AD #4092 - OEMs Spend $28 Billion a Year on Warranty; Rivian To Lose Significant Income; Xiaomi Dissed for Using Consumer-Grade Chips

Speaker 1: This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry. You want to hear a crazy number, Well,

here's a crazy number. Last year, all the automakers in

the US, both domestic and import, spent twenty eight billion dollars on warranty claims. That includes thirteen point six billion

for labor and fourteen point seven billion for parts, which is according to the National Auto Dealers Association, who collects all that data from car dealerships, that twenty eight billion dollars was twelve percent higher than the year before, and for car dealers it was a bonanza. Regular maintenance and

repair work that's paid for by customers is declining, so the warranty work that's paid for by the factory is something of a godsend. And as long as we're handing

out crazy numbers, here's another one. Tesla is chopping the

price of the Model Why in Canada, Well, by twenty thousand dollars.

Speaker 2: Here's the backstory on that.

Speaker 1: In response to Trump's tariffs, Canada imposed a twenty five percent tariff on US made vehicles in April. As a result,

Tesla raised the price of the Model y to eighty four thousand dollars Canadian, which is about sixty one five hundred dollars in US dollars. But at that price, orders

dried up, so now Tesla is slashing the price of the long range all wheel drive version of the Y by twenty thousand dollars.

Speaker 2: It starts at sixty five thousand dollars.

Speaker 1: Canadian Electric speculates that Tesla is able to cut the price by that much because it's likely importing those whys from its Berlin plant instead of the US to avoid that big tariff. Have you heard of the term millspec?

It stands for military specification. The military sets extremely rigorous

standards for all the parts and components it buys because.

Speaker 2: They go through such extreme use cases.

Speaker 1: Well, the automotive industry has its own standards called automotive spec because cars also get pretty well beat up. All

the chips, electronics, and connectors in your cars are far tougher than anything used in consumer electronics. And I mention

all that because Shaomi has kicked off a serious debate in China for using consumer grade chips in its sou seven sedan.

Speaker 2: Specifically, it's using.

Speaker 1: Qualcom snap Dragon eight Gen three microchips for controlling its instrumentation and entertainment systems. Tesla also experimented with consumer grade

chips about a decade ago and reportedly had large recalls when the chips failed due to overheating. Other Chinese automakers

are using consumer grade chips too, but like Shaomi, only for entertainment and display controls. A key reason why they're

doing this is because it takes over a year of testing to quality FIA chip for automotive grade, and with China's speed to market mentality, those automakers don't want to wait that long to use the latest chips. While many

automakers and suppliers are still developing hydrogen technologies, most have turned their attention away from passenger vehicles, and it's easy to see why based on the experience of early hydrogen adopters.

A couple of dozen people have filed a lawsuit against Toyota, a hydrogen station operator, a joint venture called the Hydrogen Fuel Cell Partnership, and California Governor Gavin Newsom, alleging that they were misled about the viability of the hydrogen fueling network.

There's about fifty hydrogen stations and all of California right now, and Shell exited the market last year, closing multiple locations.

With that going on, hydrogen prices at the pump have tripled.

Several Toyota Mariah owners say they no longer drive their vehicle, even though they're still making.

Speaker 2: Payment on them.

Speaker 1: Toyota itself made adjustments to the twenty twenty five model year Maria, chopping it down to just one trim line and limiting sales to California, but it's even had to limit where it sells the vehicle in the state due to the shrinking infrastructure.

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Speaker 1: Data looks like the President of France, Emmanuel Macron.

Speaker 2: Is getting a little extra protection.

Speaker 1: While Cadillac is the most common provider of armored vehicles for US presidents, Renaul holds that distinction in France, and it just handed over a new set of wheels to not only serve the president but also foreign heads of state and other dignitaries. Renault took input from chauffeurs, security officers,

and mechanics in the presidential garage to come up with the necessary upgrades. That included extending the wheelbase of the

Rafalle SUV which it's based.

