AD #3940 – VW Union Offers $1.6 Billion In Cuts; Exxon & LG Sign U.S. Lithium Deal; Stellantis Shows Off New Platform

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

EXXON & LG SIGN U.S. LITHIUM DEAL
If Big Oil gets interested in the EV market it could be a game changer. Well, ExxonMobil and LG Chem signed a deal for Exxon to supply LG with 100,000 metric tons of lithium carbonate from its giant lithium mine in Arkansas. LG will use that lithium for its cathode plant in Tennessee that’s currently under construction, which will have an annual capacity of 60,000 metric tons. However, the lithium deal is a non-binding agreement and Reuters reports that it’s contingent on Arkansas setting lithium royalty rates, similar to royalties for oil. Exxon’s lithium site in Arkansas is part of the Smackover Formation, which is reported to have enough lithium to meet nine-times the projected world demand for EV batteries in 2030.

MEXICO LIKELY TO IMPOSE TARIFFS ON CHINESE CARS
Mexico has zero tariffs on Chinese cars and Chinese cars are flooding the market. This year over 500,000 Chinese-made cars will be sold in Mexico. Next year it could hit 625,000, which would account for about 45% of all sales. So US and Canadian leaders are starting to complain that Mexico may not be a reliable trade partner. Some are even talking about dropping Mexico from the USMCA free trade agreement. Michael Dunne, an automotive expert on China, points out that Mexico exports over 2 million cars a year to the U.S. And that’s why Dunne predicts that Mexico will soon hit Chinese cars with big tariffs because Mexico cannot afford to lose access to the US and Canadian markets.

  

VW LABOR UNION OFFERS $1.6 BILLION IN CUTS
There’s a lot of Volkswagen in the news today. As you know, the company warned its workers that it wants to close three plants in Germany. The union IG Metall, wants nothing to do with plant closings and is countering with a proposal to cut costs by $1.6 billion, largely by giving up future raises and bonuses. But that does nothing to address VW’s current costs or its excess manufacturing capacity. German labor costs average $66 an hour, compared to about $44 in the U.S. And VW has the highest proportion of labor costs as a percentage of sales of any company in the world, even higher than BMW or Mercedes-Benz. So IG Metall’s offer to give up future raises and bonuses won’t fix VW’s current labor cost problems. But the union promises to go on the warpath if the company closes any plants in Germany.  

VW REPLACES HEAD OF NORTH AMERICA
Over in the U.S., Pablo Di Si, the CEO of Volkswagen of America, asked to step down immediately. He’ll be replaced by Kjell Gruner, who will move over from Rivian where he was the chief commercial officer. Gruner has a rich automotive background. He started his career with the Boston Consulting Group, then moved to Porsche, then to DaimlerChrysler, then back to Porsche when he became CEO of Porsche of North America, then over to Rivian. VW is having a decent year in the U.S. market. Through the third quarter its sales were up 6% even though the whole market was up less than 1%. 

VW LAUNCHES ELECTRIC TRACTORS IN AFRICA
And here’s one last interesting Volkswagen tidbit. It just started making electric farm tractors in Rwanda for the African market. It has a 20-kilowatt motor, about 27 horsepower, and a 35-kilowatt hour swappable battery, which is recharged with solar panels.

STELLANTIS SHOWS OFF NEW PLATFORM
Stellantis is showing off what its STLA Frame platform looks like, which is one of four new architectures that will underpin the vast majority of vehicles it offers around the world. They’ll initially come as either an extended range electric or pure BEV, but the platform can also support ICE, hybrid and hydrogen-based powertrains. Extended range electrics or EREVs feature a 3.6L V6 engine under the hood, which spins a 130-kW generator that can either send electricity to the battery or directly to the front and rear drive modules. Those modules combine for over 660 horsepower and when you throw in the 92-kWh battery pack, the setup is capable of 690 miles or 1,100 kilometers of range, hauling a payload of 2,700 pounds and towing up to 14,000 pounds. BEVs have just a little less power and either a 168- or 229 kWh battery pack that provides up to 500 miles or 800 kilometers of range. The STLA Frame platform offers both 400- and 800-volt EV architectures. That allows for fast charging up to 350 kW, which can add 100 miles of range in 10 minutes. The all-electric Ram REV and the EREV Ramcharger will be the first to use it. They were supposed to launch late this year, but Stellantis CEO Carlos Tavares says they’re being delayed until the first half of next year, so it can validate the trucks properly. After the Ram trucks, Jeep will be the next to use STLA Frame, which is a little bit interesting because the other EVs it’s talked about, the Wagoneer S and Recon, both reportedly use the STLA Large platform. So, either there’s been a change or something new is coming. No word on what brand will follow after Jeep, but the platform can support trucks, SUVs and light commercial vehicles.

NIO REPORTS EARNINGS DROP
Just yesterday we were reporting that Chinese automakers other than BYD and Li Auto looked like they are on the road towards turning a profit, but today NIO reported that its revenue fell and it lost $709 million, which was $70 million worse than a year ago. NIO’s sales dropped in October even though the overall Chinese car market shot up, and that price war also forced the company to cut prices. Even so, the fact that other automakers are doing so much better suggests that NIO has other problems that are holding it back.

MAGNA GETS CHINESE ORDER FOR DEDICATED HYBRID DRIVE
Magna says it got an order from a leading Chinese OEM for its 800-volt Dedicated Hybrid Drive unit, which is meant for 4WD passenger cars and SUVs. It bolts up to an IC engine like a normal transmission, but inside are two electric motors. One is a traction motor that generates up to 120 kW or 160 horsepower and can drive the wheels on its own in low demand situations. Once the battery is depleted enough, the system turns the engine on to drive the other motor generator inside the drive unit, which provides electricity to the battery. Or if more power is needed, the engine and traction motor can work together. Magna says it can reduce fuel consumption by up to 33% on the WLTC cycle. It also used a platform approach with a scalable number of gears, so the drive unit can be used in a wide range of vehicle segments. Production kicks off in the third quarter of next year.

LECTRON NOW PRODUCING MORE NACS ADAPTERS THAN TESLA
Lectron, a company that makes EV charging components, is ramping up production of NACS to CCS adapters and says it’s now producing 12,000 a week. That’s more than Tesla, which is producing 8,000 a week. The adapters give non-Tesla owners access to the Supercharger network. But Tesla has been slow to roll out its adapters and Ford told owners to stop using them because they had issues with slow charging speeds and said they could damage the charging port. So, Ford turned to Lectron to supply it with NACS adapters and with all major automakers making deals to gain access to Tesla Superchargers, Lectron says demand for adapters continues to rise.

GM CLAIMS LARGEST HANDS-FREE CARAVAN IN HISTORY
To show off its hands-free driving technology and how widely available it is, General Motors set what it calls the largest hands-free caravan in history. The automaker drove all 20 of its models available with Super Cruise across the Bay Bridge in California, which connects San Francisco and Oakland. GM has the most models available with hands-free driving and it will continue to expand it in the upcoming Cadillac Vistiq and Escalade IQ EVs.

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