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Runtime: 9:33
0:00 Hyundai Makes Massive U.S. Investment
1:38 Hyundai Puts Inster EV on Steroids
2:04 VW Partners on AV Tech for ICEs
3:11 Will Regional Hubs Work for GM?
4:54 Waymo Expanding to Washington DC
5:27 ICE Sales Drag Down Entire EU Market
6:24 Xiaomi Raises Billions with Share Sale
7:02 Audi Gives PHEVs Bigger Battery
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HYUNDAI MAKES MASSIVE U.S. INVESTMENT
The Hyundai Group is making a massive investment in the U.S. over the next three years. Between now and 2028 it’s going to spend $21 billion to expand production, invest in technology and help grow the EV charging infrastructure. The U.S. is the Group’s biggest sales market, which helps explain the company’s willingness to pump so much money into the region, but it should also allow the Group to avoid import tariffs and comply with any rules or agreements around the amount of local content required in a vehicle. Here’s a breakdown of how that $21 billion will be spent. $9 billion will go towards expanding and upgrading its production facilities, with the goal of increasing U.S. production to 1.2 million units. $6 billion is being allocated to localize production of certain parts, like battery packs, and build a new steel mill in Louisiana that can make up to 2.7 million tons of steel a year. Another $6 billion will help the Hyundai Group expand partnerships, including robots with Boston Dynamics, AI and AV solutions with NVIDIA, eVTOLs with Supernal and supplying robotaxis to Waymo. And the last $6 billion is being invested into energy projects, like the EV charging network. The Group says these investments will result in 14,000 new direct full-time jobs and more than 100,000 total job opportunities.
HYUNDAI PUTS INSTER EV ON STEROIDS
Speaking of Hyundai, it teased a new video-game-inspired version of its Inster EV that it says it will officially unveil early next month. With a massive rear wing, large fenders with air louvers on top and what looks like a big front diffuser, the Insteroid as it’s called, looks like it’s ready to race up Pikes Peak. But for now, this is a one-off concept car.
VW PARTNERS ON AV TECH FOR ICEs
Volkswagen’s attempts to develop its own software through CARIAD, a division set up specifically to develop software, have not gone well. It posted an operating loss of 2.4 billion euros last year, issues have caused vehicle delays and according to reports VW is going to slash a significant amount of CARIAD’s workforce. This is why the automaker is turning to Rivian and Horizon Robotics for help on software, ADAS and autonomous driving. But those partnerships really only cover VW’s electric vehicles. So, it’s teaming up with Valeo and Mobileye to develop driver assistance systems for ICEs. The two suppliers will provide all the hardware, including cameras and radar, and the software needed to run the systems, which are all controlled by a centralized unit, which replaces multiple computers. The tech will be implemented into upcoming vehicles based on the MQB platform and will have up to Level 2+ hands-free driving capability.
WILL REGIONAL HUBS WORK FOR GM?
GM hopes to cut thousands of dollars from its vehicle logistics costs and compete more with automakers that offer direct sales by expanding its use of regional hubs. These hubs are filled with rows and rows of vehicles waiting to be shipped off to a nearby dealer. So, if a certain brand or model isn’t available at a particular dealer, one gets sent from the hub, which can cut shipping time from as much as 3 months to as little as 4 days. Only EVs have filled these hubs since they launched in 2022 but now the 3-row Chevy Traverse is being thrown into the pool. With the speedier delivery through its online sales tool, GM says it will eventually lead to savings of $2,000 per vehicle. And there’s meant to be advantages for dealers too. GM owns the vehicles while they’re at the hubs and covers the cost to ship them. But that also causes problems. Because GM owns the vehicles, they’re only listed on dealer and GM-owned sites online, not the popular car-buying sites that most people visit. For that reason, Ford dropped a very similar program because its dealers never really got on board and it’s reverting back to its traditional sales process. So, we’ll be interested to see if the same thing happens to GM.
WAYMO EXPANDING TO WASHINGTON DC
Waymo continues to expand. It announced plans to launch its autonomous ride-hailing service in Washington DC next year, however it still needs approval to deploy its fleet because the city doesn’t currently allow fully autonomous operations. Right now Waymo operates in San Francisco, Los Angeles, Phoenix and Austin and later this year, the service expands to Atlanta and Miami. Waymo says it’s now providing 200,000 fully autonomous paid trips each week.
ICEs DRAG DOWN ENTIRE EU MARKET IN FEBRUARY
Car sales in Europe were down in February. According to the European Automobile Manufacturers Association, automakers sold around 963,500 vehicles last month, down 3.1% from a year ago. Spain was the only major market in the region to see an increase in sales. It was ICE vehicles that dragged down the car market in February. Sales of gas-powered cars were down more than 23% and diesel sales dropped 28%. While sales of electrified vehicles increased it wasn’t enough to offset that drop in ICE sales. Hybrids were up 18%, PHEV sales were flat and more than 164,000 pure-electrics were sold, up 26% compared to a year ago. But despite the big gain for BEVs, Tesla’s sales slumped 40% in Europe last month.
