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Runtime: 9:14
0:00 Tesla Berlin Down Longer Than Expected
0:46 Japanese OEM Stocks Plunge on Interest Rate News
2:02 Automakers Investing Heavily in Brazil
3:21 GM Closer to Offering Military Vehicles to UAE
4:24 Volvo Dominates EV Heavy Trucks, But It’s Still Small
5:13 Drunk Driver Tech Won’t Work Without Public Support
6:13 Rivian Efficiency Gains Allow It to Cut Shift
6:44 2-Seat Tesla Exempt from Vehicle Tax in France
7:29 Buy a Tesla Get Free Supercharger Miles
7:59 South Africa Gets Its 1st Chinese Luxury SUV
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
TESLA BERLIN DOWN LONGER THAN EXPECTED
The attack by extreme environmentalists that shut down Tesla Berlin is going to take a bit longer to fix than originally expected. Tesla says the plant will be shut down until at least the end of next week. That means the plant will lose at least two weeks of production which would equate to about 12,000 vehicles. We estimate that represents lost revenue of about $600 million. Tesla might be able to make up some of that lost production with overtime. But the plant was already running flat out. So it could take many months to make up for that lost production.
JAPAN OEM STOCKS PLUNGE ON INTEREST RATE NEWS
Japanese automakers have benefitted greatly from the weak yen over the last few years. But the days of easy money may be about to start fading away. The Bank of Japan is considering raising interest rates from their extremely low levels. Get this. A 10-year bond yield is at 0%, and short term interest rates are actually negative, which means the bank pays you to borrow money. Since it made no sense to invest in the yen, it plummeted in value. Over the last 4 years, it fell 30% against the dollar. That weak yen helped Japanese automakers export cars at lower prices, and it bolstered their bottom lines thanks to extremely favorable foreign exchange rates. But even just a hint that the Bank of Japan might raise rates spooked the stock markets. Toyota’s stock dropped almost 3% on the news, Honda dropped almost 4%, Nissan was down 5.6% and Mazda was down more than 6%. That’s quite an impact, and it shows how much investors are worried about a stronger yen hurting the car companies.
AUTOMAKERS INVESTING HEAVILY IN BRAZIL
There’s so much focus on all the automotive investment pouring into Mexico that everyone’s missing how much investment is also pouring into Brazil. General Motors, Toyota, Volkswagen, Hyundai and Stellantis are making mega investments in the country. GM will invest $1.4 billion, Toyota is good for $2.2 billion, VW is going in with $1.8 billion, Hyundai will spend over $1 billion, and Stellantis will plunk down more than $6 billion over the next 5 years. All together that’s well over $12 billion. Brazil initiated a new decarbonization program called Mover and the automakers are reacting to that plan. Some of that investment will go into making electric cars. But since more than 80% of the vehicles sold in Brazil run on ethanol, most of it will go into making what are called bio-hybrids, or hybrids that run on ethanol.
GM CLOSER TO OFFERING MILITARY VEHICLES TO UAE
For the first time ever the military product arm of General Motors sent a vehicle to the Summer Trials in the United Arab Emirates, which is a pretty demanding on- and off-road test. The Infantry Squad Vehicle or ISV from GM Defense had to travel nearly 2,000 kilometers or over 1,200 miles across highways, sand dunes and rocky trails, sometimes loaded to its maximum payload. But it was able to finish and received its certification of completion, which is one of the steps required to see if the ISV can meet the technical and tactical needs of UAE Armed Forces and other regional countries. Just over a year ago, GM Defense signed a cooperation agreement with an entity of the UAE government to eventually deliver solutions to military, security and government customers from the region. This is part of GM’s larger goal to see its Defense unit generate $1 billion in revenue by the end of the decade.
VOLVO DOMINATES EV HEAVY TRUCK SEGMENT, BUT IT’S SMALL
Volvo Trucks dominates the electric heavy-duty segment in Europe. It ended last year with a nearly 50% share of the market and total sales were up 256%. But it’s not as impressive as you might think. Volvo Trucks doesn’t give the exact number of electric heavy-duty trucks it sold in Europe. However, it does give its global sales number, which was 1,977 units in 2023. So, that means with some number less than 1,977, Volvo Trucks was able to claim nearly half of the EV heavy-duty truck segment in Europe. By comparison, it sold over 143,400 gas and diesel trucks globally last year.
