AD #4024 - China Could Merge State-Owned Automakers; Hydrogen Truck Companies Going Bankrupt; Tesla's Stock Shrugs Off Bad News

Speaker 1: This is Underline Daily, the show dedicated to enthusiasts of the global automotive industry. It may be April Fool's Day,

but what's happening to Tesla in Europe is no joke.

Early reports show that March is shaping up to be another disaster for the company. Sales in France were down

nearly thirty seven percent, sixty five percent in Denmark, almost sixty four percent in Sweden, and they were down sixty one percent in the Netherlands. But not everywhere was terrible.

Sales were only down one percent in Norway and they were actually up two percent in Portugal. Tesla's Q one

numbers are likely gonna look terrible, but we think to really evaluate what's happening at the company, we're gonna have to wait until the end of the second quarter to cancel out the effects of production downtime and the changeover for the new model.

Speaker 2: Why in the meantime, there may be a glimmer of hope for Tesla.

Speaker 1: Its stock price started to nosedive in the middle of December and plummeted fifty four percent before bottoming out in March tenth, but since then it's gained sixteen point six percent despite all the new swirling around Elon Musk and the automakers declining sales.

Speaker 2: That's a lot to shrug.

Speaker 1: Off, but it shows surprising underlying strength for the stock, Or at least it does at this snapshot in time, we could be at the start of the great shakeout in the Chinese auto industry. China has too many car

companies making too many models, and the industry is swimming in over capacity, so the government is going to do something about it. Bloomberg reports that the Chinese government could

restructure all the state owned automakers, which includes Baic, Chang'an, Cherry, Dong Fung, faw gac Jac, and Saic. Those efforts would

involve a lot more integration between the companies, especially around core technologies, which is meant to make them more competitive, but the government also welcomes cooperation with private companies. Analysts

believe this could lead to mergers between the automakers and maybe even clearing out a number of models and brands.

It looks to us like the Chinese government is not waiting for the magic hand of the market to sort this all out. It wants to control the process of

rationalizing the industry but that could turn out to be very difficult. The state owned automakers mainly exist to create jobs,

and any effort to right size the industry could eliminate.

Speaker 2: Tens of thousands of workers.

Speaker 1: So that could pit the national government against the provinces and big cities that own some of those automakers. And

it will be fascinating to see how this gets resolved.

Speaker 3: Performance that shines even in the rain, that's what really matters.

Rich don't pretends to tires, improved grip and wet conditions.

Speaker 1: General Motors is backing out of its EV battery joint venture in Michigan with LG Energy Solution, which it announced it would do several months ago. LG will officially buy

all the assets held by its Michigan EV battery joint venture with General Motors for two billion bucks. And you

may remember that Toyota is riding to the rescue, agreeing to transfer its order for LG's batteries to that Michigan plant, and GM isn't exactly giving up on LG Energy either.

The two of them still operate two other battery plants in Ohio and Tennessee. Stilantis is running into significant production delays.

Speaker 2: In Europe as it switches from EV's to hybrids.

Speaker 1: Right now, it simply can't get hybrid parts fast enough.

Suppliers can't handle the sudden demand for more components, especially for electric dual clutch transmissions and the right kind of tires.

The head of Stalants's European operations said that it built twenty thousand fewer vehicles in March because of the parts shortages, and as we reported yesterday, Toyota is facing a similar issue due to high demand for its hybrids around the world.

Customers are waiting months for their vehicles, in some cases because Toyota can't get the parts to build them. Hyundai

officially revealed that wild video game inspired version of the inster EV called the Insteroid, that it first teased a week ago. The one off concept will make its public

debut at the Sole Mobility Show in South Korea in two days and then tour other major events around the world.

Speaker 2: It's meant to help boost customer interest.

Speaker 1: In the inster which is banning into new markets in Asia, Pacific, the Middle East, and Central and South America. And speaking

of Hyundai, the automaker is testing a new wheelchair accessible van in South Korea over the next five months. Users

can take advantage of the on demand service through an app which sends one of Hundai's new purpose built vans to their location, called.

Speaker 2: The r IE.

