AD #4100 - Tesla's Big Drop in Regulatory Credits; Trump Admin Out to Kill Stop-Start; Honda Dead Last in Europe

Speaker 1: This is out of Lying Daily, the show dedicated to enthusiasts of the global automotive industream. Tesla reported its second

quarter earnings, and the news is both good and bad.

Speaker 2: Let's start with the basics.

Speaker 1: It delivered just over three hundred and eighty four thousand cars, trucks and SUVs to customers. That was down thirteen percent

from last year. Total revenue came to twenty two point

four billion dollars, which was down twelve percent. Its operating

profit plummeted forty two percent to nine hundred and twenty three million, and its net profit of one point one billion was down sixteen percent. Okay, I'm sure you're all thinking, wow,

that's a lot of bad news.

Speaker 2: Where's the good news, Sean.

Speaker 1: While all the numbers I just gave you compared the second quarter of this year to the same quarter last year, but if you compare this year's Q two to this year's Q one.

Speaker 2: Tesla showed some big improvements.

Speaker 1: Sales were up fourteen percent, revenue was up sixteen percent, operating profit was up one hundred and thirty one percent, and net profit was up one hundred and eighty six percent.

While the Shanghai and Berlin factories were closed for several weeks in the first quarter to retool for the refresh model Y, which hurt the Q one numbers.

Speaker 2: The real backlash against Elon Musk.

Speaker 1: Really didn't ramp up until the second quarter, so that's why we were surprised to see Tesla show a big improvement, and.

Speaker 2: Yet investors didn't like what they saw.

Speaker 1: Yesterday, we pointed out that Tesla stock had a nice run up for the week, but after the company posted its numbers, the market gave up all those gains. Shares

dropped more than six percent on the news. Maybe one

thing that investors didn't like seeing is the big drop in regulatory credits. Tesla collected four hundred and thirty five

million dollars in credits in Q two, a fifty percent dropped from a year ago and a twenty six percent drop from Q one. The Trump administration wants to get

rid of those credits all together, which would wipe out a significant amount of income for Tesla.

Speaker 2: Without it, its.

Speaker 1: Q two profit would have been down sixty three percent, not sixteen percent.

Speaker 2: Tesla won't lose all that money.

Speaker 1: It can still sell regulatory credits in Europe, but the writing is on the wall. We're going to see a

significant hit to profits in the quarters to come. Speaking

of Europe, the new car market is weak and getting weaker.

Automakers sold one point two million vehicles in June, down five percent. BMW and Mini showed a nice sales gain,

Honda was up a bit, and Mercedes posted a small gain, but every single other car company saw its sales drop Stillants fell more than sixteen percent because of big drops at Satrone and Fiat.

Speaker 2: Even Toyota and the Hyundai.

Speaker 1: Group, who've been successful riding the hybrid wave, had double digit.

Speaker 2: Drops in sales.

Speaker 1: Tesla saw the biggest fall of all, down almost forty percent.

Based on sales in the first half. The entire European

market is on track to sell thirteen point six million vehicles this year, and that's not enough to have a healthy auto industry. And now let's go back to those

Honda numbers for a moment. It only sold about thirty

seven hundred cars in Europe last month, placing it dead last amongst all manufacturers. Our European viewers are well aware

of this, but I'm sure our viewers in the Americas in Asia will be quite surprised. To learn that Honda

is little more than a niche player in the European market.

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Speaker 1: While Tesla's FSD is not approved for use in China right now, it's standard aid ASS system or what it calls autopilot in the US outperform the aid ASS system of every other automaker in China, and some of those systems also have lidar. A Chinese media publication put thirty

six cars through fifteen hazardous driving situations, including six on the highway and nine in urban settings, and the Tesla Model three and X had the top scores of any vehicle tested in the high speed scenarios. The Model X

was also the only one to avoid the simulation of a wild pig running out into the road, and it took the top score in the urban driving as well. However,

no vehicle was perfect, and through the fifteen hazardous situations, the publication recorded two hundred and sixteen crashes. That's also

reflected in Tesla safety report that it just released for autopilot in the second quarter, which shows a regression. The

report includes data for miles driven for Tesla vehicles with autopilot turned on, miles driven with autopilot turned off, and the US average for miles between and In the second quarter, miles driven between crashes with autopilot on decline nearly three percent from a year ago, and it was also down two and a half percent in the first quarter. The

US and Japan reached a trade deal yesterday that lowered tariffs on Japanese imports from twenty seven point five percent to fifteen percent, but Toyota says it wants to see it even lower. While the automaker says it appreciates the deal,

it wants to see improved ties between the two countries as well as quote further reductions in tariffs. Previously, Toyota

said it expected the twenty seven point five percent tariff freight to cost it one point two billion dollars, and the US tariffs are also putting a big dent in Hyundai's profits. The automaker released its second quarter earnings and

said tariffs cost it more than six hundred million dollars and that it expects an even bigger impact next quarter.

Hyundai's chief financial officer says it expects tariffs to quote go down a little from the current twenty seven point five percent on imports from South Korea, but that it's hard to predict how much it will drop. Good news

for anyone that hates stop start technology, it could become less common, at least in the US. As you may remember,

back in May, the head of the EPA, Lee Zelden, posted on social media that quote unquote everyone hates stop start and that the agency is going to quote unquote fix it. And now President Trump's new big tax bill,

which eliminates penalties for missing CO two targets, also gets rid of credits for automakers that equip a mission reducing technologies like stop Start. Nearly two thirds of twenty twenty

three model year vehicles in the US are equipped with Stop Start, and one expert estimates that the credit is worth thirty dollars per vehicle. But now that there's no

fines for missing CO two targets and no credit for installing stop Start, there really isn't any incentive for automakers to keep equipping it.

Speaker 2: And according to a poll.

Speaker 1: That we asked about stop Start back in May, most of you won't mind seeing it go away. Half of

respondents said you don't want it, while forty percent said you don't mind it at all. Uber is still going

robotaxi crazy. It's teaming up with Chinese avy company we

Ride to launch the very first robotaxi service in Saudi Arabia.

We Ride will provide several dozen robotaxi vans for an initial test near an airport and busy downtown area, but they planned to transition to a paid service on Uber's platform before the end of the year. The partnership between

Uber and we Ride was actually first formed in September of last year, with an announcement to launch robotaxi services in Abu Dhabi in Dubai on top of that, Uber has a Robotaxi partnership with Chinese robotaxi operator I do for international markets and in the US it's working with Waimo, Volkswagen and Lucid. Honda is going to auction off the

last V ten engine it made for Iyrton Senna for the nineteen ninety Formula One season. The engine has been

completely disassembled by mechanics from Honda Racing and laid out in a large glass display case. That entire setup will

be auctioned off during the Monterey Car Week in the middle of August. And I think this is about one

of the coolest things that any race fan could put on display. And while that brings us to the end

of this show, don't forget to tune into Autoline after Hours at three pm Eastern Time today when we'll be talking about what vehicles have the best interiors.

Speaker 2: I hope to see you for that.

Speaker 1: Autoline Daily is brought to you by Intrepid Control Systems over the year engineering Boost your Game and by

AD #4100 - Tesla's Big Drop in Regulatory Credits; Trump Admin Out to Kill Stop-Start; Honda Dead Last in Europe

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