AD #3850 – Lyriq Now #2 in Cadillac Sales; GM Backs Off 1 Million EV Goal by 2025; Chinese Suppliers Race Into Mexico

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GM BACKS OFF 1M 2025 EV GOAL
GM CEO Mary Barra is backing off the company’s goal of selling 1 million EVs in the U.S. by the end of next year. She says the market demand just isn’t there. Moreover, because GM has delayed several EV programs, it won’t even have the manufacturing capacity to make a million electrics by then.

LYRIQ NOW #2 IN CADILLAC LINEUP
Even so, Cadillac is making quiet progress with EVs. The Lyriq is now the second best selling vehicle in Cadillac’s lineup, only behind the Escalade, and accounted for 17.7% of Cadillac sales in the first half of the year. Cadillac will launch two more EVs later this year, the Optiq, which will be priced below the Lyriq, and the Escalade IQ, which the GM Motor Authority reports will start at $130,000, while the sport version will sell for over $150,000. AutoForecast Solutions reports that next May, Cadillac will start building a longer version of the Escalade IQ, called the IQL, which we think will add another $3,000-5,000 to the price. And next February, Cadillac will launch the Vistiq, a 3-row SUV that will complement the Lyriq. Put it all together and we think it’s possible that by the end of next year, one out of three Cadillacs sold will be electric.

FORECAST: BEVS TO HIT 50% U.S. SALES BY 2030
And it’s only a matter of time before BEVs surpass ICE vehicles in sales. A report from the Boston Consulting Group via research company Recurrent, predicts BEVs will account for half of all new car sales in the U.S. by 2030. That kind of flies in the face of everything you hear about a slowdown in EV demand and political uncertainties. But the Boston Consulting Group believes reduced battery costs, new products and government support will continue to drive EV growth. And it’s not the only one. The International Energy Agency also says BEVs will hit 50% market share by the end of the decade, which is up by over 13% from its previous forecast. Part of the revision is due to EV sales topping 1.1 million units last year. If EVs accounted for half of all new cars at today’s sales rate, about 8 million electrics would be sold in the U.S. Plug-in hybrid vehicles on the other hand are projected to reach about 8% of sales by 2030, which is about where EVs were in the second quarter of this year.

CYBERATTACK COST DEALERS $1B
Last month’s cyberattack that hit car dealerships across the U.S. put a big dent in their profits. According to the Anderson Economic Group, dealerships lost over 56,000 new-car sales and more than $1 billion. The attack targeted CDK, which provides software for nearly 15,000 dealers. The software is used for parts, service, accounting, finance, insurance and vehicle inventory. But dealers weren’t able to use it for several weeks, which led to all the losses. AutoNation, one of the largest dealer groups in the country, said that the attack likely lowered its earnings by about $1.50 a share.

LUCID CLAIMS MOST EFFICIENT EV
Lucid Motors says its Air sedan is officially the most efficient EV available. The Pure version of the Air now achieves 5.0 miles per kWh and an EPA rated 146 MPGe. The model is equipped with an 84-kWh battery pack that provides 420 miles of range. Other updates include a new infotainment system that has triple the processing power and twice the memory as the previous system and all trims now come standard with a heat pump and Lucid’s advanced driver assistance system. Even with the upgrades, the Air Pure still starts at the same price, $69,900 in the U.S., excluding destination charges. The Air Touring which comes with all-wheel-drive and has a 406-mile range, now starts at $78,900. And the top of the line Air Grand Touring with 512 miles of range, starts at $110,900. All models are available to order now.

STELLANTIS SUES ANOTHER SUPPLIER
​​Stellantis is once again suing one of its suppliers. Crain’s Detroit Business reports that the automaker filed the suit against Canadian supplier Spectra Premium Mobility Services earlier this month over a pricing dispute. The supplier threatened to stop shipping fuel tanks for the Chrysler Pacifica minivan, which could shut down production at Stellantis’ Windsor Assembly Plant. Stellantis claims that the supplier is demanding a 12.5% price increase or it will withhold parts. The automaker asked the court to place a temporary restraining order on the supplier and force it to ship parts at the contracted price. However, a judge denied that request. We think Stellantis has a real problem with its suppliers. Spectra is the fourth supplier the automaker has sued over prices this year.

  

STELLANTIS TO SELL RECYCLED OIL
Let’s stay with Stellantis for a moment. It has a brand we’ve reported on called SUSTAINera RECYCLE, which sells remanufactured, repaired, reused and recycled parts and components. Well now it’s teaming up with TotalEnergies to launch what it calls a “regenerated oil.” Basically, it’s waste oil that’s been refined to restore quality and performance. The 10W-40 oil has a carbon footprint that’s up to 50% lower and it comes in 1-liter or 5-liter bottles that are made from 50% recycled material and can be 100% recycled. Quartz EV3R oil will first be available in Europe and is compatible with both gas and diesel engines.

TOTAL TO INSTALL 3,000 EV CHARGERS IN UK
Speaking of TotalEnergies, it formed a new charging joint venture called Source with UK power company SSE. It plans to install up to 3,000 chargers with 150 kW of output over the next 5 years in Britain and Ireland, which would give it about 20% market share of the entire UK charging network.

WITH NEW A5 AUDI HAS NO COUPE OR CONVERTIBLE
Audi no longer has a coupe or convertible in its lineup. It just launched the new A5 without either of those variants carrying on and the A5 was the last Audi to have models in those categories. The new A5 sedan and wagon are longer and wider than before with massaged styling and an upgraded electronic architecture. The interior features a new push-button gear selector and a large display that combines the instrument cluster and infotainment screen. The passenger has the option for their own separate screen as well. Both a gas and diesel 2.0L turbocharged engines are offered with an available 48-volt mild hybrid system that’s been updated for the new model. Or a 3.0L turbocharged V6 can be had, which also offers 48-volt tech. The new A5 first launches in Europe this November with a starting price around 45,000 euros in Germany.

CHINESE SUPPLIERS MAKE A BEELINE TO MEXICO
China is the biggest car market in the world, but the U.S. is still the most profitable. And Chinese suppliers want to use Mexico to get around tariff restrictions to get into the U.S. According to the Coalition for a Prosperous America, 29 Chinese automotive suppliers have started investing $7 billion in Mexico to make parts there. Those suppliers will make aluminum castings, brake systems, interior and exterior trim parts, thermal management components, intelligent driving systems, ADAS and more. The Chinese suppliers also have a considerable cost advantage, up to 30%. That will be mighty tempting to American automakers, which threatens the business of existing suppliers.

SUDDENLY, EREVS MAKE A LOT OF SENSE
Only two Chinese EV companies are profitable, BYD and Li Auto. And the key to Li Auto’s success is that it mostly sells extended range EVs, or EREVs. In fact, EREVs are now the fastest growing segment in the Chinese market. And that has got a number of other automakers studying the technology. As you know, Stellantis is coming out with the Ramcharger EREV pickup that offers 690 miles of driving range and a 14,000 pound towing capacity. And now Ford says it’s going to adopt the technology, too. The beauty of EREVs is that they drive like pure BEVs but don’t present any range anxiety because an internal combustion engine generates electricity to help keep the batteries charged. Moreover, that engine operates on a fairly light load, so it can be made at a lower cost. Plus, EREVs don’t need transmissions or drive shafts, and they can use smaller batteries, so they offer considerable cost savings to manufacturers. While they’re not a perfect solution, since the onboard IC engine puts out carbon dioxide, this is the kind of electric that will likely satisfy a lot more consumers at this stage of the EV transition than a pure battery electric.

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