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Runtime: 12:19
0:42 Price Cuts & Downtime Really Hurt Tesla
1:43 Cybertruck Launching in November
3:39 GM & Honda Taking Robotaxis to Japan
4:51 Honda’s Work AVs Could Help Airports
6:24 Silverado EV Delayed By a Year
7:24 Hyundai Cuts EV Lease Prices
7:55 Lucid Struggling to Hit EV Targets
8:34 GM Dealers Overcharging for Blazer EV
9:16 Stellantis Bundles Its Commercial Operations
10:18 Toyota Shows Modular Truck Concept
10:51 Hyundai Group Carving Path to eVTOL Service
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
It’s Day 35 of the UAW strike and all’s quiet on the labor front. No major developments to report, though Ford did lay off another 150 workers at an axle plant. But even though there’s a lull in the action, stay tuned. You never know what UAW president Shawn Fain could do next, and that’s going to be one of the topic’s on Autoline After Hours later today. We’ll have labor expert Bob Chiaravallli, who has great insight into how this strike is developing and how it could end up.
PRICE CUTS & DOWNTIME REALLY HURT TESLA
Meanwhile, there is big news from Tesla, which reported its third quarter earnings yesterday, and while analysts expected lower revenue and profits, the numbers were still a bit of a shock. Tesla actually sold 27% more vehicles in the quarter compared to a year ago, and total revenue came to $23 billion, which was up 9% from last year, but net profits came in at only $1.8 billion, down 44% from a year ago. And Tesla’s operating margin was only 7.6%, a massive drop from the 17.2% it had last year. Obviously, price cuts and planned production downtime really took their toll and the stock price fell almost 7% on the news.
CYBERTRUCK LAUNCHING IN NOVEMBER
We always learn a lot when Elon Musk conducts an earnings call with Wall Street analysts, and here are some of the highlights we picked up on:
– Elon really played down expectations for the Cybertruck. He emphasized how complicated it is to build and predicted it will take up to 18 months before it reaches volume production and becomes cash flow positive. “We dug our own grave with Cybertruck,” he told analysts. He said the Cybertruck will not hit full line speed until 2025. But he also said it’s “our best product ever,” and pointed out it has 1 million reservations for it.
– Elon said he is deeply worried that high interest rates are making cars less affordable, and admitted that Tesla has started to advertise more, something that he used to brag that they never had to do.
– Tesla is still going ahead with the plant in Mexico, but Elon says it’s not going to go flat out, and will watch the world economic situation and interest rates to decide how fast or slow it will go.
– But it wasn’t all negative. Production of 4860 batteries in Texas were up 40% in just the last quarter. That’s largely thanks to cutting scrap by 40%. And cells in the Cyber Truck have 10% more energy density than the ones in the Y.
– The company continues to make impressive gains in cost reduction. The average cost of a Tesla is $37,500, which is about $2,000 less than it was at the beginning of the quarter and despite planned factory downtime.
So, it wasn’t a good quarter for Tesla, but it wasn’t the end of the world, either. Now we’ll have to see how and if the company can get back to its impressive growth rate and its industry-best margins.
GM & HONDA TAKING ROBOTAXIS TO JAPAN
GM and Honda are doing a lot together. They’re jointly developing fuel cells, and working on autonomous vehicles. Here’s the latest. Honda, GM and GM’s AV unit Cruise are forming a new joint venture that will offer driverless taxi rides in Japan in 2026. Initially, “dozens” of Origins, Cruise’s purpose-built robotaxi, will offer rides in central Tokyo, but they’ll eventually grow that to a fleet of 500. Users will have to go to specific pickup points before being taken to their destination and will handle everything from hailing to paying for a ride through a smartphone app. Honda’s initial investment in Cruise was $750 million, but that will grow to $2 billion over a 12 year period to help develop the technology. In 2021 Cruise started sending autonomous Chevy Bolts to Japan in preparation for the new business they just announced that’s coming in 2026. All of the Origin shuttles for the new JV will be made at GM’s Detroit-Hamtramck plant in Michigan.
