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Runtime: 12:11
0:00 Tesla Profit Tanks
1:42 GM Delays Electric Pickup Production Again
2:30 Waymo Gets $5 Billion Cash Infusion
2:52 Vogt Blasts GM for Axing Cruise Origin
4:13 LG Energy Signs Battery Deal with Chinese Companies
4:48 Tula Boosts EV Motor Efficiency
6:20 Most Fleet Operators Want to Add EVs
7:13 Mitsubishi Focuses on North America To Drive Growth
8:06 Xiaomi To Build Electric Supercar
8:34 Avatr Adds EREVs To Lineup in China
9:14 Honda Updates Civic Si
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TESLA PROFIT TANKS
In its shocking Q2 financial statement, Tesla reported that its net profit plummeted 45% as new car deliveries fell 5% and production dropped 14%. Making matters worse, operating expenses shot up 39%. While automotive revenue fell 7%, revenue from energy storage and other services made up the difference, and free cash flow was up 34%, but those were the only positive developments. Otherwise, this was a disastrous quarter for the company and shows that slashing the prices of its cars really had a big impact. So, that might not have been the right move. We think this explains why Elon Musk has pivoted to a narrative all about robotaxis, robots, generative AI. That robotaxi did see a recent delay because Elon requested some changes. It’s now going to be shown off on October 10th, instead of an August reveal, but he says that extra time will allow Tesla to “show a few other things.” But he did not elaborate on what those things will be. Elon would also be “surprised” if it didn’t have unsupervised self-driving by next year. However, he’s been saying that every year since 2019 and in our opinion its financial results show that Tesla’s automotive operations desperately need Elon’s attention.
| TESLA Q2 2024 EARNINGS | ||
|---|---|---|
| Sales | 443,956 | -5% |
| Revenue | $25.5 Billion | +2% |
| Operating Profit | $1.6 Billion | -33% |
| Net Profit | $1.4 Billion | -45% |
| Source: Tesla | ||
GM DELAYS ELECTRIC PICKUP PRODUCTION AGAIN
General Motors is once again delaying production of its electric pickups, the Chevy Silverado and GMC Sierra EVs. The models were originally supposed to start production at the company’s plant in Orion, Michigan in early 2025. But last year, GM pushed that back until late 2025. And now the pickups are being delayed again to mid-2026. GM CEO Mary Barra also revealed that the company is delaying the introduction of Buick’s first EV to North America. But she did not say when that model will now make its debut. This adds to last week when Barra announced that GM is backing off its goal of selling 1 million EVs in North America by the end of next year due to a slowdown in demand.
WAYMO GETS $5 BILLION CASH INFUSION
Waymo is getting a massive investment that will allow it to continue to expand its autonomous ride-hailing operations. Parent company Alphabet says it’s going to pour $5 billion into Waymo over multiple years. Not only for its expansion into new areas in California and Texas, but also for development of self-driving tech and AI.
VOGT BLASTS GM FOR AXING CRUISE ORIGIN
And speaking of AVs, GM Cruise’s former co-founder and CEO had some harsh words for the automaker after it announced it’s dropping the Origin shuttle. Kyle Vogt said he is “disappointed” GM is killing the Origin, adding it would have been amazing for cities. But then he dropped this little nugget. “GM repeatedly finds themselves with a 5-10 year head start, but then fumbles the ball, shuts things down, and loses the lead. Anyone remember the EV1? It’s like someone keeps letting them look into a crystal ball and then they just go, “nah, we’re good.” Ouch. To be honest, I don’t think he’s really wrong. But it also seems like he’s been eating sour grapes. If we’re to believe the reports, Vogt wasn’t the best leader. And if he had been better, maybe he’d still be CEO and the Origin wouldn’t have been killed off.
