Trade tensions escalate as President Trump threatens tariffs on all imported vehicles, potentially raising car prices and impacting factory jobs. Volkswagen faces dealer pushback over direct sales of Scout EVs in South Carolina. Toyota teases a new, more efficient and durable fuel cell system set for 2027, while Chevy unveils its electric NASCAR prototype. Tesla experiments with anti-theft measures for charging cables amid rising copper prices. Porsche announces plans to cut 1,900 jobs in Germany due to weak EV demand and sales challenges in China. Industry inventory trends and supplier financials also highlight cautious optimism amid market shifts.
- Trump Threatens Tariffs on All Car Imports… - …But Will Lower Tariffs If Countries Cut Theirs - Scout Loses Direct Sales Battle in South Carolina - U.S. Car Inventory Levels Drop - Toyota Teases New Fuel Cell System - Chevy Reveals NASCAR EV Prototype - Tesla Combats Charging Cable Thieves - State Department Changes Armored EV Language - Magna Boosts Q4 Earnings - Porsche To Cut 1,900 Jobs in Germany
"... top of it. And now it's Chevy's turn, but with a Blazer EV body on top. While we could see a day where all e..."
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Speaker 1: This is out of line Daily the show dedicated to enthusiasts of the global automotive industry. Happy Valentine's Day everyone,
and on this Valentine's Day in twenty twenty five.
Speaker 2: It looks like.
Speaker 1: The tariffs are going to be a story all year long and maybe even for the next four years. Yesterday,
President Trump said that tariffs on all imported vehicles, not just those coming from Canada and Mexico, will be coming very soon.
Speaker 2: The US imports two.
Speaker 1: Hundred and forty billion dollars worth of vehicles every year.
A twenty five percent tariff on them means the CBP, or Customs and Border Protection Agency, would collect sixty billion dollars as goods cross the border and hand that money over to the US Treasury. But it also means that
overall car prices would go up by sixty billion dollars and make no mistake about it, the domestic manufacturers would raise their prices to pretty much match that, and that means that car sale would go down, which would lead to factory layoffs. But Trump may not impose and across
the board twenty five percent tariff. He's talking about reciprocity,
meaning we're gonna do to you what you do to us, and it's hard to argue with that logic. So, for example,
the US imposes a tariff of two and a half percent on cars imported from Europe, while Europe imposes a ten percent tariff on cars imported from the US. In
other words, the European tariff is four times higher. The
US also has a twenty five percent tariff on pickup trucks, but Europe really doesn't make many pickups. However, here's where
things start to get tricky. Europe also imposes a value
added tax or that on all products sold in Europe, but not if those products are exported. It's really a
tax policy designed to boost exports and hurt imports. Japan
and South Korea use a value added tax as well.
President Trump says he's going to include those vats to figure out how high the tariff should be on cars that come from those countries. Germany has a nineteen percent VAT,
in South Korea it's ten percent, and in Japan it's twenty percent. Trump says he'll lower his tariffs if other
countries cut theirs and remove trade barriers. So one thing's
for sure, this story is far from over. Volkswagen. Dealers
across the US don't like the automaker's plan to sell Scout evs directly to consumers. The dealers say it's illegal
for Scout to sell directly because it isn't truly independent from VW, and it looks like dealers have won a battle in South Carolina. South Carolina law currently prohibits direct
sales to customers, but last month lawmakers introduced a bill that would allow car companies that don't have franchise dealers to sell direct But that bill has stalled out in the state's House of Representatives after a committee suspended debate on it. And while the bill has bipartisan support, the
South Carolina Automobile Dealers Association is dead set against it and has lobbied hard to prevent the bill from being enacted.
Scout is building its plant in South Carolina and expects to start production in twenty twenty eight, so depending on how this all goes, it may be illegal for workers at that plant to buy the very vehicles they're making.
In a sign that car companies are showing some discipline, inventory levels in the US fell below three million units in January. Cox Automotive reports that new vehicle inventory was
at two point nine two million units last month, down from three point one one million in December, but because the sales rate slowed, days supplied increased, which is estimated at ninety six days, up from eighty the month before.
