AD #3831 - EU Slaps Up To 38% Tariff on Chinese EVs; Used EV Prices Now Below Used Gas Cars; GM Slashes EV Production Target

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The European Union officially announced new tariffs on imported Chinese made evs. It's imposing

additional individual duties of seventeen point four percent on BYD, twenty percent on JLI, and thirty eight point one percent on SAIC. All other companies that import

evs from China and cooperated in the EU's investigation into unfair subsidies but had not been sampled yet will be hit with an additional twenty one percent tariff, and those that didn't cooperate have been slapped with a thirty eight point one percent tariff.

And this is all on top of the existing ten percent import tariff.

Even Western automakers like BMW and Tesla that import evs into Europe from China are being hit with the additional tariff. They fell under the cooperated but not sampled

yet category, so they'll face the twenty one percent tariff. However, any

company can request a review with the European Commission, which could get their tariffs cut to a lower rate. This all stems from an investigation into Chinese made

EV's launch last year. In the EU that claims they benefit too much from

production, shipping and sales subsidies. In both China and Europe, the new

tariffs kick in on July fourth, but technically the official investigation won't end until November two. If it still comes to the same conclusion that Chinese evs are

benefiting too much from subsidies, then the tariff will lock in and they typically stay in place for a five year period. China called the move protectionist,

but claimed that it will have little impact. However, collectively it will cost

automakers billions of dollars, and China has already threatened new tariffs on certain goods coming from the EU, including cars with two and a half liter engines in bigger As we pointed out before, this will have an outsized impact on German automakers, not only because they export a number of cars to China, but also because a large number of their sales and profits come from the country.

GM is slashing its EV production forecast for this year, and we still don't see how it's going to meet its new target. Previously, GM said it

would build two hundred to three hundred thousand all team based evs in North America.

This year, but now it's cutting that to two hundred to two hundred and fifty thousand because of a slowdown in EV demand. It has models on

sale from Chevrolet, GMC, Cadillac, and Bright Drop, but they only sold just under ninety four hundred examples combined in the first quarter. GM claims

it sold ninety five hundred evs in May alone, and it has more models like the Equinox EV hitting the market, so it will be ramping up production in sales, but right now it's on track to build less than one hundred thousand evs in North America this year, so that ramp up is going to have to be awfully steep for GM to hit its target. The company is

also making a big investment in its autonomous unit Cruise. GM is pouring eight

hundred and fifty million dollars into the av company, which will fund its operations through the rest of the year. Cruz currently operates with manual and supervised testing

in three US states, but it came under heavy criticism after one of its vehicles dragged a pedestrian that had been struck by another vehicle, and a subsequent investigation that found poor leadership at the top of the company, which led to some pretty high profile departures, including the founder. GM says the eight hundred

and fifty million dollars will help crews get some momentum back. Car sales in

China slightly dipped last month. According to the China Passenger Car Association, Automakers

sold one point seven million passenger vehicles in May, which is down about two percent compared to a year ago, but it was actually an increase of eleven percent compared to April, and through the first five months of the year, retail passenger sales totaled more than eight million units, which is a gain of five point seven percent over last year. Not Surprisingly, new energy vehicles,

which includes BEVs and p haves, accounted for most of the growth. Automakers

sold eight hundred and four thousand v's in May, which is a thirty eight percent gain compared to a year ago and a nearly nineteen percent increased month over month. Nevs now account for forty seven percent of the total passenger car market

in China. Used EV prices in the US are crashing, and they've dropped

below used gas car prices for the first time. According to a study from

ic Cars. The averaged used EV was two hundred and sixty five dollars cheaper

than the average used gas car in February, and that gap widened to two thousand, six hundred and fifty seven dollars in May. Last month, the

averaged used EV sold for twenty eight thousand, seven hundred and sixty seven dollars compared to nearly forty one thousand dollars a year ago, which is a drop of thirty percent. Meanwhile, the average used gas car in May cost thirty

one thousand, four hundred and twenty four dollars, which is only six percent below a year ago, and the drop in used EV prices is likely to continue. Ice Car says that prices haven't bottomed out yet and it sees no

indication of value stabilizing. Last year, the National Transportation Safety Board recommended that

all new vehicles in the US be equipped with ISA, or Intelligent Speed Assist technology, which can prevent vehicles from driving over the speed limit. And surprisingly,

a new survey from the Insurance Institute for Highway Safety found that most drivers are on board with requiring it. More than sixty percent of drivers would find

it acceptable if their car provided audio or visual warnings when they exceeded the speed limit, and nearly fifty percent would be okay if the system automatically restricted speeds or made it harder to press the gas pedal, but the survey also found that around half of drivers would disable the feature if they could. The US

Treasury Department announced that American car buyers have claimed more than a billion dollars in EV tax incentives since the beginning of the year. More than one hundred and

fifty thousand total payments have been issued. The subsidies are part of the Biden

Administration's Inflation Reduction Act, which provide up to seventy five hundred dollars for the purchase of a new EV or up to four thousand dollars for a used EVE.

We know there's a bunch of hydrogen and fuel cell skeptics out there, but the technology keeps making progress. Renault's hydrogen joint venture called hi Via,

announced a partnership with Hype, a company that provides zero emission mobility, including hydrogen powered taxis. They're planning to deploy two new refueling stations and a fleet

of fuel cell Master vans in France and then Daimler truck and Kawasaki Heavy Industries signed a deal to jointly develop a supply for liquid hydrogen. While most fuel

cell fill up with hydrogen in its gas form, Diimler is working on liquid hydrogen for long haul applications because it's much more energy dense, so you could get more range from the same sized gas tank. However, liquid hydrogen has

to be stored at cryogenic temperatures, so you have to have a very robust and tightly sealed system, otherwise the hydrogen can start to boil off and escape the tank, which would be like pouring gas and money down the drain.

But this is not the only powertrain tekets developing. Daimler envisions that BEEV trucks

will handle shorter distances. But that's a wrap for today's show. Thanks for

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AD #3831 - EU Slaps Up To 38% Tariff on Chinese EVs; Used EV Prices Now Below Used Gas Cars; GM Slashes EV Production Target

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