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Runtime: 9:43
0:00 EU & China Agree to End EV Tariff Dispute
1:03 Dealers Want to Ease U.S. Emission Rules
2:05 VW Bringing Hybrids to U.S. Market
2:52 Jeep Considering Hybrids for U.S. Line-Up
3:13 Jeep Launches Avenger BEV in Japan
4:35 U.S. Car Sales Expected to Drop This Month
5:38 EV Startup Avatr Plans to Go Public
6:32 BYD Launches Shark Pickup in Panama
6:49 Kia Opens 1st Dedicated EV Plant
7:45 Hyundai Closer to U.S. EV Production
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EU & CHINA AGREE TO END EV TARIFF DISPUTE
Europe and China have agreed to end their EV tariff dispute. According to China’s Ministry of Commerce, Chinese automakers have pledged to sell EVs imported to Europe above a minimum price and both sides are now “negotiating on a flexible price commitment plan.” They’re trying to reach a deal before the tariffs are finalized at the end of October. Back in June, the EU raised tariffs on Chinese made EVs by up to 38% after its investigation concluded that the EVs benefit from unfair subsidies. But now it looks like they can avoid those fees as long as the vehicle has a higher price. No word what happens to a vehicle priced below the minimum. But this should help smooth concerns from European countries and automakers that were worried about retaliatory tariffs from China.
DEALERS WANT TO EASE U.S. EMISSION RULES
U.S. dealers say unless emission rules are relaxed EVs are going to start piling up on their lots, ICE prices will go up, customers will have to work harder to find the model that they actually want and people will just hold on to their older, less fuel-efficient vehicles. So, now they’re calling on the government to help. More than 5,000 U.S. dealers have already sent letters to President Biden, but now they’re reaching out to state and federal officials urging them to ease emission regulations as well as EV sales requirements. They say the rules are “out of touch with the state of EV technology, charging infrastructure, and most of all, the American consumer.” Collectively, dealers have invested billions in EV training, equipment and inventory, but they’re worried what the slowdown in EV growth will do to their business, which has also caused automakers and suppliers to significantly slash their EV production and sales targets.
VW BRINGING HYBRIDS TO U.S. MARKET
Hybrid sales are growing in most of the world, including the U.S. But VW hasn’t offered hybrids in the U.S. since 2016. So, the head of VW North America is trying to change that. Pablo Di Si told Automotive News that he’s been fighting to get more hybrids and has been able to get some models approved. He didn’t say which ones, but higher-volume models would make the most sense, like Tiguan and Atlas. Volkswagen needs those models ASAP so its lineup is more in tune with market conditions. And one advantage that VW has is it already offers hybrid and plug-in hybrid models in other parts of the world so it has the potential to make the move quickly.
JEEP CONSIDERING HYBRIDS FOR U.S. LINE-UP
Jeep is also considering adding more traditional hybrids to its line-up in the U.S. It already offers several plug-in hybrids but with demand slowing for PHEVs and also BEVs, Jeep’s VP of global product planning says it is looking into adding hybrids because they’re not as costly. But he did not say when they could reach the market.
JEEP LAUNCHES AVENGER BEV IN JAPAN
And in other Jeep news, the company just launched the all-electric version of the Avenger in Japan. The model is also offered in Europe with ICE, mild and plug-in variants. But for now, it will only be sold as a BEV in Japan, which is a bit of a gamble. Last year, only 44,000 EVs were sold in the country, accounting for just 1.6% of the market. Meanwhile, hybrids and PHEVs account for more than half of sales. And like most foreign brands in Japan, sales are relatively small for Jeep. Last year, it sold around 11,500 vehicles, which was up 17%. But this year, its sales have tumbled 23% to just over 6,000 units through August.
U.S. CAR SALES EXPECTED TO DROP THIS MONTH
Car sales in the U.S. are expected to decline this month. Analysts are estimating that automakers will sell between 1.16-1.18 million vehicles in September, which would be a decline of 11-13% from a year ago. Part of the reason for the drop is the difference in selling days. There were 3 fewer selling days in September compared to a year ago. And analysts are forecasting 3rd quarter sales to come in around 3.9 million units, down 2% from last year. High transaction prices are part of the reason for the drop. J.D. Power estimates the average new vehicle cost more than $44,000 this month. And while that is down 3% from last year, it’s still higher than pre-pandemic levels. And analysts don’t expect a jump in sales for the rest of the year, even with the Federal Reserve cutting interest rates recently because they it will take time for the cuts to impact auto loans.
EV STARTUP AVATR PLANS TO GO PUBLIC
A Chinese joint venture EV startup is getting the chance to see if it can survive on its own. AVATR, a team up between Changan, Huawei and CATL, is planning to go public. The move would allow it to continue to develop vehicles independently as well as collaborate with new strategic partners. Through August AVATR has sold more than 36,000 units, which is not a lot. But that’s mostly from one model and only recently added a second. Plus, going public could give it a large cash infusion to expand more or make additional investments. Last month it poured $1.6 billion into the automotive division of tech giant Huawei to make sure it always has access to Huawei’s latest technology. And reports say it’s going to double that investment again.
BYD LAUNCHES SHARK PICKUP IN PANAMA
BYD is bringing the Shark, its pickup truck that plugs in, to new markets. The PHEV truck will be sold in Panama through two dealers BYD operates in the area. It’s already on sale in Mexico and should go to other Central American countries as well.
KIA OPENS 1ST DEDICATED EV PLANT
Kia is getting ready to ramp up production of more affordable EVs. It just finished converting one of its plants in South Korea that made ICE vehicles into a dedicated EV manufacturing facility, which is the 1st in the Hyundai Group. The site will make the Kia EV3 and EV4 and will have the capacity to make 150,000 units a year. The EV3 has already gone on sale in Korea with a starting price just over $30,000 and sold just over 4,000 units in its first full month. The model is also expected to launch in the U.S. before the end of the year with a starting price around $35,000, but with production in Korea the EV3 won’t qualify for the full tax credit at purchase, so we suspect Kia will push leasing pretty hard.
