AD #3996 – New Twingo World’s Most Efficient EV?; Mercedes Cutting Production; GM Has Short-Term Solution for Tariffs

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

TESLA TO SELL CARS IN INDIA
Tesla has avoided selling vehicles in India because of high import taxes but that’s about to change. The country currently slaps a 100% tariff on imported vehicles that cost $40,000 or more, and a 60% tariff on cars that cost less. So, in order to avoid the tariffs, Tesla would have to build a plant in India, which President Trump says would be “unfair” to the U.S. But last week Elon Musk met with India’s Prime Minister in Washington and now India is expected to lower its import tariffs on EVs as part of a deal with the U.S. And it could also raise the cap on EV imports from 8,000 vehicles to as many as 50,000. Likely as a result, Tesla started listing job openings in India earlier this week, including staff for showrooms and to manage orders and deliveries. And now Bloomberg reports that Tesla will start shipping vehicles to India in the next few months and that it plans to start selling the vehicles in Mumbai, Delhi and Bangalore. But it’s not yet known which models it will import or what factory they’ll come from.

GM CAN DEAL WITH TARIFFS–SHORT TERM
And speaking of tariffs, General Motors says it can withstand President Trump’s tariffs in the short-term. GM Chief Financial Officer Paul Jacobson says that the automaker can shift production at existing plants that are “relatively low cost,” but if the tariffs become permanent GM will have to discuss if it needs to move assembly. Jacobson also says that GM is quickly cutting inventory at its foreign plants by 30%, and moving them to the U.S. as fast as possible, so they don’t get hit with the 25% tariff that Trump is threatening to start on April 2.

NISSAN DRAGS DOWN RENAULT’S EARNINGS
Renault reported its earnings for last year and the numbers look pretty good, except for one big problem it has with Nissan. First the numbers. Renault sold 2.2 million vehicles globally last year, up only 1.3%. Its revenue jumped 7.4% to €56.2 billion. Its operating profit was up 3.6% coming in at €2.5 billion. But its net profit fell by €1.4 billion, coming in at only €891 million. That’s because Renault always counts on Nissan to provide it with a big cash infusion since it owns 37% of Nissan. But Nissan’s profits have fallen 90% and that really hurt Renault’s bottom line. In fact all the problems at Nissan cost Renault €2 billion in extra costs and lost profits.

RENAULT TWINGO: MOST EFFICIENT EV IN THE WORLD?
During its presentation to analysts, Renault dropped some pretty interesting facts about the replacement for its Twingo subcompact car, which is now going fully electric. The design looks terrific and stays true to the look of its predecessors. But a lot of the initial engineering was actually done at Renault’s advanced R&D center in China. The whole program was done in less than 2 years, which is lightning fast for traditional automakers. It has 30% fewer parts than the Renault R5. It uses a 23 kWh LFP battery pack that Renault claims will use only 10 kilowatt-hours of electricity for every 100 kilometers it’s driven. That converts to 6 miles for every kilowatt hour, which means it could be the most efficient EV in the world. Admittedly, it’s a dinky little car, with a dinky little battery, but that’s still an impressive level of efficiency. The Twingo EV will be built in Europe and goes on sale next year.

MERCEDES HUNKERS DOWN, CUTS PRODUCTION
2024 was a rough year for Mercedes and as a result it’s making a number of moves to make the company more efficient. It sold just under 2 million vehicles worldwide last year, a drop of 3%. That dragged revenue down 4.5% to 145 billion euros. Mercedes’ Earnings Before Interest and Taxes came in at about 13.6 billion euros, which was down nearly 31%, while net profit fell over 28% to 10.4 billion euros. And the numbers for this year might not end up much better. Mercedes says it’s starting the most intense product launch program in the company’s history, beginning with the all-new CLA this year. That will be followed by all-electric versions of the GLC, C-Class and E-Class. Mercedes also announced that its next-gen van architecture won’t be electric-only and will have an ICE variant, called Van Combustion Architecture, that shares about 70% of its components and will roll down the same assembly as the BEV version. And the company will even come out with a smaller version of the G-Class. All that product will result in its investments peaking in 2025, only starting to ease from 2026. So, to help turn things around Mercedes plans to cut its global production costs by 10% by 2027. On top of plants it exited in France, Brazil, Russia and Indonesia, the company says it’s also considering adjustments to its dealer network and production footprint in China. Globally it will trim manufacturing from about 2.5 million units to between 2 and 2.2 million. But it says it won’t close any plants in Germany. Production capacity will instead be averaged out to 300,000 units at each site. However, Mercedes plans to cut fixed costs as well by 10% over the next three years that will include discussions with its works council as well as a reduction of management positions.

KIA PV5 EV COMMERCIAL VAN
Kia is providing a better look at what the production versions of its new commercial van will look like. The PV5 is set to enter production sometime this year and the company is showing off the Passenger and Cargo models. They’re a very simple box shape, which should provide good space whether you’re moving people or packages. But other than saying the vehicle will leverage the company’s EV technology, it didn’t reveal many details. That will come at the end of this month at its second annual Kia EV Day, where it plans to show conversion options, derivative models and reveal the global business strategy for all-new commercial vans or what it calls Platform Beyond Vehicles.

$12,297 A YEAR TO OWN A NEW CAR
Everyone’s complaining about the high cost cars and with good reason. The AAA, or American Automobile Association, published its latest numbers on what it costs to buy a new car and drive it for 5 years. Are you sitting down? It comes to an average of $12,297 a year. That includes the depreciation the car goes through, the financing costs over 5 years, the insurance you’ll pay, the fuel you’ll buy, and all the maintenance and repairs you’ll go through. The AAA calculates these costs by looking at 9 different vehicle categories and takes the top 5 selling models in each category. In 2019, the AAA said the average cost per year was $9,282, so the cost has gone up by $3,000, which helps to explain why new car sales have never recovered to their pre-pandemic level.

BORG-WARNER SHUTTERS TWO BATTERY PLANTS
The transition to electric vehicles is going slower than anticipated, which is forcing automakers and suppliers to scale back EV plans and now it’s BorgWarner’s turn. The supplier is planning to close two plants in the Detroit area and layoff 188 workers from the battery pack manufacturing business it acquired four years ago because it’s shifting battery production to South Carolina. Last year, BorgWarner announced it’s aiming to save $100 million over the next few years through job and spending cuts due to falling EV demand.

CAR CRITICS ON AUTOLINE AFTER HOURS
New cars are going to be the topic on Autoline After Hours today. We’ve got two car critics coming on the show, Mark Phelan from the Detroit Free Press, and Greg Migliore, the Editorial director at VerticalScope. And they’ll dive into the pros and cons of the newest cars that are just getting introduced. So join John and Gary when the show goes live at 3 pm eastern time.

But that’s a wrap for this show. I hope to see you later today.