AD #3752 - Germany Bleeding ICE Jobs; No, Cybertruck Doesn’t Rust; EV Battery Prices Dropping Fast

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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AD #3752 - Germany Bleeding ICE Jobs; No, Cybertruck Doesn’t Rust; EV Battery Prices Dropping Fast

Volkswagen Id

Chevrolet Blazer EV

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