XIAOMI RAISES BILLIONS WITH SHARE SALE
Chinese EV startup Xiaomi is seeing impressive growth and it just raised a bunch more money. The company announced it raised $5.5 billion in a share sale on the Hong Kong Stock Exchange. Xiaomi says the money will go towards business expansion and its research and development. As we reported last week, the company is hiring former auto executives for its operations in Europe. And Xiaomi also recently increased its sales target this year to 350,000 vehicles, which is 50,000 units higher than its previous forecast.
AUDI GIVES PHEVs BIGGER BATTERY
Audi is adding plug-in hybrids to both the sedan and wagon versions of the A5. Two power levels are offered, 220 and 270 kilowatts. The setup features a 2.0L gas engine, a 105-kW electric motor and a nearly 26-kWh battery that has 45% more capacity than previous PHEV batteries. That bigger pack helps return an electric range of 110 kilometers or 68 miles, which is pretty good for a PHEV. The 220-kW version moves from 0-100 km/h in 5.9 seconds, while the 270-kW version does it in 5.1 seconds. The plug-in hybrid A5 is available for order at the end of the month in Europe. The sedan starts at €62,500 or $67,650 and the wagon starts at €64,150 or just over $69,000.
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The Stock Price of Charge Point (CHPT) is extremely low at 67 cents per share today. If Hyundai buys up Charge Point it will have a ready-made Electric Charging Station network. It is obvious that ChargePoint is in need of new Management. Hyundai’s joint ventures with GM on EV’s could be very beneficial with the acquisition of Charge Point.
My Issue with the GM is that The Chevy Traverse, GMC Acadia, and Buick Enclave have replaced the prior generation V6 with a Turbo 4 Cylinder for such a large people mover. GM needs to reintroduce a V6 with the 2026 Model Year in order for these vehicles to sell. Likewise, the Chevy Equinox, and GMC Terrain need a 2.5 Liter powerplant to ready boost sales when competing against the Toyota Rav4 and Honda CR-V.
GM is doing what everyone else is doing, replacing V6s with turbo fours. Mpg is a little better with the four, but NVH is generally worse. One of, and I think the highest volume CR-V powertrains is a 1.5 turbo/CVT, like the new Equinox and Terrain. The non-hybrid RAV4 uses a 2.5 and 8-speed auto, but the much more efficient hybrid is the best selling RAV.
https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=48110&id=48949&id=45384
I know the brass in Ingolstadt won’t like hearing this, but the front of that new Audi sure looks like a Kia/Hyundai product to me.
I think eliminating the V6 in the GM triplets was a mistake. They should have offered it as an extra-cost option. GM buyers are used to a V6 in that vehicle. Offering it as an expensive option would push buyers to reconsider the turbo 4. Within a couple of model years they would be selling 90% of the build with the turbo 4. Then they could drop the V6. This is the same mistake that Ram made by eliminating the V8 in the all-new 2025 Ram pickups. And now they will soon be reintroducing the Hemi V8. It appears that Chevy benefited the most from Ram’s powertrain blunder as their Silverado sales really boomed as Ram sales were collapsing.
These companies should look at how Ford introduced a V6 turbo in their F-150, then offered a second one, and then even a hybrid, but never eliminated the V8 as an option. The transition took a few years, but they now sell less than 10% of F-150s with a V8 and did not alienate their buyers. I would not be surprised if they dropped the V8 in the next few years, especially if they decide to drop it from the Mustang lineup.
I just read Consumer Reports’ test of the new Traverse, and they really ragged on the new engine. Same performance, same gas mileage, and way more, and less pleasant engine sounds. H/K made a good decision to keep V6s in their largish crossovers. Palisade/Telluride are getting very good reviews. Explorer uses both four and V6 turbos, but I don’t know what the mix is. It seems like most recent Explorers on the road are police trucks.
I’m not surprised that Chevy/GMC benefitted most from Ram’s dropping the V8. For people wanting a V8, rather than a turbo 6, GM had the best options. All indications are that the turbo six in the Ram works very well, but reliability is probably unknown.
Wow. 21 BILLION and 100,000 jobs just from the threat of tariffs. Guess people like Kit gotta really be second guessing everything they been fed. Good to hear the investment in steal being made here in the states. Eli Lilly just announced 27 billion addition to US manufacturing. Taiwan semiconductor manufacturing Co has committed to 100B in Arizona chip manufacturing. Added to the old news about Apple adding 500B over the next 4 years including 20,000 R&D workers.
Sounds like all GM needs to do in order to make the regional distribution model work for them is allow dealers to see what’s available at those centers. How many times have you heard the salesman say. I don’t have it but I can get it! If they can get within a couple days I think they could be very successful especially if the consumer gets some of that $2k in savings.
Toyota made the step backward, replacing V6s with turbo fours in Highlander, Tacoma, Lexus RX and others, with little, if any benefit. That doesn’t affect me, though. The only Toyotas I buy are hybrids.
