AD #3876 – Mazda Has Incentive Problem; Hybrid Owners More Satisfied Than ICE & EV Owners; VW I.D. BUZZ Starts at $61,500

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

LITHIUM PRICES WILL CONTINUE TO FALL
One of the biggest impacts of the slowdown in EV demand has been to the prices of lithium, a key ingredient in batteries. It’s down roughly 70% in the last year, resulting in the very optimistic prediction from Goldman Sachs that EVs and ICEs could reach cost parity as early as next year. And SQM, the second-largest producer of lithium in the world, thinks prices will continue to fall for the rest of the year, possibly as much as 20% from current levels. The company just reported its quarterly results and while it posted record-high quarterly sales volumes of the metal, it also reported a 63% drop in revenue due to its drop in value.

HYBRID OWNERS MORE SATISFIED THAN ICE & EV OWNERS
One reason SQM might have posted record-high volumes of lithium is sales of other electrified vehicles that still need batteries are growing, especially extended range electrics and hybrids. And now that more drivers are getting behind the wheel of hybrids, they really seem to like them. According to the American Customer Satisfaction Index Automobile Study, which randomly emailed a little over 12,000 owners, hybrid vehicles had the highest satisfaction of any powertrain type. It says hybrids scored higher because owners can easily get gas when needed and that EVs scored the lowest due to dependability concerns, potentially expensive repairs and higher insurance. The study also looked at satisfaction by brand and Mercedes and Tesla tied at the top of the luxury list, and Toyota and Subaru tied for top mass-market brands.

MAZDA HAS U.S. INCENTIVE PROBLEM
Mazda’s sales are tearing it up in the U.S. According to Automotive News, they were up 30% in July, the third consecutive month sales were up, they are up 13% so far this year, outpacing the overall market, and sales are on pace for 450,000 units, which would be a record for Mazda in the U.S. However, that growth is riding on the back of significant increases in vehicle incentives. In the second quarter of this year, Mazda offered an average incentive of nearly $2,800 per vehicle. While that’s less than the industry average, it’s up 110% from last year and almost 4-times the amount from 2 years ago. Mazda thinks new models and falling interest rates will reduce its need for incentives. But it finds itself in a similar position as Nissan was a few years ago and Nissan’s profits were just hammered in the U.S.

U.S. VEHICLE INCENTIVES CLIMBING
But it’s not just Mazda relying on incentives. According to Kelley Blue Book, incentives in the U.S. were just under $3,400 on average in July, up 6% from June. That number equates to about 7% of the average transaction price for a new vehicle, which reached $48,400 last month. Last year, incentives were 4.4% of the average transaction price. And for EVs it was even higher, with incentives accounting for 12% of the average transaction price in July. The average price for a new EV was $56,520, slightly higher than June but 1.5% below a year ago.

CHINA READY TO RETALIATE AGAINST EU TARIFFS
Tensions are rising between Europe and China over the EU’s tariffs on Chinese made EVs. Even though the EU issued an updated draft yesterday that lowered tariffs for automakers, it still said it believed Chinese EVs benefited from subsidies. So in retaliation, China opened an anti-subsidy investigation into dairy products imported from the EU. The China Association of Automobile Manufacturers also issued a statement opposing the tariffs and said it could have a “serious adverse impact” on China’s operations and investment in the EU. Another Chinese industry body said the EU’s tariffs lack objectivity and fairness and that it will defend the rights and interests of Chinese EV companies. And automaker SAIC says it may take legal action.

RIVIAN GETS OK FOR PLANT EXPANSION
Good news for Rivian. The Town Council for the city of Normal, Illinois, where its current plant is located, voted in favor of the EV startup expanding the facility. Rivian intends to add another 1.14 million sq ft building to the side of the current plant and to slightly expand the existing structure. The new building will make the R2, and will bring its total capacity to around 215,000 units a year. The R2 is a very important vehicle for Rivian. With an estimated starting price around $45,000, it’s about half its current models, and it’s expected to double the output of both those vehicles combined. The R2 is scheduled to start production in 2026.

VW I.D. BUZZ STARTS AT $61,500
Volkswagen revealed U.S. pricing and range for the ID. Buzz. The retro-inspired electric van will go on sale later this year with a starting price around $61,500. That’s for the base Pro S, which only comes in rear-wheel-drive. Those models have an EPA estimated 234 miles of range. The Pro S Plus trim, which offers more features, starts just over $65,000 for rear-drive and AWD versions start just under $70,000. AWD versions are rated at 231 miles. And the 1st Edition, which is only available at launch, starts just over $67,000 with RWD and around $71,500 with AWD. All prices include destination charges.

VOLVO XC90 GETTING SUBSTANTIAL REFRESH
Volvo is also launching a couple of new models. The all-electric EX90 SUV has started to hit customer hands and on September 4th it says it will introduce a substantially refreshed and a new iteration of the hybrid XC90. Volvo also says there could be a surprise or two.

GMC ADDS AT4 TRIM TO YUKON FOR 1ST TIME
GMC introduced a refreshed version of the Yukon. The exterior gets a slight update with unique grille patterns, liftgate badging and animated headlights and taillights. The interior features a new vertically mounted 16.8-inch infotainment screen. For the first time the Yukon will be available with GMC’s AT4 off-road trim. It adds a front skid plate, 20-inch wheels with all-terrain tires and Adaptive Air Ride Suspension that can raise the vehicle up to 2-inches. The Yukon also gets new standard advanced safety tech and driver assistance features. Three powertrains are available. A 5.3L V8 with 355 horsepower, a 6.2L V8 with 420 horsepower and a 3.0L diesel with 305 horsepower. All the engines are mated to a 10-speed automatic transmission. Fuel economy and pricing will be announced closer to the start of production later this year.

SIERRA EV STARTS HITTING CUSTOMER HANDS
And speaking of GMC, it just started delivering Sierra EV Denali pickups to customers. The limited Edition 1 models are now available, which offer a GM estimated 440 miles of range, and up to 754 horsepower and 785 lb-ft of torque. The Sierra EV Denali Edition 1 starts just under $100,000 excluding destination charges.

FAW-VW SIGN DEAL FOR HUMANOID ROBOTS
Volkswagen and its Chinese joint venture partner FAW are currently testing humanoid robots at one of their plants in China and they must have been impressed enough because they’ve signed a cooperation agreement with the company that makes them. FAW-Volkswagen and UBTECH will explore ways to integrate the robots, called Walker S, into automotive manufacturing sites. Right now they’re using it for vehicle quality inspections, but they must want to grow beyond that.

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