LG ENERGY SIGNS BATTERY DEAL WITH CHINESE COMPANIES
It’s not just automakers teaming up with Chinese companies on EV tech. LG Energy Solution says it’s looking to set up long-term supply deals or even joint ventures with up to three Chinese materials companies, so it can get access to LFP or lithium iron phosphate battery cathodes. It says it would use those supplies to make batteries for Europe, which are not only cheaper for automakers and consumers, but LG claims it will allow it to bring its costs for making LFP batteries level with Chinese rivals in three years.
TULA BOOSTS EV MOTOR EFFICIENCY
Remember Tula, the company that invented Skip Fire, which shuts off cylinders in an IC engine when they’re not needed? GM is pretty famous for using the tech in most of its pickups, SUVs and even Corvette. Well, Tula figured out that if you do pretty much the same thing with an electric motor – send strong pulses of electricity, instead of a continuous flow, the motor is more efficient. And that can increase the range of an EV, or allow an automaker to keep the same range, but use a slightly smaller battery. The pulses are virtually imperceptible and only last for a few milliseconds. But they can increase the efficiency of an electric motor up to 3%, which means the battery could also be downsized by 3%. That may not sound like much, but let’s say a battery costs $8,000, a 3% downsize equates to a $240 savings. And in an industry that fights over every penny of cost, 240 bucks is a lot! Tula calls it DMD, or dynamic motor drive, and claims it can make a magnet-less motor as efficient as a permanent magnet motor, which gets rid of the need for rare earth minerals. Best of all, Tula’s solution is all software–no hardware or modifications are needed. And it can also be updated over the air. Tula says we could see this tech in production as early as next year.
MOST FLEET OPERATORS WANT TO ADD EVs
Fleet operators sure like the idea of getting EVs. Cox Automotive found that 87% of the fleet operators it surveyed in the U.S. want to add EVs. And in the next 5 years they expect 43% of their vehicles to be electric. That’s for both fleets with and without EVs. But the ones that already have EVs expect to have 58% electrics in the next 5 years. Despite the fact that fleet owners say EVs need slightly more maintenance than ICE vehicles, 48% say they prefer electrics. On the other side, 27% said they prefer ICE, and 24% said they didn’t see any difference. Right now, only 14% of fleets have EVs, but Cox expects that to expand in the coming years.
MITSUBISHI FOCUSES ON NORTH AMERICA TO DRIVE GROWTH
Mitsubishi says it’s pivoting to North America to help drive the automaker’s growth through the end of the decade. The company was trying to make inroads in Southeast Asia to boost its growth. But intense competition from low-cost Chinese brands and sluggish sales, which have dropped 11 consecutive months, is causing Mitsubishi to switch. Currently, North America accounts for 25% of its global revenue but it’s aiming to boost that to 30% by 2030. And to help achieve that, Mitsu will introduce one new model in the market every year until the end of the decade. Its sales in the U.S. are still relatively small. Last year, it sold just over 87,000 vehicles. But in the first six months of this year, Mitsu has sold more than 51,000, which is a 12% increase from last year.
XIAOMI TO BUILD ELECTRIC SUPERCAR
Xiaomi must have gotten a lot of positive feedback on that nearly 1,550 horsepower version of its all-electric SU7 sedan. The company’s CEO says it will build a production version with the same battery pack, tri-motors, and chassis as the prototype, but without the carbon fiber body to help keep costs down. The SU7 Ultra is scheduled to go on sale in China in the first half of next year.
AVATR ADDS EREVs TO LINEUP IN CHINA
In other Chinese car news, EREVs or extended range electrics are the fastest growing segment in the country. So, now Avatr, which is a joint venture between Changan, Huawei and CATL, is coming out with EREV versions of both its 11 SUV and 12 sedan. They’ll feature a 1.5L engine that charges an LFP battery that feeds a roughly 230 kW or 300 horsepower electric motor. Battery size wasn’t given but they’re expected to have around 201 kilometers or 125 miles of all-electric range.