Speaker 2: On, adding armour.

Speaker 1: That also required an upgraded suspension to handle all that extra weight. Then the vehicle was tricked out in exclusive

touches like red, white and blue accents and the grill and stitching a flag holder in the passenger front fender, French Republic badges in Boston to the seats and armrests, and real black and white marble on the steering wheel and center console. Just like Tesla, Rivian is about to

lose a huge source of revenue. Automakers can earn regulatory

credits for selling low emission vehicles, and they could sell those credits to other automakers that miss meeting their emission targets.

Those automakers could pay a fine, but the credits were cheaper. However,

President Trump's new Big, Beautiful Bill eliminates penalties for missing emission targets, which means automakers don't have any incentive to buy those credits anymore. Last year, Rivian generated three hundred

and twenty five million dollars in revenue from selling those credits.

While that includes credits from states and other countries that won't be affected by the new bill, analysts estimate Rivian would have lost out on one hundred and twenty million dollars in credit sales last year without the federal programs.

For comparison, last year, Tesla collected over two point seven billion dollars in regulatory credits, or about ten percent of its total revenue.

Speaker 2: In another sign that the China auto industry is.

Speaker 1: Starting to restructure, Volkswagen and its joint venture partner SEIC will close their plant in the city of Nanjing. Production

has already stopped and the plant will be gradually shuttered in the second half of the year. The plant produced

the Pasat, which will now be produced at a nearby plant in the same province. A Dutch startup called Tyler

has an interesting idea for adding wireless charging to e bikes.

It developed a kickstand that can be attached to about seventy five percent of e bikes currently sold, and it integrates into the existing wire harness or plugs into the external port of the battery pack. So when the kickstand

is down and placed over the included charging mat, which can even be left outside, the battery starts charging without the need to plug it in. Tyler is taking refundable

pre orders right now for twenty nine euros or about thirty four bucks, while the total price of the system is two hundred and fifty euros or roughly three hundred dollars.

Deliveries are mainly aimed at Europe and are said to start in the summer of next year. We've got the

results of our latest poll where we asked our members how they would advise automakers to set the regen braking on their evs and hybrids. Forty eight percent of you

said you love one pedal driving and want it to be the default setting.

Speaker 2: Thirteen percent said do.

Speaker 1: Not make one pedal driving the default Nineteen percent said you'd like to set your favorite Regent setting on the center screen and leave it there, and twenty percent said you like using paddle shifters to change the setting on the fly. We got a number of insightful comments as well.

Kyle Robinson said, one pedal driving is one of my favorite.

Speaker 2: Electric vehicle traits.

Speaker 1: I will probably never have to do another break job, which makes me real happy. Thomas Bowen posted that quote.

I've gotten used to one pedal driving with my Tesla's, but everyone has different preferences. The car should remember their preferences,

give us the choice and make it sticky. Irvin Wright said,

for my money, Tesla has it exactly right, strong regent and hold. It's very rare for me to touch the brake.

Brian Falchuck likes the paddle shifters that GM uses for Regent on demand.

Speaker 2: He says, I find myself.

Speaker 1: Trying to use it in other cars that lack it, which is a sign that it's a useful and expected feature.

It's like looking at the center screen in the early days of backup cameras, when you're in a car without one, you really notice when it's missing, you know. Thanks for

all your comments because This is really good feedback for the automakers to hear. And if you'd like to participate

in all our polls, please consider becoming a Patreon or YouTube member. It only costs a few dollars a month

and it gets you access to a lot more auto line content. And with that we wrap up today's report.

Speaker 2: Thanks for watching.

Speaker 1: Autoline Daily is brought to you by Intrepid Control Systems over the year engineering boost your game, and by

AD #4092 - OEMs Spend $28 Billion a Year on Warranty; Rivian To Lose Significant Income; Xiaomi Dissed for Using Consumer-Grade Chips

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