Ford's Q2 earnings show strong growth, driven by hybrid sales and a growing commercial truck software business, though EV adoption is slower and losses larger than expected. Stricter US emissions standards face pushback from automakers, while Hyundai and Kia use AI and blockchain to track supply chain emissions. VW's luxury brands, including Audi, report healthy sales despite weak EV performance, and VW is acquiring EV tech from Chinese automaker Xpung. BMW plans to launch level 3 autonomous driving in China soon. Geopolitical tensions threaten BYD's EV plans in India. Ford introduces a track-only Mustang with a powerful V8. Meanwhile, US Congress pushes to mandate AM radio in vehicles for emergency communication.
Topics:ford earningshybrid salesev adoption challengesus emissions standardssupply chain emissions trackingvw luxury brand salesautonomous driving level 3geopolitics and ev manufacturingford mustang track caram radio mandate
- Ford Boosts Earnings - Ford Sees Slower EV Adoption, Much Higher Losses - Biden Admin Rejects OEM Opposition to New Cafe Rules - Hyundai Uses AI to Help Suppliers Cut Carbon Emissions - Audi Healthy Despite Poor EV Sales - VW Buying Electronic Architecture from XPeng - BMW Brings L3 To China - India Says No to BYD Plant - Mustang Dark Horse R Is Pure Track Car - Congress Moving Forward on AM Radio Mandate
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
Ford posted its second quarter earnings yesterday, and the numbers sure do look a whole lot better than they did a year ago. The company sold one
point one million vehicles, up eight percent. That brought in forty five billion
dollars in revenue, up twelve percent, and it put one point nine billion dollars to the bottom line, which was more than double the seven hundred million dollars from last year. But the real interesting info came from the earnings call
that the company executives held with Wall Street analysts, and here are some of the nuggets that came out of that conversation. First, Ford is really putting
a heavy emphasis on hybrids. Ten percent of all the F one fifties and
fifty six percent of all the Mavericks sold in the US are hybrids, and Ford expects to quadruple bullets hybrid sales in the next five years. It's also
going to unveil that all new F one fifty and F one fifty Powerboost hybrid at the Detroit Auto Show in September. Ford Pro, which handles all the
company's commercial trucks and vans is a fifty billion dollar business with the potential to become a high margin software and service company like John Deere. Ford Pro already
has five hundred and fifty thousand paid software and service subscribers with fifty percent gross profit margins. That's the good news. The bad news is that CEO Jim
Farley says near term EV adoption is going to be slower than they expected.
CFO John Lawler says they're not going to see a contribution margin break even for its evs this year, and in fact, they see much higher losses coming.
Ford originally thought it would lose three billion dollars on EV this year.
Now it expects to lose around four and a half billion dollars, but it still believes it can deliver eight percent margins in twenty twenty six. The Biden
administration is getting heavy pushback from automakers about its proposal for stricter vehicle emission standards.
To meet the standard, EV market share would have to be sixty seven percent by twenty thirty two. General Motors warns that the new rules would cost
the auto industry anywhere from one hundred to three hundred billion dollars in penalties from twenty twenty seven to twenty thirty one. That's about thirteen hundred dollars to four
thousand, three hundred dollars per vehicle. But the administration calls that quote pure
speculation and inaccurate. It says the rules will cost about three billion dollars by
twenty thirty two, and it will save consumers more than fifty billion dollars in fuel savings over a vehicle's lifetime, and that overall the benefits will exceed costs by more than eighteen billion dollars. NITZA is expected to release its formal proposal
for the new Corporate Average Fuel Economy or CAFE targets later today. All the
major automakers have initiatives to reach carbon neutrality at some point, which includes slashing emissions from the companies that they get parts from, and that means suppliers have to agree to these terms to be awarded new contracts, and then they have to report carbon emission data back to the automakers, and as you can imagine, that can be a huge time and cost burden for suppliers. So Hyundai
and Kia are turning to AI and blockchain technology. To help, they developed
a new system that's able to compute carbon emissions at every stage of a company supply chain down to the raw materials, and then use that to predict future emissions. The group can then use that information to decide if it needs to
make changes or not, all while saving suppliers a bunch of time and money.
Even though we've been kind of bagging on Audie for poor EV sales, it's actually doing pretty well overall. In the first half of the year,
VW's luxury brands, including Audi, Bentley and Lamborghini, sold nearly nine hundred and twenty thousand vehicles around the world, which is up over fifteen percent from a year ago. An Audie accounted for more than nine hundred and seven thousand
of those nearly nine hundred and twenty thousand vehicles. Porsche's not included because it's
now an independent brand. Audi also sought sales go up two percent in the
first half of the year in China, which was fueled by a more than twenty percent increase in the second quarter. In total, for the first half
of the year, VW's luxury brands generated thirty four point two billion euros in revenue and we've got some more details of that deal by Volkswagen to buy EV technology from Xpung in China. VW is going to get x Pong's electronic architecture,
the smart software that travels on that architecture, and the hardware that goes along with it. And remember this is all the stuff that VW software division
called Carread was supposed to have done, but Carriad stumbled badly, which is why VW is now buying the technology from another automaker. Xpung will get fees
in parts of the profits for each unit sold once VW models on the platform start hitting the market. But it also turns out that Xpung really needed a
deal like this. It's suv called the G nine that rides on the same
platform has been a flop in the marketplace, and Xpong had a lot riding on it. So VW gets the tech that it needs and Xpung will get
some badly needed cash flow. Level three autonomous driving, which is hands off
and eyes off, keeps making inroads in the US and Europe, and now BMW is gearing up to introduce level three driving in its vehicles in China.
Gascou reports that BMW has started taking steps to make sure it meets all regulatory requirements and that it will launch the technology in China by the end of the year or early next year. Geopolitics is killing BYD's deal to build electric vehicles
in India. Earlier this year, the Chinese automaker and its joint venture partner
in India, Mega Engineering and Infrastructures, submitted a billion dollar proposed to the Indian government to produce evs in the country starting in twenty twenty five, but several agencies said they're opposed to it over security concerns, and even though a formal decision hasn't been made yet, Reuters reports that BYD wants to drop out of the deal entirely. India has stepped up scrutiny of Chinese investments because of
border disputes between the two countries, and it also rejected a billion dollar investment from Great Wall Motors to build vehicles in the country. Ford is pushing the
new Mustang into racing more than ever before, and it's now coming out with a track only version of the car that it expects to compete in Mustang only racing series under the hood as a five Leader V eight, similar to the one found in the Mustang dark Horse. It will make five hundred plus horse
power and is mated to a Tremaic manual transmission. The car also comes with
a host of other performance in safety upgrades that make it suitable for the track, but as many of you probably know, those upgrades don't come cheap.
The Mustang dark Horse are starts at one hundred and forty five thousand dollars and deliveries start next year. Automakers would love to get rid of AM radio in
their cars. Automotive News reports that BMW, Mazda, Polestar, Rivian,
Tasla, Volkswagen, and Volvo do not offer AM radio in their evs, but by partisan bills in the US Senate and House are moving forward that would mandate AM radio as standard equipment. A lot of people seem to believe that
AM radio is pass and that no one listens to it anymore, but according to the Nielsen report, fifty eight point eight million people listen to AM radio every week and about eighty two million listen every month, and there are well over four thousand AM radio stations in the US. AM radio is considered a
key communication outlet during emergencies like hurricanes or other severe weather, which is why Congress wants to mandate it as standard equipment. That brings us to the end
of today's show. Thanks for tuning in, and I hope that you have
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