AD #3833 – Shareholders Approve Musk $56B Pay, He May Not Get It; Fast Chargers Don’t Hurt EV Batteries; 4 Most Expensive Cars To Maintain

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

TESLA MODEL Y #1 WORLD SELLER
Once again, Tesla had the best-selling car in the world last year. According to JATO Dynamics, Tesla sold more than 1.2 million Model Ys, up 64%. The Toyota RAV4 was number 2 with just over 1 million sales. And it was followed by the Honda CR-V. Toyota takes the next three spots with the Corolla, Corolla Cross and Camry. The Ford F-150 ranks number 7 with 623,000 sales. Toyota shows up again with the Hilux at number 8. The Nissan Sentra was next with 534,000 sales. And Tesla bookends the Top 10 with Model 3 which sold 503,000 units.

STELLANTIS PIVOTS SOURCING TO LOW-COST COUNTRIES
Stellantis held its Investor Day presentation yesterday at the headquarters for its North American operations in Auburn Hills, Michigan. And it probably held the meeting there because North America delivers most of the company’s profits. But it’s also where the company is running into its stiffest headwinds. It has the worst relations with suppliers in the business. Dealers are complaining that inventory and prices are too high. Sales, profits, market share and margins are falling. And a number of senior executives left the company. CEO Carlos Tavares blamed himself, saying it was his own arrogance that led him to ignore the problems until they started getting out of control. He presented a plan of how he’s going to turn that around. And one thing is crystal clear. Outsourcing to low-cost countries is a key part of that plan. Stellantis has already diverted €41 billion of business to suppliers in countries like Morocco, Turkey, Algeria, South Africa and Egypt. And it plans to move even more business there. Autoline has heard that existing suppliers are being told to cut their prices 30% or future business will move to low cost countries.

FAST CHARGERS DON’T HURT BATTERIES
Using fast chargers for your electric car will destroy the battery over time, right? Well, that’s the conventional wisdom. But a new study from Recurrent says that’s just an urban legend. It looked at more than 13,000 Teslas in the U.S. and found that there was no statistically significant difference in range degradation between fast charging more than 70% of the time and fast charging less than 30% of the time. However, many drivers don’t fast charge frequently. Only 344 of the Teslas it looked at used fast chargers more than 70% of the time. The Tesla models were from 2012 to 2023 but 90% were from 2018 and later. Recurrent says battery degradation from frequent fast charging may still happen when an EV gets old.

FORD ALLOWS ALL ITS DEALERS TO SELL EVs
Ford is doing a 180, and will allow any of its dealers to sell EVs. In its previous plan, they had to sign up for a certification program to sell electrics. And it was expensive. Dealers had to invest $1.2 million to be part of Ford’s top-tier, or they could pay up to $500,000 to be in a lower tier. Each tier required a certain number of chargers to be installed at dealerships and it limited EV inventory for lower tiers. But the new reality is that EVs are not selling nearly as well as expected, and Ford needs a lot more sales volume to make them profitable. Dealers who want to sell EVs still need to invest in training employees and installing Level 2 chargers for both CCS and NACS ports. But the cost of entry is now a lot lower.

 

SHAREHOLDERS APPROVE MUSK PAY PACKAGE. HE MAY NOT GET IT
Tesla shareholders officially voted in favor of CEO Elon Musk’s roughly $56 billion pay package. The news was revealed at the company’s annual meeting and Musk indicated that it was approved by a wide margin. But the CEO and Tesla still have to get the same Delaware judge that originally voided the pay package in January to recognize the new vote as valid, which will require them to prove that Musk didn’t have any improper influence during the process. And even if it is passed, there’s always the possibility of a new lawsuit being filed. But moving on, shareholders also approved a proposal to move Tesla’s legal home from Delaware to Texas and it revealed a number of product updates. Tesla will allow a one-time FSD transfer for one more quarter, according to Musk. The option was only first made available last year and it has gone away and come back a couple of times, so it’s hard to say what will happen to FSD transfers. Now over to Optimus, Tesla’s humanoid robot. Elon says the company will have “a thousand to a couple thousand” working in its factories next year, that the robot would be in limited production, it would cost $10,000 to build, but it would sell them for $20,000 and that they would eventually bring in $1 trillion of profit. In all the CEO thinks Tesla could be worth around $30 trillion someday. Its EVs will also play a role in its projected rising market cap. Not only did it ramp Cybertruck production up to 1,300 units a week, three new models were teased under sheets in a slide shown at the annual meeting. But there was no official word on what’s coming.