DRUNK DRIVING MONITORS WON’T WORK WITHOUT PUBLIC SUPPORT
Automakers are saying that the public has to be on board with any drunk driving detection technology that is mandated, or it will fail. The Alliance for Automotive Innovation, a lobbying group that represents most automakers in the U.S., told NHTSA that technology in cars that can detect drunk drivers “becomes a moot point if it is not accompanied with public awareness and acceptance.” The infrastructure law from 2021 mandated that NHTSA must issue a final rule by the middle of November to require that new vehicles must be equipped with technology to prevent drunk people from driving. NHTSA is still trying to figure out what the standards will be. Once it issues the final rule, it has to be standard equipment in all new passenger vehicles by 2027. But suppliers who are developing the technology have told Autoline they’re skeptical it will be ready by then.
RIVIAN EFFICIENCY GAINS ALLOW IT TO CUT SHIFT
Rivian is cutting the third shift at its plant in Normal, Illinois, but it’s not laying off any workers. About 8,000 people work at the plant. Rivian is shutting down the facility next month to retool it for greater efficiency and lower cost. And with that greeter efficiency, it says it doesn’t need the third shift. Even so, Rivian said that production at the plant will remain flat this year and it only expects to build 57,000 vehicles.
2-SEAT TESLA EXEMPT FROM VEHICLE TAX IN FRANCE
Tesla is dipping its toes into the commercial side of the business with its passenger EVs. It developed a 2-seat version of the Model Y for France that has over 2,100 liters or about 76 cubic feet of cargo space and 565 kilometers of range, which is about 30 kilometers or over 18 miles of range more than versions with the second row. In France commercial vehicles with 2- or 3-seats don’t have to pay the vehicle tax, which is 20%. Where it can, Tesla has already started replacing Chevy and Mercedes mobile service vans with its own models, so we could probably see similar vehicle upgrades in France.
BUY A TESLA GET FREE SUPERCHARGER MILES
In other Tesla news, it’s offering a bunch of free Supercharger miles to anyone in the U.S. who trades in a vehicle to lease or buy a new Tesla before the end of the quarter in March. Those that lease will get 5,000 free Supercharger miles and it’s double that or 10,000 miles for those that buy. We typically see a significant bump in Tesla sales at the end of every quarter and one way it does that is with incentives like these.
SOUTH AFRICA GETS ITS FIRST CHINESE LUXURY SUV
Chinese automakers continue to expand globally. Great Wall Motor is jumping into the luxury SUV segment in South Africa with a model called the TANK 300, becoming the first Chinese automaker to sell an SUV in the country. But Great Wall is no stranger to South Africa. It’s been selling vehicles there for 17 years.
And that brings us to the end of today’s show. But don’t forget to tune into Autoline After Hours at 3PM EST today to see if John and his guests can’t figure out this affordability problem for automakers. Thanks and hope to see you there.
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Rivian needs 8000 workers to make 57,000 vehicles. No wonder they’re looking for efficiency gains. GM’s Lansing Delta township plant makes over 100,000 vehicles with 2670 people plus 267 Salary on three shifts for a total of 2937. Even if you add another 1000 for engine assembly and 1000 for transmission your still under 5000 people.
Weren’t we told EVs were easier to assemble and needed less labor. Hum Might need a deeper dive into that.
I’m unclear how a drunk driving detection system fails, due to not getting public acceptance and support? I mean when the NHTSA pushed for airbags there was no campaign to educate the public and get their buy in? In fact, I don’t remember the publics acceptance making a difference on ABS, seatbelts, power brakes, crumple zones, collapsable steering columns or the 100 other safety items that have been mandated. I am, however not in favor of having everyone pay for systems to be installed on all vehicles that only apply to certain people that are the problem. But we are in a society where one person tries to light their shoe on fire on a plane and now everyone is required to remove their shoes to board.
What I think the Alliance for Automotive Innovation is really worried about is people will just refuse to buy a vehicle with this feature. Sending the automotive industry into a downward spiral. Cars are expensive enough I think we can do without this feature.
Rivian is not only announcing the R2, but also the even-smaller R3!