HONDA UPDATES CIVIC SI
Honda is giving the Civic Si an update. The performance model gets a more aggressive front end and grille, along with revised taillights and a new wheel design. It also has a stiffer body, so the suspension was retuned to match the increased stiffness. It’s still powered by the same 1.5L turbocharged engine that’s mated to a six-speed manual transmission. The setup cranks out 200 horsepower and 192 lb-ft of torque while delivering a combined 31 MPG. The new Civic Si arrives at dealer showrooms this August with a starting price just over $31,000 including destination charges.
Speaking of Honda, we’ve got the VP of Sales coming on tomorrow’s Autoline After Hours to talk all about its jump into the EV war, how it outsold Stellantis in the U.S. and if strong sedan sales are just a temporary blip. You can catch that live at 3PM EST. But that’s a wrap for this show. Thanks for tuning in.
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For years, I’ve been expecting Mitsubishi to leave the U.S. market. After having some interesting stuff, most recently the Lancer EVO, they now have only a couple mediocre CUVs, and maybe, still, the bottom feeder Mirage. I hope some of their new one-a-year products are more interesting than what they now sell in North America.
Mitsubishi is highest ranked Japanese brand in J.D. Powers Intial Quality in 2022. They finished above industry average.
I think the most disappointing vehicle Mits makes is the Outlander PHEV. Mediocre EV range and poor gas economy.
Tula seems to have a winning product for EVs. All these little tricks will add up.
GM delaying the EV truck that no one asked for. Completely created to compete with the fabricated high reservations for the Cybertruck. (same goes for the failing Ford Lightning) A scramble to be first in a very limited market. EV’s make the most sense as inner city commuter vehicles but manufacturers quickly realized the buying public wasn’t interested in paying 40-60K for an economy car. Trucks are popular but are not a great fit as a BEV. The luxury market has delivered the most promise as that makes sense to try and pull the amount of money needed to sell an EV. The early adopters have bought. the people with expendable cash and wanting the eco-friendliness of an EV have bought. It’s down to the general public now. Lots of EVs that look like any other ICE are being released and finally the designs aren’t quirky (CT excluded) and now we will start to see the publics real interest in EVs. What they are realizing is we may have rushed into this and maybe need to slow the roll. Get a steppingstone to bridge the gap. The range extenders (basically Hybrids) make sense and help to ease the public into electrification. The EV trucks are going to be a huge flop and that includes the Cybertruck.
I was surprised that the COX automotive survey found maintenance cost to be higher on Fleet EVs. That was due to tires and brakes. Which again was surprising as most EVs have regen braking and claim brakes last longer. Fleets also don’t get the government incentives individual buyers get so initial acquisition costs are higher. They do seem to work for fleets with short runs intown, but the rural businesses are not even considering them.
GM should cut their losses and forget about a BEV truck for now and align themselves to compete with Ram and put together a great hybrid truck. For many that dont do towing and use their trucks for lots of short trips a HEV with 60 miles of range will serve them well. IMO
Perhaps the situation at Tesla changed Elon’s mind about giving the Trump campaign $45 million a month.
Lambo,
On paper the RAM REV seems to be a good match for the truck market. The one thing we do not know yet is the price. That may turn the tides against it. Some estimates have a base Ram REV starting at $68K which will not compete well with the ICE trucks starting at 45K. Some estimates put it at 60K base which still is high. And yet others put it at 55K base which is better and may be palatable. We just won’t know if the Ram REV is a good option until the official pricing comes out. I suspect the $68K start price is accurate though.
With that said, between a $68K Ram Rev and a $75K Silverado EV, I would take the Ram REV every time. In both cases I would just take the ICE and save thousands even factoring in the difference between fuel and electricity.
Series hybrids, also known as range extended EVs, would be GAS HOGS on the highway. That’s why no one sells them in North America. The last one sold was the i3 REx, and it had enough electric range to be useful as a commuter car for a lot of people with only minimal use with gas. The Volt, which mechanically connects the engine to the wheels under some conditions gets much better mpg on gas than the strictly series i3 REx.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=43745&id=40924
The EVs must just break a lot, have software glitches, or something like that. Yeah, they would go through tires, especially since they are being driven by non-owners who would probably use the impressive 0-10 mph acceleration a lot. Brakes should last forever, though, unless they get corrosion from road salt, or something like that. Maybe there’d be software problems with coordinating the regen and friction braking.