CANADIAN STEALS TESLA SECRETS
In other Tesla news, a Canadian man plead guilty to stealing trade secrets from the EV maker. The man and another associate, who is still at large, worked for Hibar, a Canadian-based company that makes battery-assembly lines and was bought by Tesla in 2019. But the two left Hibar and formed a China-based company that sells technology used in EVs. At some point they tried selling some of those battery manufacturing trade secrets to undercover government agents and now face up to 10 years in prison.

EU WARRANTY COSTS UP SHARPLY
European automakers are seeing their warranty claims going up significantly, and it’s costing them billions. Last year alone, seven European automakers spent €22.7 billion on warranty, according to the publication Warranty Week. Volkswagen accounted for almost half of that, paying out €10 billion to fix customers’ cars. Stellantis was next at €5 billion. Mercedes paid out €3.3 billion, while BMW spent €2.6 billion. Renault and Volvo paid out far less than that, but their costs were up significantly. Same goes for Ferrari. It didn’t pay that much, but its warranty costs went up by double digits. Now we need to figure out why these costs are going up so fast, and if you’ve got any ideas, we’d like to hear them.

2023 EU WARRANTY COSTS
Volkswagen Group	€10 Billion	+12%
Stellantis	€5 Billion	+24%
Mercedes-Benz	€3.3 Billion	+2%
BMW	€2.6 Billion	+23%
Volvo	€793 million	+22%
Renault	€709 million	+20%
Ferrari	€51 million	+27%
Source: Warranty Week

4 MOST EXPENSIVE CARS TO MAINTAIN
While automakers are paying more to fix customers’ cars, customers also have to pay more to maintain them. The average car costs about $900 a year to maintain over a 10-year period, according to Consumer Affairs. That number includes 2 oil changes a year, tire rotation, new wipers, cabin and engine filters, an inspection, a front-end alignment, and new brake pads. That probably sounds high to you, but it’s an average for all vehicles, and remember, it’s over a 10-year period. And according to the website Go Banking Rates, Porsche tops the list with owners spending $2,200 every year on average over those 10-years. Obviously, the cost is less when the car is brand new, but it goes up significantly as the miles accumulate. BMW’s cost an average of $1,900, Land Rovers cost $1,800 and Jaguars are $1,700. And that’s something to keep in mind if you’re thinking of buying a used one.

ANNUAL MAINTENANCE COSTS
Porsche	$2,207.50
BMW	$1,931.20
Land Rover	$1,856.90
Jaguar	$1,763.60
Source: Go Banking Rates

UAW’S BOYER HITS BACK AT FAIN
The infighting among the UAW’s leadership is heating up. Earlier this week, the U.S. Justice Department opened an investigation into UAW President Shawn Fain, alleging he is obstructing and interfering with an investigation into infighting amongst top UAW leaders. One of the leaders Fain is quarreling with is Rich Boyer, the VP of the UAW who represents Stellantis workers. But Fain stripped him from that position because he says Stellantis isn’t delivering on the commitments it made in the new union contract and Fain accuses Boyer of not holding Stellantis accountable and agreeing to “water-downed language” to back track on what was agreed upon. But Boyer fired back saying that it’s “shameful” Fain is accusing him of that and that he was “transparent” with UAW leadership about the negotiations with Stellantis. And he called Fain’s decision to remove him from his position “a direct attack on my character.”

SMART UNVEILS MID-SIZE SUV
Back in April, the smart brand, which is equally owned by Mercedes and Geely, showed off an all-new mid-size electric SUV, called the smart #5. But that was an off-road concept with big tires and a light bar on the roof. Now we’re getting a look at the more main-stream version thanks to Chinese regulators. Smart is now applying for the #5s sales license in China, which is why we’re getting the new pics. But we also get some fresh details, like it will come in both rear- and all-wheel drive with power outputs ranging from 335 horsepower up to 638 horsepower. In April, it said the smart #5 is based on an 800-volt architecture and would have a 100+ kWh battery pack that returns a WLTP estimated 550 kilometers or 341 miles of range. CarNewsChina reports rear-drive versions will have an LFP pack and AWD version will have NMC. We think these are pretty impressive specs, especially for the smart brand, so we wouldn’t be surprised to see Mercedes and Geely’s other brands build similar models off the same platform, if they haven’t already.

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