AD #3764 - Rivian Delays Georgia Plant; Apple Spent $1 Billion A Year on EV; Generative AI to Have Huge Impact on Auto Industry

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

Rivian just bought itself another year's survival. About two weeks ago, we

dug into Rivian's financials to find that it has seven point eight billion dollars in the bank, but that it spent three point seven billion dollars last year, which means it would run out of cash in just over two years at its current rate. However, Rivian announced that it's delaying its all new plant in

Georgia, which is gonna save it two point two five billion dollars. Instead,

it's going to build its new models at its current US plant in Normal, Illinois. The site churns out the R one T and R one S

right now, and the company expects to make about fifty seven thousand examples this year, but it's boosting that capacity to two hundred and fifteen thousand units.

Those new models include the anticipated mid size R two suv, but Rivian also had a bit of a shocker with a slightly smaller R three model. Both

vehicles have the same lighting signature as its current evs, and the R two looks more like a baby version the R one s but the rear end treatment of the R three is completely different, which we think looks more like an old European hatchback like the Volkswagen Golf. Rivian is utilizing a new platform for

these models that takes advantage of an all new forty six to ninety five battery cell that will provide over three hundred miles or four hundred and eighty two kilometers of range. That's for versions with the bigger pack, which will also be

able to do zero to sixty and under three seconds. It's not giving any

estimates for the small battery, but Rivian does say the R two will start at around forty five thousand dollars and that the R three will be priced below that. Other highlights include the next connector installed right into the vehicle, and

Rivian's says they'll have quote dramatically enhanced autonomous capabilities. While the company is taking

one hundred dollars refundable deposits for the R two today, it's not starting production until the first half of twenty twenty six. Well, it looks like they

just can't help themselves. Remember how COVID and the chip shortage led to a

drop in production that led to tight inventory that pushed up prices that led to record profits. And remember how automakers said they would maintain production discipline and never

let inventory levels go back to where they were before. Well, you and

I remember, but apparently the car companies don't. According to Cox Automotive,

there are now two point eight million vehicles sitting on dealer lots or waiting in marshaling yards to get shipped. That's a million more than there were at this

time last year, and it translates to a seventy eight day supply. The

good news is that this means there's plenty of product for car buyers to shop for and that will see more sales incentives to move the metal. The bad

news for automakers is this will hurt their margins. Except for Tesla EV,

startups in the US are all struggling right now, and there's a similar story going on in China. Neo and x Pung are having trouble selling cars and

are losing money. But Huawei, the giant cell phone company that makes cars

under the Atto brand, is rocketing up the sales chart. To give you

an idea of how well it's doing, last month, test the sold not made but sold thirty thousand cars in China, while Wawei sold twenty one thousand, and Huawei is just getting going. But it's kind of hard to figure

out what's really going on in the car market in China right now. Sales

plummeted in February because of the Chinese New Year holidays, but they were also down in January, and we probably won't have a clear idea of how things are going until we can compare the first quarter of this year to the same time period from last year. Tesla owners who filed a class action lawsuit against

the company accusing it of falsely advertising vehicle ranges have to find another avenue to see damages. The California judge that made the ruling said the owners must go

through individual arbitration with the automaker instead of the class action lawsuit because they had agreed to an arbitration process to resolve disputes when they bought their vehicle. The

owners claim that Tesla misled them by overstating how far its vehicles can drive on a single charge, and they say the driving ranges on the vehicle's dashboard were inaccurate. Tesla says the claims don't have any merit, but it's not completely

off the hook. The judge didn't rule on the merit of the claims and

didn't dismiss the lawsuits, and says an injunction can be filed against Tesla if owners win their arbitration cases. Last week, it was revealed that Apple canceled

development of its electric vehicle, and now Bloomberg is reporting some really interesting details about it. The biggest revelation was that Apple had discussions with Mercedes Ford,

BMW, Volkswagen, Tesla, Canoe, Anne McLaren about partnering up, but ultimately it decided to build the EV on its own, called Project Titan.

