Germany's automotive industry faces significant job losses due to the shift to electric vehicles, with major suppliers cutting thousands of positions. European automakers like Volkswagen, Renault, and Stellantis consider collaboration to compete with Chinese EV makers. Meanwhile, EV battery prices are dropping rapidly, enabling automakers to reduce EV prices to boost sales. Ford slashes Mustang Mach-E prices amid competition and reduced tax credits. Tesla's Cybertruck faces rust concerns linked to rail dust, not the truck itself. GM halts sales on some EVs due to software issues, while Rivian aims to offer more affordable EVs. Industry experts Mark Feelin and Henry Payne share their candid car reviews on Auto Line After Hours.
- Germany Bleeding ICE Jobs - VW, Renault, Stella Talk About Joining Forces - Autos Pushing Down U.S. Inflation Rate - Ford Slashes Mach-E Prices - EV Battery Prices Dropping Fast - No, Cybertruck Doesn’t Rust - Germany Cuts Truck EV Incentives - J.D. Power Could Sell For $8 Billion - GM Stops Colorado/Canyon Sales Over Software - Rivian Says $48,000 Is Sweet Spot for EVs
"...led the R two that's supposed to compete with the Tesla model Y. They literally drive every new car that comes ..."
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This is Autolne Daily. The show is dedicated to enthusiasts of the global automotive
industry. Germany's auto industry is reeling. At its peak in twenty sixteen,
it built five point seven million vehicles. That fell the four point seven million
in twenty nineteen, and it dropped again last year to only four point one million, and that's having a big impact on jobs, especially at suppliers.
In twenty eighteen and twenty nineteen, German auto suppliers employed three hundred and ten thousand workers, but that's down to only two hundred and seventy thousand, and according to one expert, it will fall to two hundred thousand jobs by twenty thirty, or about a quarter fewer than there are now. He says the
shift to electrification is causing the decline and there won't be enough new jobs created related to evs to offset it. And the decline has already started. German
suppliers Bought, Continental and ZF have announced they are considering getting rid of tens of thousands of jobs. And it's not just European suppliers who are worried.
Volkswagen, Renault and Stillantis are so concerned about competition from Chinese automakers that they're talking about joining forces to make electric vehicles. Bloomberg reports it would kind of
be like airbus, where various European aircraft companies join forces to compete against Boeing.
But they'll need to move fast if this is going to happen. A
BYD Dolphin already costs seven thousand euros less in Germany than a comparably equip Volkswagen ID three. It's unlikely that VW, Renault, and Stilantis would merge or
even form a joint venture, but it's very likely they would collaborate on common platforms and combine their purchasing power to bring down costs significantly. The fact that
these three companies would even talk about this possible visibility shows that the EV transition is rewriting the rules of how this industry operates. When inventory got tight in
the US because of COVID shutdowns in the chip shortage, car prices zoomed upwards.