Didn’t expect that!
Update – the R3X too (the performance R3)!
Lambo, nearly everyone would highly object to having to blow in a tube, or however it would work, every time they start their car. Both drinkers and non-drinkers would hate it. Those other safety related items add a little to the price of a car, but most inconvenience no one. You don’t even need to go through the inconvenience of putting on a seat belt if you don’t want to, though you can get fined in some places. Remember seat belt interlocks? Those didn’t last long, because they were too much inconvenience for those who didn’t want to wear seat belts.
Yeah, if the breathalyzers go into cars, I suspect a lot of people will “buy early” to avoid it, and then there will be years of very slow sales. I might do that myself.
I would have thought that Tesla would have gigajoules of solar all over their gigafactory producing gigawatts of electricity and not needing the grid. Or is it as expensive as the solar roof they sell?
I think GM will find there’s more money in military vehicles than driverless taxis.
Drunk driver tech is a waste imho. Most people picked up for drunk driving around here are driving older or borrowed vehicles. It’s a societal problem, like smoking. Big fines, license suspension and most importantly 30 day or more vehicle impounding (even a borrowed one).
Lambo,
I agree. The public acceptance is how to pay more for a feature that does nothing for them. At least with Airbags, crumple zones, seat belts there was an assignable improvement to the person buying the car. They were willing to pay because it benefited them directly in case of an accident. This drunk driving tech is likely to add yet another $1000 to the cost of a car and it has zero direct benefit to 95% of the people buying the car. It is also likely to fail and in a manner that will not allow the car to be driven. Thus you will have to pay to fix a feature that has zero benefit to you.
You also can’t market the feature because it has no benefit. At least with airbags you could market about being surrounded by pillow soft bags in case of an accident and thus reduce/eliminate injuries. What do you market about this drunk driving tech? Here is a feature of no value to you because you do not drive drunk, but pay for it anyhow. That is not marketable. The only marketable thing is to say that you have to pay for a feature that may benefit you as a driver if it reduces drunk driving accidents, which it will not. Most drunk drivers will just drive their 1992 Ford Ranger and run into you all the same. So the net result is you spending more money on a car at a time when people are pulling back from buying any new cars because they are all too expensive. This is a non-starter and an election away from beign a moot point.
I can’t imagine requiring blowing into a tube. For hygiene reasons you’d have to change the plastic tube with every use. Just when we’ve switched away from plastic straws too.
Albemarle, yeah, probably true. I doubt if anyone has a very good idea about how they’d actually do the alcohol test. As others have said, it would probably be unreliable, and probably not very accurate. People would get no-starts at .07%, and others would be good to go at .15%. Unless this is easier to do than I’d expect, I suspect it will not happen.
I happen to a little about the drunk driving issue. I retired a few years ago, so my knowledge may be a little “old” and won’t try to cite exact numbers (that may have wiggled a bit in the past few years).
1. The vast majority of drunk driving tragedies are from repeat offenders, known to the judicial system.
2. Breathalyzers are very easily defeatable by “professional” drinkers. They simply blow into a balloon before entering the bar or party. Then expel the balloon contents into the breathalyzer.
3. Passive alcohol detection systems focus on airborne or transdermal detection. Airborne detectors can be tripped via the alcohol in mouth rinses. Transdermal detectors also have issues (inconvenience of having to remove winter gloves; false positives from hand cleansers).
The most societal-efficient way to address the problem is to focus of the repeat offenders. Adopt a smart driver’s license that is read passively by the vehicle (just like the vehicle senses the key in your pocket/purse). Restrictions are coded into your driver’s license. If convicted of drunk driving, the judge simply orders the DMV to re-program your driver’s license. This system also can be used for teen learner permits and other conditions like night blindness. A side benefit can be anti-theft.
As for older cars that drunks typically drive, the judge orders an OBD dongle that provides the same function as a passive gateway to the vehicle ignition… and can be periodically monitored by the courts.
Well, a constructive solution seems pretty straightforward to me. Since it’s mostly repeat offenders that warrant attention, cars only need a software interface capable of receiving commands from an externally mounted, tamper-proof testing device. Akin to wireless entry, but for ‘ignition’. Then have courts decide whom to impose it on.