HYUNDAI CLOSER TO U.S. EV PRODUCTION
And speaking of EV manufacturing in the Hyundai Group, it’s one step closer to making EVs in the U.S. A sealant company recently became the 18th supplier to invest in the Group’s new plant in Georgia, which could open as early as next month. The first model to roll down its lines will be the Hyundai IONIQ 5.
But that wraps up today’s show, thanks for watching and have a great weekend.
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I’m not sure why the dealers are sending letters to Biden. Isn’t he considered a lame duck president at this point? His successor has been named regardless of the election it won’t be him. He has basically been absent since his pull out of the election. Hopefully the state and federal reps can provide some relief as I completely agree with the dealer’s prediction if current mandates stay in place. Additionally, manufacturers need to pivot quickly to ramp up efforts on hybrids. Good to see VW and Jeep are trying.
I doubt I’ll ever buy a Chinese vehicle, but I will say the Avatr SUV and BYD pickup look good.
It makes no sense that relaxing emissions rules would make EV inventories go down. It would seem the opposite, as car companies would make more gas hogs, so the gas hogs would get cheaper, and fewer EVs would be sold.
Kit- I think the assumption is automakers are producing EVs at volumes needed to meet regulation’s not based on sales. So, relaxing the requirements will allow them to produce to demand and not to some regulation. Which yes most likely will be less inventory. Sales will continue to be what they may and basically go back to a pull system of inventory. Now it’s a push at least with EVs.
Lamb — I, like Kit, am still having trouble wrapping my head around the logic. While EV sells are growing (slowly), many a still uneasy about such a purchase, so they may NEED to be pushed or given an incentive, to make a purchase. But, as seen with the steep rise in used EVs, a lower price in a quality EV will go a long way with hesitant buyers making the jump, not loosening emission rulers. And I don’t get dealers logic on not loosening the rulers will make the price of ICE vehicles go up?! I can see people waiting longer to purchase newer vehicles, yet, IMHO, the biggest barriers to EV adoption by the average person is price and range. Dealers seem to want to stick to what makes them good money, which is fine, but they want MOST amount of it. You would think that they would have a better time working to convince and/or easy the fears of potential buyers of what the industry is indicating will be the future, then attempting to pressure law makers to lighten the rules. It’s amazing to me that when the Mach-E and Lightning were I high demand, they were adding their dealer mark up on the MSRP. Now that selling have slowed, they want the admin loosen rulers as they focus on PHEVs and hybrids!
My apologies, I meant Lambo
Lambo nails the answer. Ford could stop Mach E production now and still have enough in current inventory to last a few years. They lose money on each one when they eventually sell and dealers hate them. Yet they have to have them in their production mix to meet emissions quotas. But hey, they endorsed and contributed to the very politicians pushing the mandates on them so it’s well deserved self destruction.
Mach-E inventory peaked at 500-some days, not a few years, and after major price reductions, is much lower than that, but still higher than it should be.
As far as emissions targets, no goverment ordered Ford to drop Fusion, Focus, and Fiesta, all of which would have helped meet those targets.
After looking on the news about the hurricane and heavy rains in Alabama, Georgia and the Carolina’s I’m sure it had it’s affects on the auto plants there. It will be of interesting here Sean’s comments on Monday.
Also, re. the hurricane, I would be very careful about buying a used car for some time to come. A number of under water cars will be on the market.
wmb- The reason ICE vehicles prices would go up without relaxed emission standards is because supply and demand. The regulations will limit the sales of ICE which certainly would cause there to be a scarcity, decreasing the availability. Anytime something is hard to get the price goes up.
If you imagine what would happen if the gov passed laws banning ICE this January 2025 you can imagine there would be a rush to buy the last 2024 models of ICE. Anyone that was thinking of replacing their current vehicle sometime soon and know an EV doesn’t work for them would rush out and snatch up the last of the ICEs. Which would drive the price up well over MSRP. Then once those are gone junkyards would start paying more for scrap cars because they know people will buying whatever parts they can to keep their ICE’s on the road which also means the used ICE cars and parts will also skyrocket. In addition to the damage done to the ICEs, dealers knowing no one has a choice anymore would have no incentive to lower the price of an EV. The gov could stop the incentives as there isn’t a choice anymore. So that would raise the price too. So now the EVs are back to costing 55K for a vehicle that had an equivalent ICE you could buy for 26k. Some people who can’t afford a 55K car are forced into the used ICE or EV market which drives those prices up too. So even a used EV is more than 26K. Thats the problem with forcing it too soon. They grabbed 2035 out of their ass and maybe it was an ambitious target or maybe they thought everyone would just want an EV. But reality is they still have enough downsides that not everyone wants or can afford them. Those that could did and why MACH-E and Lightning sales start out strong and fizzle quickly. This is a niche market still and the gov needs to regulate it with some balance toward demand. Sadly, the demand just isn’t there and I don’t think its people fighting the environmental initiative. I believe most people would agree to do their part to a point. However, our vehicles are a very important part of American lifestyle and way of life. The inconveniences and downsides/cost to an EV currently makes the purchase hard for many to justify. Spending more to get less is never an easy sell.
Had EVs launched with a lower cost than a comparable ICE. Had 300miles range and similar times to recharge with almost as many charging locations as gas stations they would have had no problem selling them. When we get there, they won’t. Until then it’s going to be a hard sell. The regulations need to mirror the demand to some extent or you risk huge damage to the industry. IMO