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Runtime: 12:49
0:00 VW Shocks Germany with Plant Closing Warning
1:18 Ex-VW CEO Faces Diesel Fraud Trial
2:14 UAW Raises Threaten Supplier Jobs
3:05 Cash-for-Clunkers Boosts China’s NEV Sales
3:53 BYD Charges $13K More for PHEV SUV in Mexico
5:39 STLA Says Thanks But No Thanks to Chrysler’s Grandson
6:14 Volvo Joins the Central Compute Club
7:15 EX90 is Volvo’s Flagship EV
9:47 Audi Q5 Adopts New PPC Platform
10:53 Aston Reveals All-New V12 Vanquish
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
VW SHOCKS GERMANY WITH PLANT CLOSING WARNING
Volkswagen is sending shock waves through the auto industry. It says it will likely have to close factories in Germany, which has never happened in the history of the company. And VW probably won’t be the only one to close plants in Europe. Bloomberg reports that 30 automotive factories in Europe, including those from Stellantis, Renault and others, are operating below their break even points, with little hope of recovery anytime soon. The main problems are too much overcapacity and the car market in Europe never fully recovered from the pandemic. It typically ran at a 15 million unit SAAR pre-Covid, but this year it will be lucky to hit 13 million. Closing plants in Europe will likely take several years and cost $1 billion per plant, which will go to cover buyouts and other social costs. So the massive disruption that we’ve been expecting in the auto industry looks like it’s starting to get underway. And we think it’s also going to hit the United States, Japan and South Korea before it’s all over.
VW’S MARTIN WINTERKORN FACES FRAUD TRIAL
VW’s problems really started with Diesel Gate and former CEO Martin Winterkorn, who ran the company when the scandal broke, is going on trial today in Germany for fraud. He isn’t accused of hatching the plan to cheat, rather prosecutors claim he didn’t do anything to stop it once he learned about the defeat devices. Those devices tricked regulators into thinking the diesels met emissions during tests, but they shut off in the real world and polluted more than they should have. Winterkorn, along with four other VW managers, were originally charged in 2019 but the trial was delayed due to Winterkorn’s health issues. The trial is expected to last 12 months and Winterkorn denies all allegations he knew about the scam which cost VW $33 billion in fines and penalties.
UAW RAISES THREATEN SUPPLIER JOBS
Is the UAW pushing too hard for wage and benefit increases at suppliers? Suppliers think so, and even some UAW negotiators believe it’s going too far. Automotive News reports that the union is pushing for significantly higher wages, in one case, 30% higher for workers at a seat plant run by Lear. But Lear’s answer was to bring in more robots and automation, meaning those pay hikes are a risk to jobs in the long run. Higher wages would also probably result in more work being sourced to low cost countries like Mexico. But this is a real dilemma for auto suppliers, how to balance wages and benefits at the same time they face a stagnant market and shrinking profit margins.
CASH-FOR-CLUNKERS BOOSTS CHINA’S NEV SALES
Thanks to boosting subsidies for its cash-for-clunkers like program, sales of EVs and hybrids were up strong in China last month. BYD sold more than 373,000 vehicles in August, a 36% gain from a year ago. Li Auto’s sales were up 38% to more than 48,000 units. Huawei backed Seres sold more than 36,000 EVs, five times more than a year ago. And Leapmotor set a monthly sales record with more than 30,000 deliveries. But despite boosting sales, Nio, Li Auto, BYD and Xpeng all saw their stocks drop, only Leapmotor saw its stock improve after reporting sales.
BYD CHARGES $13,000 MORE FOR PHEV IN MEXICO
BYD just launched its Song Pro plug-in hybrid SUV in Mexico. And it has a much heftier price tag than it does in China. In China it costs $17,200, but in Mexico, it starts at $30,200 or $13,000 more. The version available in Mexico features by a 1.5L engine, a 145-kW electric motor and a 13.8-kWh LFP battery. It has an all-electric range of 71 kilometers or 44 miles. With a price war raging in China, Chinese automakers are eager to export because they can make much higher profits in overseas markets.
