Intel Report | July 22 | The Weekly Automotive & Mobility News That Matters

BY AUTOMOTIVE VENTURES | July 22?2024?| VIEW ONLINE ??

What We're Reading

???? Automotive

Anderson Economic Group, LLC estimated dealerships lost 56,200 new-vehicle sales and more than $1 billion between June 19 and July 15 because of the CDK Global cyberattacks and subsequent software outages.?| Automotive News?($)

Car repossessions rocketed higher in the first half of the year, a sign of rising consumer distress as the U.S. Federal Reserve Board weighs interest rate cuts. So far in 2024, repos are up 23% compared with the same period last year.?| Bloomberg?($) ?

???Electric Vehicles (EVs)

According to a not-yet-released annual report and forecast by 波士顿谘询公司 , the U.S. auto industry should meet the goal of battery-electric vehicles accounting for 50% of new-vehicle sales by 2030 despite the current slowdown in demand. The International Energy Agency (IEA) also forecasts 50% BEV adoption.?| Wards Auto

A shift in consumer sentiment is now forcing many automakers to pull back on aggressive EV investment plans, and pivot, at least partly, back to the internal combustion engine vehicles that still account for most new car sales and a large share of corporate profits. | The New York Times ($)

Former President Donald Trump used his nomination speech to take aim at President Joe Biden’s electric vehicle policies, vowing to action against them on his first day in office. “I will end the electric vehicle mandate on day one,” Trump said in his address at the 2024 Republican National Convention in Milwaukee. The move would result in “saving the US auto industry from complete obliteration, which is happening right now, and saving US customers thousands and thousands of dollars per car,” he said. Trump has repeatedly vowed to repeal what he calls Biden’s “EV mandate,” referring to a new EPA regulation limiting tailpipe pollution that is so strict it would compel automakers to sell far more electric and hybrid models over time. Trump’s remarks on EVs came just moments before he criticized what he said was trillions of dollars of wasteful spending “having to do with the green new scam.” | Bloomberg ($)

通用汽车 CEO Mary Barra walked back expectations for her company’s electric vehicle program, the latest such move by a legacy automaker as momentum slows for plug-in models. Barra said GM won’t have production capacity in place to build one million EVs at the end of next year, which was the previous target. The CEO said customer demand will dictate how fast the company can get to the one million mark for annual sales of EVs, and that currently it’s seeing a slowdown in deliveries of them.?| Bloomberg?($)

Electric vehicles have been financially disastrous for rental companies, especially Hertz , which in January scaled back plans to acquire 100,000 Tesla s after the cars’ resale values plunged much faster than the company had expected. Hertz’s experience had a chilling effect on its industry, and many rental car companies are now trying to sell off electric vehicles at deep discounts. And it may be a while before they start buying again. Last year, more than 4% of the cars sold by manufacturers to rental companies were electric, according to S&P Global Mobility . So far this year, that number is just 1.4%.?| The New York Times?($)

Registrations of Tesla cars in California fell 24% in the April to June period, marking the third consecutive quarter that the company posted a sales drop in its key market, indicating mounting challenges for the EV maker. Potential Tesla customers in the United States have been shying away from buying its electric cars, partly due to CEO Elon Musk's polarizing persona.?| Reuters?($)

Hybrids were supposed to be a way station on the road to electric cars. Honda and Toyota Motor Corporation started pushing them in the late 1990s, using their part electric, part internal combustion powertrains to meet emissions mandates and lower CO2 ratings across their global fleets. They wagered that hybrids were an easier sell to consumers than the full-on electric vehicles a few early adopters and tech geeks were driving. Soon everyone would transition and leave gasoline behind for good, the thinking went. But the leap to a world of all-electric driving hasn’t occurred. Concerns about high sticker prices and limited charging infrastructure have slowed EV sales. These days, the hybrid powertrains that were once considered merely a bridge to an electric-only Nirvana are turning out to have a more lasting appeal than expected, with their triple threat of decreased emissions, increased power and do-gooder image.?| Bloomberg?($)

Many companies are reluctant to invest in critical minerals and energy transition projects due to uncertainty about consumer demand for EVs and government commitment to zero-carbon goals. The long-term picture is intact of a world needing large quantities of materials such as lithium, cobalt and copper to enable the world to give up using fossil fuels. The timing of the next several years, however, is in question, they said at the WORLD MATERIALS FORUM in Paris last week.?| Reuters?($) ?

????? China

Foreign automakers are struggling to compete in China’s rapidly growing EV market, dominated by domestic brands, due to higher production costs and insufficient differentiation of their products. AlixPartners expects Chinese brands to take more than 70% of the car market in China by 2030, and grab one-third of the global auto market — or 9 million cars a year.?| CNBC

As Western companies quake at the latest onslaught of cheap Chinese goods, a similar drama is playing out in China, where manufacturers are struggling as Beijing boosts industrial capacity without stimulating new demand.?Rampant overcapacity combined with weak consumer demand is pushing many Chinese companies to the brink, forcing them to slash prices and crushing profits. | The Wall Street Journal?($)

The U.S. Department of Commerce plans to issue proposed rules on connected vehicles next month and expects to impose limits on some software made in China and other countries deemed adversaries.?The Biden administration could take "extreme action" and ban Chinese-connected vehicles or impose restrictions on them after the Biden administration in February launched a probe into whether Chinese vehicle imports posed national security risks.?| Reuters?($)

The U.S. and Europe would love to cut their dependence on China for rare earths. Standing in the way of that ambition are low prices and Beijing’s willingness to throw its weight around to keep the market down. Rare-earth prices have plummeted this year and are now hovering at roughly three-year lows.?| The Wall Street Journal?($)

?????Car of the Week

We have a new "Car of the Week": a 1987 Lamborghini Countach 5000 QV. | Sotheby's Motorsport

Have a great week,

Steve Greenfield