Most car dealers were charging well above the MSRP or the manufacturers suggested retail price, and that became a major contributor to the spike in inflation we saw from twenty twenty through twenty twenty two. But just as autos helped push inflation
up, now they're helping to bring it down. Kelly Bluebook reports that the
average transaction price was down three and a half percent in January compared to the year before, with the average transaction at forty seven thousan four hundred and one dollars. Big pickups and luxury cars were discounted the most, while mid sized
pickups had the fewest incentives. In fact, Ford is offering incentives on the
f one to fifty Lightning of up to twelve five hundred dollars and we may see even more discounting coming soon. KBB says the sales rate in January actually
slowed down despite the dropping prices and talk about Ford cutting prices. It also
just took an ax to the MSRP of the Mocke. Depending on the model,
prices are coming down by three to eight thousand dollars. There's several reasons
why Ford is doing this. For one thing, sales of the Machee fell
fifty percent in January in the US market. Also, Tesla cut the price
of the model Why by one thousand bucks last week, and the moche no longer qualifies for the full seventy five hundred dollars EV sales credit, it only qualifies for half, so Ford had to respond to these developments. But there's
something else going on here too. As we reported on Monday, the prices
of raw materials needed for batteries are plunging. Bloomberg ne EF reports that lithium
was selling for eighty five dollars per kilogram in twenty twenty two. Now it's
only selling for sixteen dollars and eighty percent drop, and cobalt and nickel are also down by forty percent. Bloomberg says that the average price of a battery
pack is now one hundred and thirty nine dollars per kilowat hour and is down to only one hundred and twenty six dollars in China. So the cost of
making EV batteries is coming down fast and that's allowing automakers to cut the price of their evs. But make no mistake, they're only cutting prices to try
and boost sales. They would much rather use those lower cost to boost profits
instead of needing to sell more evs. No doubt you've seen headlines about the
cyber truck rusting, but there's nothing wrong with the truck. It's related to
an issue that's been around for decades. Fine metal particles that get kicked up
during manufacturing or from train tracks and railcars during shipping, which is often called rail dust or rust. Dust sticks to the body panels and when it gets
wet it rusts. It's prone to happening on white cars, but unfortunately for
both painted and unpainted cars like the cyber truck, it can't just be wiped away. You need some kind of mild abrasive to cut through it, so
it would be similar to waxing an entire car, and it could take a few tries to remove all the dust. Tesla also recommends immediately cleaning things that
could corrode the cyber truck stainless steel body panels, like dead insects and bird poop. Glass cleaner would probably work for that, as well as take care
of those pesky fingers prints. As we said at the top of the show,
the German auto industry is reeling and that may extend a medium in heavy duty vehicles. The country is dropping its subsidy program for buying an electric truck
or bus because it says it needs to consolidate the budget and focus on more essential projects. The program was launched in twenty twenty one and was supposed to
last until twenty twenty five. Germany also cut its EVY incentive program for passenger
cars a year early back in December, after a decline in electric sales.
However, the cut on electric trucks and buses might also be due to high demand. It already started denying applicants for this year. Germany will instead focus
on building a charging infrastructure. JD Power may be up for sale and you
won't believe what it's going for. Power is best known for its annual automotive
reports on quality and is currently owned by the private equity firm Thomas Bravo, which bought it in twenty nineteen. But Bloomberg reports that it could go for
eight billion dollars and a bit of a history lesson here. The late Dave
Power started the company with his wife Julie in nineteen sixty eight, literally working from their kitchen table, and I'm sure he never had any idea it would one day grow to be an eight billion dollar empire. General Motors is still
having serious software issues. It had to stop selling the Blazer EV and now
it slapped a stop sale on the Chevy Colorado and GMC Canyon pickups. GM
didn't reveal what the problem is, but says it's not safety related and it will effect about fifteen thousand trucks. GM says once a software fix is tested
and validated, it will start to ship the pickups to customers, which should happen shortly. To help fix its software issues, GM hired Mike Abbott from
Apple last year and he sense brought in engineers from Apple, Google, and Meta to change the way that GM does its software development, but they still have to fix the old software. Rivian's cheapest model is seventy thousand dollars,
but its CEO says the sweet spot is forty eight grand. R J.
Scringe told Forbes that the average transaction price of any vehicle IC or electric is about forty eight thousand dollars in the US, and that's where Rivian needs to be to create a viable option for IC customers. And as we reported the
other day, the EV startup is coming out with a lower price model called the R two that's supposed to compete with the Tesla model Y. They literally
drive every new car that comes into the US market. I'm talking about Mark
Feelin and Henry Payne. They're the car critics for the Detroit Free Press and
Detroit News, respectively. They've got strong opinions on what's good and what's not
and they have no problem he'd been praise or talking trash. And you can
hear what they've got to say on Auto Line after hours tomorrow, so be sure to join us. Then. That brings us to the end of today's
show. Thanks for tuning in. Auto Line Daily is brought to you by
Bridgestone Solutions for your Journey and by Intrepid Control Systems over the air engineering boost your game. We want to know what drives your testing. OTA Connected Car
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