By having lower inventory, automakers are able to hold pricing where it's at boost profitability. But the lower inventory levels
also suggests that car makers don't expect sales to go up by that much this year. However, Toyota is one exception.
It told dealers in the US to expect more inventory this year in an effort to boost sales. Last year,
the Toyota brand sold just under two million vehicles in the US, up three percent from a year earlier, and the company believes it can top that this year while maintaining a low day supply of vehicles.
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Speaker 1: And now back to Toyota, who's teasing its new third gen fuel cell system that it will reveal in more detail next Wednesday at the International Hydrogen and Fuel Cell Expo in Japan. It says it was able to improve
fuel efficiency, which will result in about twenty percent more cruising range than before. When applied to a vehicle like
the Marai, it would have about four hundred and eighty miles of range, or about eighty more miles than before.
Toyota also doubled the durability of the system, claiming it's comparable to diesel engines in high power.
Speaker 2: Cost was another focus.
Speaker 1: Without providing any figures, it says it significantly lowered cost through design and manufacturing innovations. Size of the fuel cell
was reduced as well, which will make it fit into a.
Speaker 2: Wide variety of applications.
Speaker 1: Toyota says it plans to introduce the new system in twenty twenty seven at the earliest in markets like Japan, Europe, North America, and China. Chevy officially revealed its version of
NASCAR's all electric prototype. The Racing Series debuted its Eavy
concept last September. Then Ford recently showed off its version,
which is just that NASCAR prototype with a Mustang Mochy body on top of it. And now it's Chevy's turn,
but with a Blazer EV body on top. While we
could see a day where all electric NASCAR races are a thing. We think it's more likely that NASCAR would
turn to crossover slash suv body styles first, since Ford and Chevy no longer offer passenger sedans. Toyota, NASCAR's other
participating automaker, clearly still has dans.
Speaker 2: But when it shows.
Speaker 1: Off its EV prototype for the racing series, which crossover or suv do you think it will use? Scrap Copper
has decent value right now, which makes the thick cables at charging stations a target. So Tesla is trying out
a couple of anti theft solutions. One is like the
exploding die packs used by banks. The outside of the
cable gets covered with a rap that's embedded with a series of hoses that, when cut, shoots out a high pressure die all over the place. The other solution is
to etch quote property of Tesla motors directly into the copper wire, so a recycler would see that and know that it's been stolen. Speaking of Tesla, could we start
to see state officials driving around armored versions of its vehicles.
The US State Department has set aside a budget of four hundred million dollars for quote electric armored vehicles over the next five years. When the budget was first drafted
under the Bided administration in December of last year, it included quote armored Tesla production units as one of its line items. Also included were armored sedan, armored EV not sedan,
and even armored BMWs, but the State Department has now changed all of those to the more generic armored electric vehicles. However,
we're unsure if it also changed how those expenses will be recorded, because the vehicles were strangely listed under categories like miscellaneous food manufacturing. The financial news coming out of
the supplier industry hasn't been good lately, but Magnu's Q four earnings report offered a glimmer of hope. Sales hit
ten point four billion dollars, up two percent, thanks to higher production in the US and China, which offset lower production in Europe. Magnus operating profit was up twenty three
percent to three hundred and eighty one million dollars, but its net profit dropped twenty five percent, coming in at two hundred and three million. Interestingly, one of the reasons
its profit slipped was because of the cost of shutting down production of the Fisker Ocean at its tire plant in Austria. Automakers and suppliers in Europe have slashed thousands
of jobs, especially in Germany, in order to cut costs, and now Porsche is the latest, but it isn't making cuts as deep as the others. The automaker announced it
cutting fifteen percent of its workforce at its main plant in Stuttgart and one of its R and D centers in Germany. That translates to about nineteen hundred jobs. Porsche
plans to reach that goal by twenty twenty nine with early buyouts and severance packages, not through forced layoffs. The
automaker is looking to cut costs because of flumping sales in China and weak EVY demand. But that brings us
to the end of today's show. Thanks for tuning in,
and I hope that you have a great weekend.
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