AD #4080 - Is GM Trying to Torpedo Ford Battery Plant?; U.S. Tariffs Will Raise Car Prices by $1,760; Zoox Starts Building AVs in California
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Speaker 1: This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry. The US and Japan can't seem
to reach a trade deal, and it's all about cars.
According to a Japanese government official, the US's auto trade deficit with Japan is holding up the negotiations. Japan's trade
surplus with the US last year was nearly sixty billion dollars, and eighty two percent of that gap was Japan's surplus of cars and parts. But with Trump's twenty five percent
tariff on imported cars and parts, Japan is worried it could harm its auto industry. Japan's car sector employs five
point six million people and accounts for ten percent of the country's gross domestic product, and without a deal, Japan has concerned the tariffs could send the country into a recession.
Brazil's auto industry is lobbying to speed up tariffs on imported evs to stop the flood of Chinese cars coming into the country. Industry and labor groups say Chinese automakers
are taking advantage of Brazil's lower tariffs, which are currently ten percent. It plans to gradually raise them to thirty
five percent. Next year, but Brazil's auto industry wants the
higher rate to hit this year. Chinese automakers control eighty
percent of Brazil's evy market, and this year imports are expected to increase forty percent to two hundred thousand vehicles.
Even so, Brazil is open to Chinese automakers building vehicles in the country, which several have already pledged to do.
And we've been talking for years about all the manufacturing over capacity in the Chinese auto industry, and now we've got some hard numbers which were reported by the Gascou Automotive Research Institute that's based in Shanghai. Last year, the
Chinese auto industry made a little over thirty one million vehicles, but it has the capacity to make fifty five and a half million. Most auto factories are operating at less
than fifty percent capacity utilization, meaning they're losing money. However,
there are a number of automakers operating well over eighty percent, which is generally the break even point for an assembly plant.
Byd Le Auto, Faw, Hong Chi and Cherry all operate over eighty percent, while Shaumi and Tesla operate at ninety five and ninety six percent. Respectively. That means those plants
should be solidly profitable. But the overall situation is a mess,
and it will be politically difficult to resolve because closing plants will eliminate jobs, and the Chinese government sees the auto industry as a means to create employment. And we've
also got some hard numbers on what the tariffs are going to cost automakers in the US. Alex Partners calculates
the teriffs will add thirty billion dollars a year in cost and that automakers will pass eighty percent of those costs onto consumers. It says that on average, prices of
vehicles will go up by one thousand, seven hundred and sixty dollars, but that's just the average. Cars and trucks
made in the US will go up by five hundred dollars.
If they're imported from Mexico, they'll go up by one thousand, one hundred and twenty bucks. From Canada they'll go up
eight hundred and eighty bucks. But everything else from Japan,
South Korea, Europe and the rest of the world will go up by four thousand, four hundred dollars. And speaking
of alex Partners, we've got Mark Wakefield from Alex coming on Auto Line after hours later today. One of the
key topics we'll get into is the new business operating model that Chinese automakers are using and what automakers in the US, Europe, Japan, and South Korea need to do to compete with them. Interestingly, it's not so much about
using new technology, it's more about their product development process, says for all of you working in the industry, here's a great opportunity to get some competitive intel. So join
John and Gary when the show goes live at three pm Eastern Time today.
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Speaker 1: Four Chairman Bill Ford says the company knows that other automakers are trying to quote submarine its efforts to open a new two and a half billion dollar battery plant in Michigan, and according to a report and Automotive News, GM has spent six times more than any other automaker on lobbying expenditures in the first quarter of the year.
Speaker 2: In fact, the.
Speaker 1: Eight point two million that it has paid out is more than it's ever spent in a single quarter since they started tr tracking these figures in nineteen ninety eight.
The main sticking point for Ford's battery plant seems to be that it's licensing technology from Chinese battery giant COTL, and since CATL isn't directly involved, it was going to allow Ford to receive tax credits for the plant. A
source says GM's support of tighter restrictions on businesses that have ties to China is all about leveling the playing field, and some of its lobbying efforts may have paid off.
The US House proposed a budget bill that would take away those tax credits, which Bill Ford says quote imperils the project from moving forward. And this would be a
highly important battery plant for Ford plans to make LFP or lithium iron phosphate cells, which are cheaper and would allow Ford to lower its EV prices. And you know,
we find it somewhat funny that GM is lobbying for legislation that will make it harder for Ford to use batteries with tech from CTL when Buick's refreshed Electra E five crossover in China is now using battery cells that were co developed with COATL. They say the cells have
lasted up to eight hundred thousand kilometers or nearly five hundred thousand miles in tests, and also helped increase the charging speed in the E five by thirty percent. This
will also be the very first model from seic a GM to get an AI voice assistant, which can provide up to ten responses in a row and will integrate with other AI systems. The new Electra E five is
on sale now with a starting price of just under twenty one thousand dollars. Autonomous startup zeoke says it opened
its very first plant in the US that's dedicated to building robotaxis. The facility is located in the Bay Area
in California, and once it's up to full scale, it will have the capacity to produce ten thousand robotaxis a year. However,
the plant isn't set up for welding, cutting, or painting on site, so instead Zekes is partnered up with suppliers to pre assemble major parts of the vehicle, which it says streamlines the manufacturing process and lowers its energy costs.
Zeukes will launch its robotaxis in Las Vegas first later this year, followed by San Francisco. It also plans to
expand to Austin in Miami within the next few years.
Tesla has been criticized for using a vision or camera based system for its hands free driving tech because it doesn't perform as well in low visibility conditions compared to systems that also use LIDARC, but Tesla's not the only one taking this approach. While AI software company helm Ai
says its system will work with other sensors, its main focus is vision based solutions, and it just introduced helm ai Driver, a real time neural network that only requires input from its surroundview vision perception stack, so no HD MAP, slide art or additional sensors. Says the system can provide
level two to level four autonomous driving on the highway in city streets, and it plans to license the software as well as integrated into production vehicles. Honda is one
of helm AI's investors, and it's expected to use its tech in the Honda Zero series, which is scheduled to start launching next year. Helm Ai says it's also in
talks with many OEMs and will note that VW is one of its other investors, but that brings us to the end of today's show. Thanks for tuning in and
I hope to see you later today.
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