HONDA’S WORK AVs COULD HELP AIRPORTS
Speaking of Honda and AVs, it’s expanding use cases for its autonomous work vehicle prototype. It’s shown how it can help out on a farm and now it revealed how it can take over repetitive tasks at an airport. The vehicle is electric and can operate on its own or a human can take over with a remote control and even program in certain routes that are driven a lot. It’s capable of carrying up to 400 kilograms or 880 pounds and towing 750 kilograms or over 1,650 pounds, which makes it suitable for lawn mowing or carting around heavy loads. Honda didn’t reveal the battery size, but says it has a range of up to 45 kilometers or 28 miles. The autonomous work vehicle was first shown in 2018 and Honda says it’s currently doing field tests with the hopes of bringing it to the market one day.
SILVERADO EV DELAYED BY A YEAR
One casualty of the UAW strike could be GM’s EV timeline. It’s delaying production of the Chevy Silverado EV at its Orion plant in Michigan by one year. The truck was scheduled to go into production late next year but now it won’t start rolling down the line until late 2025. GM is delaying production “to better manage capital investment while aligning with EV demand.” Translation: this strike is costing us a lot and we’re not as optimistic as we were before on how many people will buy an EV. The Orion plant also builds the Chevy Bolt but it’s going out of production at the end of this year, meaning the plant could be idled for two years. The Silverado EV is also built at GM’s Hamtramck plant in Michigan. Currently they only make the Work Truck version, while the retail version starts later this year.
HYUNDAI CUTS EV LEASE PRICES IN THE U.S.
GM isn’t the only one thinking that EV mania is cooling off. Hyundai cut the lease price of the IONIQ 5 and 6 in the U.S. by $50 a month. So an IONIQ 6 is now $299 a month and the IONIQ 5 is $349 per month for 36 month leases. That means the IONIQ 6 is now $44 a month cheaper than leasing a Tesla Model 3.
LUCID STRUGGLING TO HIT EV TARGETS
And even the rich are not as keen on EVs as they were just a while ago. EV startup Lucid only delivered 1,457 Air sedans in the third quarter, just slightly ahead of the 1,404 it delivered the previous quarter. However, production slipped to 1,550 vehicles in Q3 down from the 2,173 units it built in Q2. So with GM delaying Silverado EV production, Hyundai cutting EV lease prices and Lucid’s weak sales, it could be a danger sign for EV sales in the U.S.
GM DEALERS OVERCHARGING FOR BLAZER EV
But car dealers could be a big part of the EV problem. Some GM dealers are significantly marking up the price of the new Chevy Blazer EV. According to Cars Direct, several GM dealers in the U.S. are charging as much as $10,000 more than the MSRP. With the $7,500 federal tax credit, the starting price should be below $50,000 but with the markup, customers will have to fork over more than $70,000. GM and Ford have had issues with dealers doing this with EVs in the past and we think it’s ridiculous it’s still happening.
STELLANTIS BUNDLES ITS COMMERCIAL OPERATIONS
Stellantis is taking a page out of Ford’s book and is carving out its commercial vehicle division. Called Stellantis Pro One, it will cover several brands including, Citroen, Fiat Opel, Peugeot, Ram and Vauxhall. In addition to commercial vehicles, the new business will offer fully connected vehicle technologies, which Stellantis expects to generate 5 billion euros in revenue a year by 2030. By the end of this year, 100% of its new vehicles will be connected and by 2026 they will all have over-the-air update capabilities. Stellantis expects that 40% of its commercial vehicle sales will be BEVs by 2030 and it’s also partnering with a company called Qinomic to electrify older models in customers’ fleets. And as part of the launch, Stellantis will reveal a new van lineup for each brand on Monday, including a hydrogen powered vehicle.
