AD #3804 – U.S. New Car Sales Drop in April; Audi’s Q1 Profits Plunge; Ferrari Launches New V12 Powered Cars

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

EU INCHES CLOSER TO IMPOSING TARIFFS ON CHINESE EVs
It sure looks to me like the EU is paving the way to slap higher tariffs on Chinese EV imports. In October of last year, the European Commission launched an investigation to see if Chinese automakers are benefiting too much from EV subsidies. The worry is the automakers are getting subsidies in their home market to make the EVs, then shipping them to Europe where they get additional sales subsidies, which gives the Chinese automakers greater pricing flexibility and that would have a negative impact on the European car industry. The Commission requested information from several Chinese companies that sell EVs in Europe and so far, it says BYD, Geely and SAIC have not provided it with enough info. That’s not too surprising because Chinese officials said when the investigation was launched that the EU was asking for too much. And if the Commission determines that it hasn’t gotten enough info, it can use “facts available” from other sources to calculate its tariffs. European rules say that it can impose provisional anti-subsidy duties nine months after the start of the probe, which was 7 months ago. So, I expect to see some fireworks in early July for more than one reason.

U.S. NEW CAR SALES DROP IN APRIL
New car sales in the U.S. dropped more than analysts were expecting in April. According to GlobalData, automakers sold 1.32 million vehicles last month, down 3.9% compared to a year ago. They were expecting a 2% drop in sales due to one less selling day compared to last year. The seasonally adjusted annual rate or SAAR came in at 15.7 million vehicles. That was slightly ahead of March and about the same as April 2023. Car sales in the U.S. had grown year over year for 20 consecutive months but April broke that trend. And while analysts expect sales this year to be sluggish compared to last year, they are projecting that sales will range anywhere from 15.7 to 16.1 million units, compared to 15.6 million last year.

RIVIAN RECEIVES INCENTIVES TO EXPAND PRODUCTION
Rivian is getting a bunch of money to expand its factory in Normal, Illinois. The state is providing the EV startup an incentive package worth $827 million, including $75 million for a deal-closing fund, $634 million in tax incentives and the rest will go towards a second training center. As part of the deal Rivian has to add at least 550 jobs in the state over the next 5 years, maintain at least 6,000 jobs and invest $1.5 billion in its manufacturing operations. That shouldn’t be too hard for Rivian. It currently has around 8,000 employees in Illinois and said earlier this year it would spend about $1.75 billion on capital expenditures, including plant expansion. But that $634 million tax incentive is over a 30-year period, so it’s only a little over $21 million a year. No doubt it will happily take the money, which it will use to build its all-new R2 model, but it really is a drop in the bucket in terms of what it costs to upgrade a plant. Rivian had just under $8 billion in cash and cash equivalents at the end of last year and it will certainly have to start dipping into that piggy bank at some point.

TESLA SUES INDIAN BATTERY MAKER OVER COPYRIGHT INFRINGEMENT
Tesla is suing an Indian battery maker over copyright infringement for using the name “Tesla Power” to promote its products. The automaker says it sent a cease and desist letter to the battery maker in April 2022 but it has been unsuccessful in stopping it from doing so. Tesla Power says it’s not infringing on the automaker’s name because it makes lead acid batteries and has no intention of making electric vehicles. Tesla is seeking damages and a permanent injunction against the battery maker. The case will head to court later this month and it will be interesting to see what happens.

AUDI’S Q1 PROFITS PLUNGE
The Audi Group, including Bentley, Lamborghini and Ducati, really got hammered in the first quarter of the year. Deliveries came to just over 402,000 vehicles, which is a decline of about 4.7% compared to last year. It said it was particularly affected by supply chain issues for vehicles with V6 and V8 engines. And because those are usually its higher priced models it really impacted Audi’s financial results as well. Revenue came in at 13.7 billion euros, down 18.7%. Operating profit slipped to 466 million euros, a massive drop of over 74%. And its net profit ended the quarter at 736 million euros, which is another big drop of more than 58%. Despite those poor results, Audi still expects to hit its financial goals for the year. Availability of vehicles with V6 and V8 engines will improve throughout the year and the Group plans to launch 20 new models over the next two years.

RENAULT SEES BIG BUCKS IN REMANUFACTURED PARTS
Renault sees big potential for its remanufactured parts division, which it just renamed THE REMAKERS. At one of its plants in France, it takes in old cars, removes parts, cleans them, sometimes rebuilds them and then sells the parts, which are usually about 30% cheaper than new. THE REMAKERS already offer more than 11,000 parts, including engines, transmission, electric motors, power electronics and infotainment systems. Renault says it wants to grow this business by 50% by the end of the decade because by that time it estimates the total replacement parts market will generate 8.2 billion euros.

RENAULT INTRODUCES NEW SYMBIOZ SUV
And speaking of Renault, it’s expanding its lineup of compact crossovers with the introduction of the Symbioz. The model shares a platform with Renault’s Arkana fastback SUV. They also share a hybrid powertrain, a 1.6L inline four-cylinder with two electric motors. The primary motor makes 36-kW and the secondary unit is 15-kW. The total setup produces 145 horsepower and has a range of 1,000 kilometers or 621 miles. Renault says non-hybrid versions of the Symbioz will be available later. It now has four small entry level crossovers, the Symbioz, Arkana, Austral and Scenic and while that sounds like a lot, the compact SUV segment is the second-largest in Europe and more than 511,000 were sold in the first quarter.

FERRARI LAUNCHES NEW V12 POWERED SPORTS CARS
Earlier this week, Aston Martin announced it is not dropping V12 engines from its lineup and is coming out with a redesigned version that will likely debut in the new Vanquish. But it’s not the only luxury sports car maker hanging on to V12s. Ferrari just introduced a new model that’s powered by a naturally aspirated V12 engine. It’s offered as both a coupe and a convertible. The coupe is called the 12Cilindri, which is replacing the 812 Superfast. And the convertible is the 12Cilindri Spider and replaces the 812 GTS. The models are powered by a 6.5L 12 cylinder gasoline engine that produces 818 horsepower. The coupe will be available first and goes on sale in Europe in the fourth quarter of the year. It will arrive in the U.S. in early 2025. Pricing for the coupe starts at €395,000 or $418,700 and the convertible costs €435,000 or about $470,000.

But that brings us to the end of today’s show. Thanks for tuning in and I hope that you have a great weekend.