STELLA TO WALTER P. GRANDSON: THANKS BUT NO THANKS
Stellantis says it’s not splitting off any of its brands. That’s the company’s response to Frank Rhodes, the grandson of Walter P. Chrysler, who last week revealed he wants to put together an investment group to buy Chrysler, Dodge, Plymouth, Mopar and pretty much everything else that goes along with them. Officially, Stellantis acknowledged the interest in its North American brands, but reaffirmed its commitment to those 14 brands and says they have until roughly 2030 to “build a profitable and sustainable business.”
VOLVO JOINS THE CENTRAL COMPUTE CLUB
Volvo is joining a small group of automakers. It is just the fourth that we’re aware of using a zonal, centralized computing system. The only others are Tesla, Rivian and BYD. Volvo, like BYD, is using NVIDIA’s Orin platform. A zonal, centralized platform allows automakers to eliminate dozens and dozens of CPUs and miles of wiring. It also makes it much easier to improve all aspects of a vehicle’s performance with over the air updates. Virtually every automaker in the world is developing a zonal, centralized platform, and virtually every one of them is struggling to make it work. This is a key reason why Volkswagen is paying Rivian up to $5 billion to use its platform. Volvo also had to delay the launch of the EX90 electric SUV for a year until it got the bugs worked out. But it seems to have worked out most of them.
EX90 IS VOLVO’S EV FLAGSHIP
Let’s dig a bit deeper into the EX90, which we just had the chance to drive. It’s a 3-row SUV, though getting into the 3rd row is a tight squeeze. Prices start around $80,000 and go up from there. Its 111kWh CATL NMC battery provides about 310 miles of range. Volvo is shipping the vehicles with a Luminar Lidar mounted on the roof just above the windshield, though for now it doesn’t do much. Volvo hopes to provide a degree of hands-free driving to customers with an over the air update, but did not say when. And it’s not going to charge customers a fee or subscription when it becomes available. But this is one of the bugs Volvo’s still working on. The EX90 was supposed to launch with these capabilities. In addition to the Lidar, the EX90 has multiple radars, cameras, and ultrasonic sensors mounted around the vehicle. Inside, the EX90 boasts an extremely quiet cabin, with almost no wind noise even at highway speeds. The windows are not framed but have at least triple sealing to keep things quiet. The UX screen is divided into 3 segments. At the top is the navigation map, the middle segment displays frequently used apps, and the bottom segment is reserved for highly used controls. It’s a good layout and relatively easy to learn. Though the EX90 weighs almost 6,000 pounds, it’s powerful and quick, with 402 horsepower on tap from electric motors on each axle. A $5,000 software option will bump that up to 510 hp. But make no mistake, this is a critically important vehicle for Volvo. The company has put a lot of time and money into developing it and it’s launching just as global EV sales are growing far slower than expected compared to when this program got going. The EX90 will be built at Volvo’s assembly plant in South Carolina since it’s mainly targeted at the U.S. market, but will also be exported tall around the world. By the way, we’re going to be posting a number of videos with interviews of the people who developed the EX90, so keep an eye out on our website and YouTube channel for those.
NEW AUDI Q5 GOES ON SALE NEXT YEAR
Audi recently had its first models launch on the all-new electric platform it shares with Porsche, called PPE or Premium Platform Electric. And now it’s launching its first model on the new PPC or Premium Platform Combustion. The all-new Audi Q5 in Europe will be available with both a gas and diesel 2.0L turbocharged 4-cylinder engine and a 3.0L turbo V6 that offers over 360 horsepower. 48-volt mild-hybrid technology is standard on all setups and a plug-in hybrid version will be added later. The interior is based on a new electronics architecture with the infotainment running off an Android operating system. It offers expanded ADAS capabilities, OTA updates, apps like YouTube and even a display screen just for the passenger. The new Q5 will be built in Mexico and will start at over 52,000 euros in Germany when it goes on sale at the beginning of next year.