TOYOTA SHOWS MODULAR TRUCK CONCEPT
Toyota is showing off yet another concept for the Japan Mobility Show. The IMV 0 is a modular truck that’s about 17 feet long and less than 6 feet wide. Toyota doesn’t say what kind of powertrain it has, but shows how it can be modified for a number of applications, from a food truck to an ambulance and even an extra cab on the back to expand its two-seat passenger capacity. The Japan Mobility Show kicks off on October 26th.
HYUNDAI GROUP CARVING PATH TO eVTOL SERVICE
The Hyundai Group plans to launch an eVTOL service and is making a couple of moves to get there. Its air mobility division, called Supernal, announced a partnership with Korean Air for help in designing and testing eVTOLs or electric vertical takeoff and landing aircraft. Supernal also announced another partnership and this one is to design and manufacture a landing gear system for the aircraft. It plans to launch eVTOLs in the U.S. in 2028, followed by Europe shortly after that.
But that’s it for today, thanks for watching.
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Americans love trucks and they have a decent profit margin so why not make EV trucks? As they are finding out most people don’t want an EV regardless of incentives or that it’s a truck. Ford cut the lightning plant down to 2 shifts, GM postponing a whole year, Tesla dragging their feet on Cybertruck. Maybe they are realizing that an electrified truck is not the answer. EVs have their place and do make a great supplement to our transportation needs. Trucks are just not the ticket. As I said a long time ago, they made them only because they can package the batteries easily and already had the price range, they needed to be in. Not because anyone was asking for it to be built. How about forget autonomy and all the gadgets and just make an affordable EV that the average American can use as a work car while we keep our SUVs and trucks for the heavy hauling and trips.
I’m thinking a modern day, Beetle (concept, not looks). Simple not a lot of frills and affordable. Maybe go back to something offered in a 2 door and 4 door so it can be a just go-to-work vehicle or 4 doors if it has to do some family functions. But they keep thinking of EVs as a replace all ICE type vehicle and right now its not.
I’m sure China will figure this out.
Dealerships have a history of selling over MSRP for vehicles in demand. Frustrating especially when limited editions would get released. Just making people look forward to the direct sales model even more. They do it because they can, and someone is willing to pay over MSRP. However, if the dealerships didn’t do it private buyers would do the same thing. Just buy it to turn around and sell it for what the market will bear. Maybe with the direct sales they can put in a requirement that the vehicle has to be kept for 12 months or something like that.
I’m with you Lambo. This is the huge reason I’ve held onto my Reg cab , short box 1998 F150. It’s a basic truck no PW or PL . It does have CC . Other than that it is a base model That does everything I need it to do. 225,000 miles strong . Manufacturers just keep making bigger vehicles with more content that can charge for. Spending 80 K on anything isn’t happening for me .
It’s interesting that people keep saying that EV sales are tanking or that Americans just don’t want EVs. Yet, the reality is that EV sales in the US are way up from their level last year and have been rising significantly for the last four years. In November, US EV sales will surpass one million units for the first time, and that is with Tesla market share dropping to approximately 50%. As more lower-priced EVs hit the market and prices of existing EVs drop, sales will continue to gain momentum.
The dealer markup is more evidence that there is strong demand for EVs, especially new models with the latest advancements and longer ranges. If there was not strong demand, the dealers would not add the markup. It’s also likely that the supply of Blazer EV and Equinox EV is going to be limited for a while longer as GM works to resolve its Ultium battery production issues and ramps up output volume. The markups will disappear once those supply issues are addressed.
Direct sales won’t be a fix for the market forces of supply and demand. How many times has Tesla raised and lowered prices in the last two years? I don’t see other OEMs being immune to the siren song of higher profits either. In the not too distant past, the traditional Big 3 automakers have launched limited production vehicles with eye-popping price tags. In some cases, (Cadillac ELR), they had to offer huge rebates to sell them when the public pushed back on their outrageous pricing. People like to blame the dealers, but they are simply participants in our free market economy. And, I don’t recall anyone ever complaining about the price being too low when a dealership is forced to dramatically discount a slow seller to move it off the lot. The market forces of supply and demand go both ways.