Its also possible that the drivers either have not had adequate training or they simply don’t care, and use the brakes the same way they would on an ICE vehicle. The way I see Amazon drivers piloting their EV delivery vans, it doesn’t seem like there is much regen braking happening.
The Ramcharger could be a game changer in the electrified pickup market because of its 600 mile range. It will be far better suited to towing and hauling than full BEV pickups. The Ram Rev will have a higher range than some competitors but the time to recharge will definitely put off some buyers. As always, price will make a huge difference. I have not heard if there will be a work truck version of the Ramcharger. Though for commercial users, it may not make any difference since most of their driving is local.
Depending on the state you live in, there are VERY generous incentives for companies buying EVs for their fleets. That is because from an emissions standpoint, replacing one commercial vehicle with an EV is similar to taking three to four regular cars off the road. California has some amazing incentives available for qualifying vehicles. One medium duty EV truck manufacturer is listing a bottom line price of $17,000 for a class 3-4 medium duty EV truck, after incentives in California. There are also some very attractive national incentives available. This is the main reason that so many fleets are interested in acquiring EV commercial vehicles.
I am sure that Kyle Vogt is a brilliant young man. He does seem, however, to be a little immature when it comes to dealing with the realities of marketing, sales, politics, finance, shareholders and the huge investment involved in engineering and producing vehicles. Its one thing to have a crystal ball. Its another thing to make the decision on when to act on the information the ball provides. Selling a couple of hundred EV1s to enthusiastic early adopters is one thing. Its an entirely different thing to create a viable car for most people to use, bring it to market at a competitive cost with enough range to make it practical, and do that when there was no charging infrastructure of any kind. Especially when you recall that the time period was roughly 1999, when GM was still operating under a UAW contract that was slowly killing the company. Any CEO that decided to approve an EV then would have been fired by the board and the EV would be a reporter’s punchline about GM.
Mr Vogt came out of his experience a pretty wealthy man. After developing autonomous technology, and then selling his company and working for GM at a very attractive salary, he never has to work again if he doesn’t want to. Whining like a child after others had to step in to stop the flow of red ink that he presided over, (or at least reduce it), shows a level of immaturity and a Silicon Valley dreamer mentality.
I need to clarify something. When I said EV brakes should last “forever,” I was referring to passenger vehicles, A12,000 pound EV truck with 200 hp would use mostly friction braking in normal use.
Seeing those declining Tesla sales numbers are something we have to get used to. Tesla’s day in the sun is starting to settle. His word is no good when it comes to a date to introduce something new. His models are getting stale and nothing on the horizon as far as a face lift.
The cyber truck is a dud and I’ve heard there’s a lot of them sitting unsold. Add to all this a lot of people have lost respect for him.
If the delivery type vehicles don’t have or use regen braking, then having the brakes wear out quicker makes sense just due to the weight of the vehicle. Same reason they go through tires quicker plus having instant torque. Seems like any traction control system would limit the damage from hard accelerations.
Electric delivery vehicles have regenerative braking, but it won’t be nearly as high of percentage of total braking as with a vehicle that weighs half as much with more installed motor power. The same applies to a hybrid compared to a BEV. If the hybrid has 50hp of motor, and the BEV has 300hp, the BEV will have roughly 6 times the amount of regen braking available. Still, brakes last a long time with hybrids, at least if driven sensibly. A friend had a 2008 Prius with over 200K miles, and the original brakes.
Sean, when you said GM was delaying their pickups, that was a little misleading, as their pickups are in production now. What GM is delaying is the move to a higher-volume facility because they do not need the volume due to poorer than expected demand.