AD #3898 - Automakers Axe 3M EVs From Future Plans; The Hague Bans ICE Advertising; Mercedes Raises L3 To 60MPH
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Speaker 1: This is out Aligned Daily, the show dedicated to enthusiasts of the global automotive industry. The US government is taking
no chances that Chinese connected or autonomous cars get sold in the American market. Its proposing rules that would prohibit
the import of hardware or software for connectivity or autonomy from China and even Russia. That includes any components that
are sold separately or are integrated into vehicles, even if those vehicles are made in the US. The action is
being taken by the US Department of Commerces Bureau of Industry and Security. It says that quote malicious access to
these systems could allow adversaries to access and collect our most sensitive data and remotely manipulate cars on American roads.
The software rule would go into effect in twenty twenty seven, while the hardware would be banned by twenty thirty to give automakers time to find other suppliers. These rules would
apply to any vehicle used on public roads, but would exclude farming or mining vehicles. And here's our autoline insight.
The Biden administration is initiating these rules to prevent Chinese automakers from selling cars in the US market under any circumstances.
Despite adding one hundred percent tariffs on imported Chinese evs, Many worried that China could use Mexico as an assembly point and ship cars north without any tariffs under the USMCA trade agreement. So by banning Chinese hardware and software
related to connected or autonomous cars, the administration is effectively closing the doors on all Chinese automakers. And it's all
being done under the banner of national security. The White
House National Security Advisor Jake Sullivan says, the US has plenty of evidence of China prepositioning malware and critical American infrastructure, and that's why it's taking action on Chinese connected an autonomous car. And there's no question that Chinese suppliers are
making significant investments in Mexico. We talked with nick Iicavella,
the senior vice president of Public Affairs and Communications from a group called Coalition for a Prosperous America, and here's what they found.
Speaker 2: Since June twenty twenty two, we've seen nearly thirty Chinese autopart manufacturers and car makers actually move in to Mexico with over seven billion dollars of investment into added capacity.
Speaker 1: If this is a topic that interests you, you can check out that entire interview. We'll post a link for
our website or our YouTube channel. The price war in
China isn't just hurting automaker's bottom lines. It's also having
a big impact on car dealers. According to the China
Automobile Dealers Association, dealers have lost nearly twenty billion dollars in the first eight months of the year. While sales
of new energy vehicles are going strong, the overall passenger car market is only expected to grow about four percent this year, and with that slower rate of growth, inventory levels are increasing, forcing dealers to sell vehicles at a discount, and coupled with the price war, that's what's driving dealer losses.
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Speaker 1: Legacy automakers want to be seen as tech companies and generate billions of dollars of revenue from their software, but they're still playing catchup. According to the Gartner Digital Automaker Index,
which looks at twenty two global automakers evaluating things like talent, electrical SLASH, electronic architecture and autonomy, Tesla, Chinese automakers, and Evy startups are at the top of those categories. Specifically,
it's Tesla at number one, then Neo, Rivian and Lucid, GMVW and Toyota saw notable drops from last year's index, and Toyota was third from the bottom overall. But it
wasn't all bad news for legacy auto makers. Hondai, Kiya, Honda,
and Stilantis were able to make significant gains. However, I
think this helped show why some legacy auto makers have struggled with software and technology, why they're investing so much money in it, and why they're partnering up with Chinese automakers and evy startups to get it because they need to catch up. Remember when all the advertising for cigarettes
was banned. It started out slow at first, then got
banned all over the world. Well, advertising for cars with
internal combustion engines could be next. Starting next year, the
city of the Haguen the Netherlands, is banning advertisements for fossil fuel power vehicles in public spaces like bus stops, billboards and transport hubs. The ban also includes air and
cruise travel ads, but natural gas products are exempt. Amsterdam
and Edinburgh, Scotland, also have similar measures, but they aren't as strict as the Hague, and two years ago France passed a law requiring ads for vehicles that emit higher amounts of CO two must promote greener transport alternatives, and all vehicle ads have to include their environmental impact. The
goal of the bands is to help improve air quality.
So what do you think will ice advertising go the way of cigarette ads. Volkswagen might pull out of a
planet owns with SEIC in China, but this has nothing to do with declining sales and profits. It's in regards
to allegations of forced labor and other violations by a local minority group called the Wigers. At first, VW hired
an audit firm that said it found no violations, but soon after six execs from the firm quit saying they had nothing to do with the audit. But now another
vw hired auditor is saying the plant doesn't comply with international standards for human rights, and also added initial interviews that should have been confidential were live streamed and only managers, not shot floor workers were asked questions about working conditions.
This has led to fifty lawmakers to sign a letter calling for Volkswagen to completely withdraw from the plant. Over
the last several months, most major automakers have scaled back their EV sales goals due to the slowdown in demand, and altogether there'll be significantly fewer evs than they were planning for. According to a study from Bloomberg NEF, which
looked at fourteen automakers that set twenty thirty EV sales goals, they'll now produce twenty three point seven million evs in twenty thirty, down from the twenty seven million they planned, or more than three million fewer than before. Even though
EV sales have cooled, the researchers say, cutting these targets carries a risk of falling further behind automakers like Tesla and BYD. Mercedes is increasing the speed at which its
Level three hands free driving system will work. Up to
it was sixty five kilometers an hour or forty miles an hour, but now it's going to ninety five kilometers an hour or nearly sixty miles an hour. The increase
is first approved for Germany and should be ready by the start of next year. Current customers will get it
via an Ota update or through a trip to the dealer, and we suspect the same increase will be made in the US as well, But remember the Level three system is only approved for California and Arizona right now. In
Germany the system costs just under six thousand euros, but in the US it's a twenty five hundred dollars yearly subscription.
We had Bob Lottz on Autulne after Hour last week, and even at ninety two years of age, I was amazed at how polarizing of a figure he still is.
But Lutt still seems up to speed with what's happening in the auto industry right now. He talked about the
need for better leadership at the car companies, as well as the problems with bureaucretit management and boards of directors who really don't know much about the auto industry. Here's
one quick bit of advice he shared.
Speaker 4: If I were running one of the major automobile companies today, the first thing I'd do is do the eighty twenty rule.
Find out who are the twenty percent of the people that are doing all the work, and then focus a lot on my energy on getting rid of the other eighty percent. And I will bet you money that almost
any company. I mean, Chrysler was the perfect example. We
did our best work when we had almost no people.
Speaker 1: If you work in the auto industry, and especially if you're in management, this show is full of advice and that brings us to the end of today's show. Thanks
for making Autoline part of your day.
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