In 3 months we will know for sure how the Cybertruck sells. Too much premiums, or sitting on service center lots price cuts but we will know for sure.
3) I agree.
In addition, time after time people champion an inexpensive simple car. When manufacturers introduce them, like the Nissan Micro or Mitsubishi whatever, they just don’t sell. All the hullaballoo about the Wooling car from China – you’d be lucky to sell a couple hundred in North America to people who enjoy quirky.
People buy what they want to buy (fortunately). That the North American market is SUV (whatever that means nowadays) and pickups is what people want.
As an aside, am I the only person in North America that wants a choice of interior besides black and grey? Don’t even get me going about a little coloured stitching!
EV trucks would work well for many, or most people in the US who buy trucks, but those people just don’t want them, Their being expensive doesn’t help.
Albemarle, I agree about interior colors. When my parents ordered a 1966 Dodge Coronet, about 6 interior colors were available. 4 or 5 were available when I ordered a 1974 Plymouth Duster. Also, there used to be a lot more paint colors. Now, there is black, white, a few shades of grey, and maybe one shade each of red and blue. If you order a Rolls or Bentley you have more choice, but most of us can’t afford those.
As far as direct marketing, that will happen some places, but not others. In Florida, the dealer association owns state government, so car companies can’t sell directly, or even limit markups. Also, dealers get a cut of manufacture subscriptions that the dealer wasn’t even involved with. There is the Tesla exception, though.
GM Veteran There are also a lot more choices of EVs than a year ago. What we need to know is what is the next vehicle purchase going to be another EV or back to ICE ? Seeing the dissatisfaction people are having with the Lightning and I guess will have with other EV truck choices. Anyone who wants to use it as a actual truck and not a giant sedan with a enormous trunk will more than likely go with ICE . I have a feeling the Cyber truck will have a brief sales surge initially and then fall off a cliff once the early adopters get theirs . I feel a lot of this talk of EV sales surge is partially propaganda to further we have to all switch or die BS being thrown out by governments .
Albemarie, That is because people want a real car not a box with 4 tires. Back in the day you could order any model with as much or little as you wanted . Today you get what they want you to buy. . You used to be able to order individual options not packages with 5 things you don’t want or need to get the one thing you want. You weren’t limited to a death box that is still twice what it should cost.
GM vet; I agree that sales on EVs will continue to grow and like I said they have their place. I think the EV city vehicles and fleets make sense. Even as a second vehicle in most households they will work. It was announced they want no more ICE sales by 2035 which means sales need to increase 7.7% each year to be on target. That means by 2025 EV’s should make up 30.7% of new car sales. I just don’t see that happening. If they looked at it as EV’s replacing 60% of all new cars, then sales will increase about 4.6% a year. Thats about where I see us ending up.
As for your reasoning behind the Blazer mark-ups you answered that yourself. The price is inflated due to shortages from the manufacturer. There is a small demand but not enough to drive up the cost. The scarcity of getting them has not kept up with demand. Like you said soon as they get back to normal production the cost will drop. If majority of people want an EV the price of the Blazer will stay inflated even after production resumes.
Lightning is in the top category for “owner satisfaction” in CR’s surveys, even though reliability is 2 or 5. Yeah, those people probably don’t use them for towing 26 foot RVs on long road trips.
I suspect a lot of people who went from EVs back to ICErs didn’t have home charging, and quickly found that having an EV without home charging is not very convenient. Also, charging is not particularly cheap, if you need to depend on public charging.