Hyundai has made large market share gains in the US in recent years, at the expense of Nissan and Mitsu above all, but also the domestics, and even Honda and Toyota.
So their project makes sense, and it will create REAL (not Government ‘work’ from home phonies) and WELL PAYING (not McDonalds and Walmart) American Jobs,
which will result in MORE tax revenue And Less welfare spending for the deeply indebted US.
That’s the idea of the threat of tariffs. Not that they will bring in such huge amounts, as Trump repeatedly insists, but that their threat will bring foreign companies to the US, and/or, in the case of reciprocal tariffs the foreign governments will negotiate a lowering of their outageous, explicit or implicit (like the VAT tax in Europe) tariffs. After all, in this game, the US has most of the cards, as we import far more products than we export, so the foreign governments have very little clout and are at risk of losing their greatest market to sell their stuff.
What are 100,000 “job opportunities,” possible jobs somewhere that may or may not exist? Time will tell how this all turns out, but these new H/K jobs will probably mostly replace higher paying jobs with GM, Ford, and Chrysler. Also, they will result in higher prices, than if more vehicles, and especially parts came from our former allies and trading partners to the north and south.
The problem with OEM inventory lots is the retail interface has less incentive to “move the iron.” Remember, dealers make more money on the service shop, used car sales, and financing. A modicum of new car sales tolerated to support the real profit centers. So, if the new car inventory is not on the dealer’s dime and is out of sight, it is also out mind. JMHO
He’s back…. Anybody remember what handles Regulus went by before this forum threw him off of it a few years ago because of all his trash talking and upper-case rants?
Ziggy, great question. I was thinking the same… not from today’s comment, but many before this.
ziggy: I know it is very hard for you, but try, instead of calling me names, to prove to me that anything I said here today is wrong.
Of course you can’t. If you could, you would already, instead of personal attacks.
My favorite way to buy cars is factory orders, even if it takes a few few weeks, or three months for cars from Europe. GM’s thing should work for a lot of potential customers. Unfortunately, Toyota and Honda won’t do customer orders, just finding one at another dealer and selling you a used car at new car prices.
Hey Regulus, you still got the BMW 6 series that you used to go on and on about? I see you are still part of the MAGA movement, some things never change, huh?
“Good to hear the investment in steal [sic] being made here in the states.” Hyundai needs to build those mills in Louisiana quickly, before the EPA is re-started in about 4 years. Steel mills, like refineries are something you don’t want to be downwind from. The EPA has, for now, removed any environmental justice consideration, and these mills are likely to be near low income areas which would be adversely affected by them, though gaining a few jobs.
Time will tell how much of this “promised” stuff actually happens. H/K are certainly an up and coming dominant vehicle seller in the US, though. Interestingly, the highly related Telluride and Palisade are assembled about halfway around the world from each other, the Kia in Georgia, the the Hyundai in South Korea. I suspect one of the first new products assembled in the US, where most are sold, would be Palisade. A lot will be in flux, given the unpredictable EV demand, with H/K being aggressive in the EV market.
Interestingly, while Hyundai and Kia brands are doing very well, Genesis struggles, even though they have some decent products. Maybe they need to sell them at bargain prices, as Lexus did early on with the genuine S-Class competitor LS400 for about 2/3 the price of the Benz. That’s what got Lexus established, and as a result, they still do well with all of their so-so crossovers.
The H/K investments are great news. With a couple of major international banks pledging to finance up to 1 trillion dollars in capital investments specifically in the continental USA over the next 2 years, I suspect there will be many more announcements to come. It will be interesting to see what share of that Trillion will go to automotive and what will go to other industries. I suspect Auto will take a significant portion of that as it is a capital intensive industry. Oil and Gas will likely take the lions share as it is even more capital intensive than auto. Of course oil and gas expansions means more sales of trucks which favors the USA auto manufacturers. I also suspect that there will be an expansion in energy projects using a significant portion of that trillion dollars which will also favor truck sales. I hope it all comes to fruition and will enjoy the ride if it does.
Biden’s CHIPS act is subsidizing semiconductor production in the US, and I suspect a lot more money from various sources will go into that, very capital-intensive business. Unlike the so-called “energy emergency,” the semiconductor business seems like an actual emergency, with Taiwan, which is constantly under threat from China, being the global leader in chip production.
Regardless of the current anti-environment administration, will there be that much new oil drilling in the US? The US is currently producing more oil than any other country, but has far from the largest reserves. Oil companies are producing oil on less than half of federal land they currently have leased, so could could have been doing a lot more drilling over the last decade or two, if they wanted.
There is definitely more oil drilling planned in the USA. In fact my relative lives in oil field country and there was a contraction during the Biden years but they are now booming down there. It doesn’t get much press, but they have exploded in activity.
It will be interesting to see how the trillion dollars is split. The trillion from the banks is in addition to the chips act so there is much more to happen beyond just chips which is exciting for everyone.
There was a “retraction” during the Biden years? Production increased during those years.
https://www.eia.gov/todayinenergy/detail.php?id=61545