ASTON MARTIN REVEALS ALL-NEW V12 VANQUISH
At a time when most automakers are turning to EVs, Aston Martin is going in the opposite direction and is bringing back an iconic name at the same time. It revealed the all-new Vanquish, which rocks a twin-turbo 5.2L V12 under its long, louvered hood. The roughly 830 horsepower it produces is fed through a ZF 8-speed automatic gearbox and an electronic limited slip differential. Aston says it will only make 1,000 a year and deliveries should kick off in the fourth quarter.
But that brings us to the end of today’s show. Thanks for tuning in.
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With the down turn in the auto market perhaps it was a good thing that Tesla did not build that plant in Mexico
Keep up the great coverage of Volvo and Polestar new cars. They are truly state of art!
Disruption in the auto industry
“And we think it’s also going to hit the United States…”
Do leftist governments/politicians who tried to push EV transition more rapidly than market forces were able to absorb it bear any responsibility? How about cheer leaders for those groups?
Sean- I like the in-depth review of the EX-90 even though it’s not a vehicle I’m interested in. I hope you are able to do more segments like that.
Winterkorn is facing charges in Germany for fraud from 2019. Seems like our US judicial system is typical of that speed too unless its someone running for office. 🙂
All the UAW has to do is look at the differences between an assembly plant in parts of Asia vs one in the US. The labor costs already drive the level of automation. Keep raising the labor costs and the justification for automation becomes even more attractive. You literally price yourself out of a job. Thats why fast-food is now installing kiosk ordering and automated cooking. A 1980’s McDonalds had about twice as many workers than today. Better pay but less jobs.
Actually, the U.S. judicial system works much slower for someone running for office. If I’d taken a bunch of highly classified documents when in the Navy, I would have been in prison within a year.
Yep, kiosk ordering and self checkout are costing hundreds of thousands of jobs, but the remaining people are probably getting better pay.
Did all of the union people who are ‘surprised’ that EVs take less labor and factories miss the memo 5 or more years ago? 40 % less labor & factory space means 40% less factories! Did the union people think they were going to make 40% more cars? Also, with Stellantis in Europe, if they have an empty factory and are replacing a model with LEAP motor products in a new factory, why not just empty out the old factory, modernize it as a shared facility with LEAP for multiple models. If they build only new factories in Eastern Europe, they will get screwed again in a dew years when the wages rise there too!
Great show,that Aston Vanquish is very nice
The Vanquish is really cool, in an old school sort of way, with RWD and a transmission like in a Dodge Charger. Unfortunately, it will cost almost half a million bucks.
Kevin- Lots of the EV manufacturers are struggling with labor efficiency. ALD did a segment on this topic a few weeks ago and currently manufacturers are finding there is more labor in building EVs than ICE. Which I called BS on that notion all along at least from an assembly plant standpoint. The cars are not that much different and instead of installing an engine/transmission you install an electric motor. Instead of a gas tank and lines you install a huge battery and wires. Everything else is about the same. You still install brakes and suspension, dash and steering column, seats and interior. The stamping and welding of the body isn’t different the paint shop is the same and so where did they actually expect a labor savings? I have no doubt that a EV motor plant probably uses less labor than an engine plant and not really needing a transmission. Mega-castings too will save some labor but that doesn’t have to be EV specific.
So, although higher labor costs will drive further automation, I’m not buying that it has much of anything to do with EVs that account for 8% of sales. What we are currently seeing was the bust from the EV boom. New plants built new models launched and lots of money invested to a market that hasn’t materialized to the degree they expected. Lots of EVs are building inventory and shutting plants sporadically to balance demand. So of course, layoffs will be part of this reduction in demand.
As the manufacturers scramble to develop decent hybrids things will pick up as those hit the market. Something that could have been built in any one of these old assembly plants.
Yep, while assembling electric motors and one speed transmissions should be much simpler than assembling ICEs and 8-10 speed transmissions, I’d think assembly of an electric car, with the battery, wiring, controllers, cooling systems, etc. would be as complex, or nearly so.