Albemarle; There have been a bunch of cars that sold well, and some are referred to as garbage. But what you need to ask yourself is what made them appealing in the first place? Vehicles like; Gremlin that sold 671,000, PT cruiser that sold 1.1 million. The original Mustang and even the worst one of all, Mustang II which sold 1.1 million Chevy Citation 1.6M, Vega 2 M, Pinto 2.2M, Chevette 3.M, Escort, Cavalier, Camry, Civic, Accord and even the Model T. 15 million. All were basic affordable cars and mostly compact. So they can sell but they need be more than a box on wheels. Or maybe not I just remembered the Dodge Omni / Horizon also sold like 2.2 million.
They have to be a good value to sell and I just don’t think they can make an EV at an entry level affordable price yet.
Take that Omni for example. In 1985 it could be bought for $5995 and the average price of a car was $11,838 so about 1/2 when most everyone still drove cars. Today average price is 48K and half would be 24K probably less if you were comparing cars and not so many trucks and SUVs. The manufacturer that offers a basic but decent EV in that price range will be killing it. I just dont think it will ever happen because they insist on loading the vehicles up with unwanted content to increase profits. No reason a vehicle should double in price just by option packages.
They all have these super low base price that you cant get and level 1 trim jumps the price up by 25%. Just games.
“Average” prices have gone up partly because of packages, which I don’t like either. Also, though, average prices go up, because as the rich get richer and poor poorer, more “loaded” big pickups and SUVs, and more Lexi, Benzes, etc. are in the mix. Then, there are the $100K+ Escalades and Grand Wagoneers that run up the average.
A base Camry or Accord is under $30K with all of the convenience features only in “luxury” cars of not too long ago.
Really lively Autoline After Hours this afternoon. I thought John and Paul Eisenstein were about to have another “Malice at The Palace” within the first 10 minutes of the show 😉 Great perspectives on this drawn-out, rhetoric-filled bargaining issue though.
Yeah, until batteries get cheaper, EVs will cost more than ICErs of similar size. For now, people probably buy them mainly because they like the way they drive.
MJB, I missed the first part, but heard most of it. I’ll play it later. John did a really good job of pointing out what I saw as a GM employee.
There presently are certain sweet spots for EVs (manufactured outside of China), where their characteristics and price intersect optimally. I don’t think we’re there when it comes to privately owned trucks.
Cadillac has a globally attractive product in the Lyriq, and it elicits quite a lot of interest. gm badly needs to get battery output up, noone’s waiting around for domestic industry.
It was a big struggle for Tesla, but they were focused and worked through the problems with a lot of urgency – because the company’s survival was at stake.
By the way, actual usage data from PepsiCo shows that the Tesla Semi is up to long-distance hauling. And there’s little downtime in varied daily operations. I’m pretty amazed, and am beginning to suspect that contrary to expectations, this rather than the overweight, overdesigned, and ‘over-specced’-by-necessity Cybertruck will create waves down the line.
They both first need to get up and running, with cell supply to match. 2-3 years at least before we can reliably start judging.
The Cybertruck is ugliest truck ever conceived.
My local Ford dealer has one Lightning in stock, upper-middle “Lariat” trim level. MSRP is $74K. That would buy a very well equipped ICE truck. While an EV would work well for some pickup owners I know, including those who could afford almost anything, I don’t hear them saying they want an EV. They mostly have Chevy/GMC, so I’ll find out if they seem interested in the Silverado EV when it arrives.
For 74K you can get a slightly used low mileage Raptor or TRX which is basically the top dog of truck trim.
But if you really want an EV you can get 2 model 3’s for that price. Seems unreasonable
The off-road oriented Raptor and TRX would appeal to different people than the Lightning, except for acceleration. I agree, though, that the Lightning is pricey, and I doubt if the one for $74K is completely “loaded.” The Lightning has a frunk, though.
I suspect the TRX will appreciate well, since its Hellcat engine is going away soon. I’ve read that the TRX will continue, but with the turbo inline six of ~500 hp.