Speaker 1: The vans are based on the automaker's electric light commercial vehicle platform that it first showed off about a year ago.

At that time, it revealed the chassis cab version with a cargo box on the back, and since then, Honday has formed a partnership to brand a version of that cargo van as Emovie for Iveco. It's also possible this

is the platform that Hundai and GM will use for their joint commercial van project. Another possibility could be GM's

Bright Drop vans, but it only sold about fifteen hundred units last year and there's reports of models piling up in storage life and that's.

Speaker 2: Even with massive deals.

Speaker 1: GM authority points out that Chevy has been offering a twenty five five hundred dollars cash discount since the beginning of March, which goes until the end of June. Then

throw in the seventy five hundred dollars federal ev discount plus a three thousand dollars incentive for Costco Auto members and it's possible to get over thirty six thousand dollars off a bright Drop van, which would bring the starting price of all versions down to a round forty five thousand bucks. They say that hydrogen fuel cells are the future,

but that future is proving to be increasingly elusive. So far,

virtually all the startups that have tried to create a viable business around hydrogen trucks have gone bankrupt. Bloomberg reports

that in the last six months, Nikola, Heisen Motors, Quantron, and Hivia have all gone under or ceased operations. The

problem they were unable to scale up and cover costs. Nicola,

for example, lost more than nine hundred thousand.

Speaker 2: Dollars per truck sold.

Speaker 1: The lack of a hydrogen infrastructure and the high cost of hydrogen itself are the real problem.

Speaker 2: Even in China, which.

Speaker 1: Has massive subsidies for fuel cell trucks, sales are minimal.

Last year, thirty nine hundred medium and heavy duty hydrogen trucks were sold in China, compared to seventy five thousand battery powered ones. In yesterday's poll, we asked you what

you thought of President Trump's pardon of Trevor Milton, the founder of Nikola, who was convicted of securities in wire fraud and sentenced to four years in prison. Seventy nine

percent of you thought this reflected corruption in the Trump White House, likely since Trevor Milton donated one point eight million dollars to Trump's reelection campaign. Three percent of you

said the pardon was completelyfied, while thirteen percent of you said you didn't care one way or the other. Four

percent of you said none of the above. Over twelve

hundred people voted in the poll, and you had a lot to say. We got some great feedback, including Jay Bradford,

who said, I love your polls, but could I ask a favor When you preview them on Autoline Daily, Please don't show the current results. I think it skews results,

and I like the surprise of finding out the answer after I take the poll, not before.

Speaker 2: Jay. That's just the way that YouTube does polls.

Speaker 1: But what I think we can do for you when we show the poll in Audoline Daily, we won't show the results of people that have already taken it.

Speaker 2: William Pozo didn't like the poll at all.

Speaker 1: Quote your poll is quite clearly politically motivated. You are

also playing nasty politics evidenced with the options themselves. Dan

Harold said your choices are too simplistic, and Mercer Driver said, I'm number three on the Trevor Milton poll. I don't

care and it does not matter what happens to Trevor Milton.

His CEO career is done for as nobody in their right mind would ever hire him. We appreciate all of

your comments, including the critiques, and we'll use that feedback to make improvements, and that brings us to the end of today's report. Thanks for watching Autoline Daily.

Speaker 4: Autoline Daily is brought to you by Bridgestone Solutions for your Journey, Intrepid Control Systems, over the Air Engineering boost your game, and by Tajent Automotive Technologies the formula for better mobility.

Speaker 5: There's nothing wrong with heavy metal, hey light enough, but with world class composit material Taging Automotive Technologies makes vehicles lighter, safer, and more eco friendly.

Speaker 6: Developing today's vehicles issues can happen in an instant. What

good is knowing your problems without the data to solve them.

Meet Wireless Neovi Cloud, your secure off the shelf solution empowering real time collaboration for quick resolution. With wireless neova Cloud,

your team can prevent issues before they can escalate. Driver

communication data and remote diagnostics to analyze and resolve your problems using OTA, allowing your executives to oversight throughout the process.

Wireless neovi Cloud your vehicle update solution in production and on the road in trapid control systems driven by your data.

Zevo Bright Drop

About this episode

Original notes