Apple spent about a billion dollars a year on the program, which was launched in twenty fourteen, but it never got to the point of testing vehicles on public roads. The company had plan to launch the vehicle in twenty twenty,

but by that year it was still at least five years from being production ready, and its price tag was higher than anticipated. Apple originally wanted to sell

the EV for eighty five thousand dollars, but estimates put the cost of production at one hundred and twenty thousand dollars. One other interesting tidbit not related to

the EV project that Bloomberg reported is that then CEO Steve Jobs proposed buying General Motors in two thousand and eight when the company was going through bankruptcy. There's

a lot of talk about Chinese EV's flooding the EU car market, but MG, which is owned by Saic, says it's aiming to take on the small hybrid segment in Europe. MG's head of sales in Europe told Automotive News that

quote, we aim to break the monopoly of hybridization in Europe. By that,

he means MG is going after Toyota and Renault, which control eighty six of the small hybrid segment in the region. MG is launching the MG three

this summer to take on the Toyota Yaris and the Renault Cleo hybrids. The

MG three will start at less than twenty thousand euros, which is around four thousand euros cheaper than the Yaris and Cleo. MG says it expects to sell

more than three hundred thousand vehicles this year in Europe thanks to the MG three.

Last year, it sold just over two hundred and thirty one thousand vehicles, which was double the year before with one of the fastest evs that you can buy. The CEO of Rimak knows a thing or two about electric performance,

and he thinks it's actually possible for the new Tesla Roadster to hit elon musk claim sub one second zero to sixty time, But Mate Rimack says it comes with a lot of downsides as well. His team has done the simulations

and with thrusters it is possible to go from zero to sixty and under a second, but it also requires extra tanks, compressors, valves, nozzles, and the EV needs massive motors, inverters, gearboxes and drive shafts, so you'd be carrying around a lot of extra mass most of the time. It's

going to be interesting to see what Tesla has in store for its end of year reveal, as long as it's not delayed again. Several new evs are

launching. We've reported on all these models in the past, so we're going

to go through them kind of quickly. Volkswagon is kicking off sales of the

new station wagon version of the ID seven in Germany. It will carry a

starting price of a little under fifty five thousand euros. Honda says both the

Prologue and Accurate ZDX will qualify for the full EV tax credit in the US, with delivery starting within the next couple of weeks. Before those incentives,

the prolog starts at forty seven four hundred dollars, while the ZDX starts at sixty four thousand, five hundred dollars. And last, the Knismo version of

the Aria, which has up to three hundred and twenty kilowatts or nearly four hundred and thirty horse power, is now going on sale. Unfortunately, we

only know of it being sold in Japan for now, where it has a starting price of about fifty seven thousand dollars. Affordability of new cars is one

of the biggest issues in the auto industry. Everyone is complaining about how expensive

cars are, so how can automakers find new ways to cut costs? That

was the topic on Auto Line after Hours yesterday, and Chris Thomas, now, a consultant to automakers, pointed out that generative AI is already starting to have a big impact. Generative AI is probably going to make as big a

difference in the auto industry as compute rated design did, going from drafting tables to designing on the Tube and its probably as big as the Internet, as big as those two things combined. Okay, I know supply today who are

who are using Generative AI to do quotes? So it used to be and

OEM puts out a request for quote, and a sales guy will spend three days putting together a quote a mountain of paper. Well, and then and

then he goes to his boss and there's a bunch of stuff wrong, and he goes back and forth, and three weeks later they come up with this quote. Well, now, generative AI, you can point to the last

three hundred quotes you've done that went out the door and say, do a quote for company X at this volume, for this part given given, and it'll be made in this plant, and Generative AI will will take out everything that's in it that's been taken into account in the past and do that that quote and it will be ninety nine percent right in ten seconds. Wow,

right, So so so think about all the the the improvements that they're gonna be made through the supply chain that's just on on quote. I mean,

there's so many places it's going to be used. You can watch that entire

show right now on our website and YouTube channel, and while the conversation goes all over the place, there's some great insight into how the auto industry will work on ways to make cars more affordable. But that's the end of this

show and this week. Thanks for tuning in, and I hope that you

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AD #3764 - Rivian Delays Georgia Plant; Apple Spent $1 Billion A Year on EV; Generative AI to Have Huge Impact on Auto Industry

Volkswagen Golf

Toyota Yaris

Tesla Roadster

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