AD #3839 – China to EU: Drop Tariffs…Or Else; China Car Exports Up 26% In 2024; Ford, Rivian & Hyundai EVs Tackle Pikes Peak

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

CHINA TO EU: DROP TARIFFS, OR ELSE
China is tightening the screws on the European Union. It’s demanding that the EU drop all proposed extra tariffs on Chinese made cars by July 4, or else. That “or else” includes threats of higher tariffs on European cars sold in China, as well as higher tariffs on European pork, dairy products, and French cognac. But China is also dangling a carrot for the German automakers. It will cut the 15% tariff on imported cars with gasoline engines over 2.5 liters, if Germany can get the EU to drop the tariffs. The country already opposes additional tariffs on Chinese goods because it exports so much to China and does not want to be the victim of any Chinese retaliation. So China is trying to get Germany to do more to stop the EU tariffs. One thing’s for sure. This trade dispute is going to go on all year long and it runs the danger of breaking out into a full-blown trade war. 

CHINA CAR EXPORTS UP 26% IN 2024
And that trade war may not end at the borders of Europe. The China Passenger Car Association reports that Chinese automakers exported 2.45 million vehicles globally in the first five months of the year, up 26% compared to last year. Most of those cars went to Russia, more than 372,500 of them. That’s nearly 200,000 more than went to Mexico, which was the second largest destination for Chinese exports. 

RUSSIA CAR DEALERS UPSET AT CHINESE OEMs
While Russia and China are expressing solidarity on the geopolitical front, Russian car dealers are fed up with Chinese car companies. The six largest Chinese car companies now control 43% of the Russian market, and Russian auto dealers say the Chinese are taking advantage of them. They’ve even filed a complaint with Russia’s anti-monopoly agency. They accuse the automakers of not providing technical service and support and forcing them to buy more cars than they can sell. The dealers say if they don’t meet sales targets, they lose sales bonuses or even have their franchise contract voided. They also complain they’re not paid enough for warranty claims, and that some Chinese automakers force them to sell non-automotive products like bicycles. 

CYBERATTACK STILL DISRUPTING CAR DEALERS
But Russian car dealers aren’t the only ones that have it bad. That cyberattack on CDK, a company that handles car dealer management systems in the U.S. is wreaking havoc across the industry. Up to 15,000 dealers have seen their business disrupted, and have literally resorted to using pen and paper to keep track of sales, repairs and service orders. Bloomberg reports that CDK is ready to pay millions of dollars to unlock its system to the hacker group that’s taking responsibility for the attack. The hackers are reportedly operating out of Eastern Europe. Dealer management systems, or DMS, generate sales leads, handle trade-ins, car loans, and vehicle registration, they order replacement parts and schedule service appointments. So, the impact is enormous. CDK transacts 2.6% of the U.S. GDP.

  

BOSCH #1 AUTO SUPPLIER LAST YEAR
According to Automotive News, Bosch generated more money from its global automotive sales than any other supplier last year. It brought in nearly $56 billion in 2023, which was about $6 billion more than ZF in second place. Magna is in third at nearly $43 billion and then comes the biggest surprise on the list to me, CATL. The biggest battery maker in the world generated over $41 billion in sales last year. Denso, Hyundai Mobis, Aisin, Continental, Forvia and Lear round out the rest of the top 10.

FORD, RIVIAN & HYUNDAI EVs TACKLE PIKES PEAK
EVs took the center stage at this weekend’s Pikes Peak hill climb in Colorado with Ford’s 1,600 horsepower Lightning SuperTruck setting the fastest overall time of just over 8:53. It was the only vehicle to go sub-9 minutes, but it ended up being about 6 seconds slower than last year’s SuperVan because of an unexpected power loss that required it to come to a complete stop and reboot, which added about 26 seconds over the SuperTruck’s qualifying time. Even so, it would still be about 30 seconds off the sub-8-minute record time set in 2018 by the VW ID.R. Hyundai also had a good day running in both the modified and unmodified categories with the IONIQ 5 N. It set the electric production vehicle record with the unmodified 5 N at just under 10 minutes and 50 seconds, which only missed the production SUV record set by the Bentley Bentayga by less than half a second. However, it did beat out a quad-motor Gen 2 Rivian R1T, which had shortly before claimed the production EV record with a time over 10 minutes and 53 seconds. But that’s still half a second faster than last year’s truck and gives it the record for fastest production pickup. Hyundai’s other 5 Ns set the record for fastest modified EV up Pikes Peak at over 9 minutes and 30 seconds.

FERRARI LAUNCHES NEW FACILITY TO MAKE EVs
We’ve got more details on the e-building where Ferrari will make its first EV that launches late next year. Not only will it make that electric car, which reportedly costs over 500,000 euros, but pure ICEs and hybrids as well. It also dedicated an area to develop and produce powertrains for all of those models and it will make high-voltage batteries and e-axles too. Ferrari says the building will be powered entirely by renewable energy, which will significantly reduce its CO2 emissions. 

F1 & AMAZON USE GENERATIVE AI TO ENHANCE RACE BROADCASTS
Race fans could be treated to a much better viewing experience as media companies work on using generative AI to produce personalized broadcasts. Formula One is working with Amazon Web Services to provide television viewers with customized coverage, all with the idea of keeping viewers glued to the race. AWS already helps predict when one driver will catch another based on how the cars are performing and how the tires are degrading. But now fans will be able to choose what kind of data, trivia and stories they want to watch. Though the F1 series is getting more competitive, some of the races have been real snooze fests thanks to the domination of Max Verstappen and the Red Bull F1 team. So a personalized viewing experience could keep fans more engaged, even when a race is being taken over by one driver.

CHINA CAR EXECS TURN TO LIVESTREAMING TO LURE CUSTOMERS
The competition in the Chinese car market is becoming so intense that car executives are turning to livestreaming as a way to connect with potential customers. Bloomberg reports that it’s not just execs from EV startups participating in livestreams, senior execs from China’s traditional state-owned brands are now doing so. The livestreams attract younger customers and allow companies to interact directly with car buyers and show off a car’s technology and performance. And one-way execs are doing that, is taking their vehicle’s on road trips. Xiaomi’s CEO for example showed off the company’s driver assistance features in a three-and-a-half-hour livestream in May that racked up 39 million views. And Nio’s founder has grown his follower base on Weibo to 600,000 people thanks to his livestreamed road trips that started in March.

But that brings us to the end of today’s show. Thanks for tuning in.