium and germanium producers have to apply for new export, and after that they will likely be able to resume shipping the metals. China would hurt its own electronics industry if it crippled Western companies. But it shows the power of China’s control of critical raw materials. Reuters reports that Chinese gallium companies drove most competitors out of business by underpricing them over the last decade.

TOYOTA TO MAKE FUEL CELLS IN KENTUCKY
Some people are skeptical of fuel cells, but some automakers are investing to develop the technology, including Hyundai, GM, Honda, Mercedes and Toyota. In fact, Toyota says it will start producing hydrogen fuel cells for heavy-duty trucks in Kentucky starting in December. It’s the first time Toyota will produce the system outside of Japan. The company didn’t say how many it will build in Kentucky but did say it will be in low volume. The company also revealed that it will introduce a next-gen fuel cell system in 2026 that will cut costs in half, increase range by up to 20% and improve durability compared to diesel engines. Toyota is targeting 200,000 fuel cell sales globally by 2030 and to help reach that goal, it will also start selling vehicles in Europe and China.

MAHLE MAKES COMPONENTS FOR HYDROGEN-ICE ENGINES
And speaking of hydrogen, German supplier Mahle announced it will supply engine manufacturer Deutz with components to make internal combustion engines that run on hydrogen. The first use will be for stationary engines starting in 2024 and in the future, the engines will be used in construction and agricultural machinery. But it shows that hydrogen can breathe new life into IC engines, even in a zero carbon world.

PAINT YOUR HOUSE THE COLOR OF YOUR PORSCHE
Now you can paint the walls in your house or office the same color as your Porsche. The sports car maker teamed up with paint company Backdrop to offer 4 colors that celebrate Porsche’s history. Those colors include Irish Green, Speed Yellow, Ruby Star and Riviera Blue. The paint comes in a custom designed can and also includes a Porsche 75 key chain to celebrate Porsche’s 75th anniversary. And that’s how much each gallon can costs, $75.

GAMIC WINNERS ON AUTOLINE AFTER HOURS
A group of retired automotive executives decided to help inventors and startups break into the automotive industry. So they started a contest to identify the best innovations out there. Contestants have to make their pitch to these execs, sort of like the television show Shark Tank. And then the execs pick the best of the best. It’s called GAMIC, or the Global Automotive & Mobility Innovation Challenge. And we’re going to have the 4 top winners on Autoline After Hours on Thursday. We think you’ll be blown away by what they’ve invented, so be sure to tune in.

But that’s all for today’s show. Thanks for joining us.