AD #3846 – U.S. EVs Up Strong, Set Sales Record; UAW’s Shawn Fain Under Investigation; Foreign Automakers Make Most Cars In U.S.

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U.S. EVs UP STRONG, SET SALES RECORD
Good news on the EV front. Sales of electric cars in the United States exceeded expectations and set a record in the second quarter. Cox Automotive reports that EV sales were up 11.3% year over year, compared to overall sales that were only up 0.1%. Automakers sold 330,463 electric vehicles, accounting for 8% market share, up from 7.2% last year. And those sales were up, even though Tesla was down. Cox Automotive estimates that Tesla sold 6.3% fewer cars in the U.S. in Q2. That’s based on actual registrations since Tesla does not break out regional sales. Most analysts are expecting EV sales to be even stronger in the second half of the year as more models, especially from General Motors, Honda and Stellantis, come into the market in the coming months.

HYUNDAI ACCUSED OF FALSIFYING EV SALES
Speaking of EVs, Hyundai faces an accusation that it falsified sales reports. Automotive News reports that the Napleton Automotive Group, which is a large auto retailer, filed a lawsuit against Hyundai Motor America, claiming the automaker would give them more of its fast selling vehicles if they reported unsold EVs as part of their loaner fleet. That would artificially inflate EV sales. Hyundai Motor America says it does not condone actions like that and launched an immediate investigation. But there’s bad blood between the Napleton Automotive Group and the automaker. Hyundai terminated one of Napleton’s dealerships in Florida when the son of the group’s owner was charged with sexual battery of an employee. 

UAW’S SHAWN FAIN UNDER INVESTIGATION
UAW President Shawn Fain is being accused of seeking benefits for his fiancée and her sister. That’s according to Neil Barofsky, a court appointed monitor overseeing the union. He filed a motion yesterday revealing that he’s investigating Fain over allegations from two UAW leaders, Vice President Rich Boyer and Secretary-General Margaret Mock, that say Fain stripped assignments from them in retaliation for not taking actions to benefit Fain’s fiancée and her sister. Barofsky is also accusing the union of not providing documents related to the investigation in a timely manner. And the filing revealed a separate investigation into an unidentified regional director, accusing them of embezzling funds. These revelations come at a horrible time for the UAW. It’s trying to organize more plants in the South, including Toyota and Hyundai, and opponents of the union will no doubt use these allegations to argue that the union is still corrupt.

FOREIGN AUTOMAKERS MAKE MOST CARS IN U.S.
For the first time ever, foreign automakers built more vehicles in the U.S. than the Detroit 3 automakers. According to Auto Drives America and the American International Automobile Dealers Association, foreign automakers produced 4.9 million vehicles last year in the U.S., while GM, Ford and Stellantis assembled 4.6 million vehicles. But if you include Tesla, Rivian and Lucid, which built more than 750,000 vehicles in the U.S. last year, it boosts vehicles made by U.S. based companies to more than 5.3 million units. Of course, Stellantis is not an American company, and Lucid is 60% owned by the Saudis. But you get the point we’re making here. Foreign automakers have significantly boosted capacity in the U.S. from 2.4 million vehicles 25 years ago, to 4.9 million today, an 85% increase. During the same period, the Detroit 3’s production in the U.S. has been cut in half, with much of it moving to Mexico, Canada, South Korea and China.

VW MAY CLOSE EU PLANT FOR FIRST TIME EVER
The Volkswagen Group is on the verge of closing a car plant in Europe for the first time ever. It says it’s looking at ways to restructure a plant in Belgium that makes Audi Q8 e-trons, but if no alternative is found it will shut it down. While this will impact about 3,000 workers, it doesn’t sound like the plant has a good chance of survival. Part of it has to do with location. The building is close to the city center of Brussels, so any expansion would be difficult and logistics are harder, which means its production costs are higher compared to other plants. The other part of the equation is that even Audi admits the electric SUV has seen a “intensified drop in demand” and announced earlier this year that the successor to the Q8 e-tron will be built in Mexico. That’s why it’s hard to see a path where the Brussels site continues to build Audis. The last time that the VW Group closed a plant was its Westmoreland site in Pennsylvania in 1988. 

NEV HOT, ICE NOT, IN CHINA
China’s New Energy Vehicle or NEV sales continue to outpace the rest of the market. Last month, passenger vehicle sales topped 1.7 million units in China, down 6.7% compared to last year. Full year results are a little bit better at over 9.8 million vehicles, up 3.3%. But NEV sales in June were over a million units, up 30% and for the full year nearly 5 million NEVs have been sold in China, which is a jump of 32%. On the flip side, conventional ICE and hybrid sales were down 27% last month and are down 13% for the year. 

CHINA PLANTS ONLY AT 58% UTILIZATION
A rule of thumb in the auto industry is that a car plant doesn’t start turning a profit until it’s producing at least 80% of the vehicles that it’s capable of or its capacity utilization rate. But according to GlobalData, China’s factories were only running at 59% last year. That means production lines were sitting idle for a lot of the time. In fact, 20% of factories made less than 1,000 cars and 17% made less than 10,000. Only 15% of car plants in China had a capacity utilization rate over 95%, but get this, they built nearly half of all cars in the country last year. That’s part of the reason BYD, who had an 80% utilization rate, and Li Auto were the only two Chinese automakers to turn a profit on NEVs last year, while others like NIO lost about $13,750 on every vehicle it sold. 

10TH ANNIVERSARY OF CORVETTE SINKHOLE
Can you believe it’s been this long already? In February of 2014, a forty-foot wide sinkhole opened underneath part of Corvette Museum in Bowling Green, Kentucky and while some classic Corvettes were damaged, fortunately the museum was closed and no one was inside when it occurred. So, now the museum is commemorating the 10-year anniversary. It has an exhibit called “Ground to Sky: The Sinkhole Reimagined” which runs to September 15th. It features two fully restored ‘Vettes, a 2009 Blue Devil ZR1 and a 1992 model that was the 1 millionth Corvette built, as well as other cars that were damaged when the sinkhole opened up. 

Autoline After Hours will be back tomorrow after being off for a week. We’ll be talking about VTOLs or vertical takeoff and landing aircraft with Tim Jackson who wrote the book “Dude, Where’s My Flying Car” as well as about a company that using AI to help dealers predict what cars they should order.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.