AD #3921 – Tesla Q3 Earnings Stun Critics; Massive Lithium Deposit Discovered in Arkansas; CATL Develops Sodium Battery for PHEVs & EREVs

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

TESLA Q3 EARNINGS STUN CRITICS
Tesla laid down some impressive numbers for the third quarter that have stunned some critics. It sold almost 463,000 vehicles which was up 6%, and its revenue came in just over $25 billion, which was up 8%. While those are OK numbers, everything else was stunningly good. Its adjusted EBITDA came in at $4.6 billion, up an impressive 24%. Its net income hit $2.1 billion, up a strong 17%, and its free cash flow soared to $2.7 billion, up a whopping 223%. Investors liked what they saw and bid the stock up by 14% in pre-market trading, though we’ll have to see how it plays out for the rest of the day. One item worth noting is that Tesla cut its operating expenses by 6%, which it achieved by cutting R&D by 10% and its SGA, or selling, general and administrative expenses, by 5%. And that’s worth noting because you almost never see an automaker cut its operating expenses when sales and production are growing.

MASSIVE LITHIUM DEPOSIT DISCOVERED IN ARKANSAS
Could Arkansas become the biggest supplier of lithium in the world? The U.S. Geological Survey estimates that there is between 5 and 19 million tons of lithium under Arkansas, which at the low-end, is enough to meet nine-times the projected world demand for EV batteries in 2030. The only issue is finding a way to get it out that’s environmentally friendly and cost effective. But there are interesting pilot programs going on elsewhere to extract lithium from brine without depleting the water table. Lithium is found in hard rock, in clay and in brine. The Arkansas deposits are in brine, the leftover of an ancient sea. The U.S. currently imports more than 25% of its lithium. So, this could be a game changer for the U.S. supply chain.

ARGENTINA SCALES BACK LITHIUM PRODUCTION
And while that lithium will be needed to meet future EV growth, currently, demand for the metal is slumping due to the slowdown in EV demand. Lithium prices have plunged 80% since the start of last year. And because of that, Reuters reports that mining companies in Argentina, which is the fourth-largest producer of lithium, are scaling back operations. And it’s also spurring more mergers and acquisitions, so miners can cut costs. But the scale back in lithium production has analysts worried that there will be a supply shortfall later in the decade, when demand is expected to pick back up.

VW DELAYS U.S. LAUNCH OF ID.7…AGAIN
Earlier this year, Volkswagen delayed the launch of the ID.7 electric sedan in the U.S. indefinitely and it didn’t set a date for when it would go on sale. But now we have a better idea when it will launch, well sort of. The head of the VW Group of America, Pablo Di Si, told Automotive News that the ID.7 will “probably” launch next year but also added that the company hasn’t decided yet. Officially no reason has been given for the delay, but right now sedans don’t sell well in the U.S.

GM DELAYS EV MOTOR PRODUCTION
And VW isn’t alone in delaying EV plans, General Motors is pushing back EV motor production at its St. Catharines plant in Canada. According to Canadian union Unifor, EV motor production will kick off in 2027, 16-months later than originally planned.

 

CATL DEVELOPS SODIUM BATTERY FOR EREVS, PHEVS
Chinese people now buy more New Energy Vehicles or NEVs than they do ICEs, diesels or hybrids. And within that group of NEVs, PHEVs, especially extended range electrics are growing the fastest. So, CATL is going to start catering some of its battery business specifically to that section of the market. It’s coming out with the new Freevoy Super Hybrid Battery for PHEVs and EREVs that offers more than 400 kilometers or about 250 miles of range and 4C charging capability, which means it can fully charge in 15 minutes. Better still, the sodium-ion chemistry is largely unaffected by bitterly cold temperatures. CATL says it will easily charge at 30 below C, which is -20 F. And it provides seamless driving at 20 below C, which is -4 Fahrenheit.

STELLA USING SOLID-STATE BATTERY IN PILOT PROGRAM
Speaking of batteries, Stellantis is on a path to launch vehicles with solid-state batteries before the end of the decade. In 2021 it invested $75 million in solid-state battery startup Factorial and just announced it will put out a demonstration fleet of Dodge Charger Daytonas with Factorial batteries in 2026. The fleet will be used to help validate the cells in real-world conditions. Solid-state batteries offer advantages like reduced weight, better performance and the possibility for reduced cost because they have higher energy density, which means a smaller pack could still provide the same amount of range. Specifically, Stellantis says it will test Factorial cells with an energy density over 390 Wh/kg. That’s a little hard to quantify in a short amount of time, but really good lithium-ion batteries in EVs today have about 300 Wh/kg, while the top lithium iron phosphate or LFP cells are roughly 200 Wh/kg. Right now the big hurdles to solid-state batteries seem to be the ability to ramp up to mass production and the cost it will take to get there. To me that suggests early versions could be expensive and will probably first come out in premium and performance vehicles.

STELLA ADDING MOVING GROUND PLANE TO WIND TUNNEL
And to make sure all of its EVs achieve their best possible range, Stellantis is spending nearly $30 million to upgrade its wind tunnel in Auburn Hills, Michigan. The investment was used to install Moving Ground Plane technology, which is essentially a series of belts that spin the tires and simulate the road moving underneath the car, all while stationary in the tunnel. It’s an important addition because the wheels and tires can account for up to 10% of total drag. Overall it means designers and engineers can more accurately simulate real driving conditions.

HYUNDAI, RENAULT Q3 EARNINGS
At the top of the show we reported Tesla’s blowout Q3 numbers. Well, Renault and Hyundai reported their numbers, too. Hyundai sold 1 million vehicles globally up 3% from a year ago. Revenue hit $31.1 billion, up nearly 5%. It posted an operating profit of nearly $2.6 billion, up 6.5%, and put $2.3 billion on the bottom line, up 3%. Note that Tesla made nearly the same profit that Hyundai did, even though Tesla sold half as many vehicles. European automakers don’t give out much information in their quarterly reports, they save that for their half year, and full year reports. So all we’ve got from Renault is that it sold about 482,000 vehicles globally, down 5.6% and its revenue came in at €10.7 billion, up just under 2%.

FORD TRANSIT ICE & BEV HAVE SAME MSRP
The Ford Transit and E-Transit are getting an update for the 2025 model year that includes factory-installed upfit packages and interior accessory kits. But the most interesting change is that the gas and electric versions now have the same price. They both start at $51,000. But when you factor in federal and state incentives for electric vehicles, the E-Transit is cheaper.

And don’t forget to tune into Autoline After Hours at 3PM EST today. We’ll be talking about the biggest news stories of the week, like Tesla’s earnings, the looming CARB ZEV mandate disaster and what that giant deposit of lithium might actually mean. Thanks for tuning into this show and I hope to see you later today.