On the Move, July 1-7, 2024

SK On declares 'emergency' as EV sales falter, seeks parent company rescue

South Korean battery maker SK On , a supplier to Ford and Volkswagen, has declared an "emergency" due to disappointing electric vehicle sales in Europe and the US. The company has faced ten consecutive quarters of losses and a fivefold increase in net debt since its 2021 spin-off. CEO Seok-Hee Lee has announced cost-cutting measures and potential mergers to address the crisis. Despite aggressive investments, SK On's financial woes are exacerbated by unfulfilled sales projections from US automakers. Analysts believe SK On's long-term survival hinges on continued support from its parent conglomerate, SK Group .

European groups urge action against cheap Chinese imports threatening the hydrogen industry

Major European industrial groups are calling for tougher EU subsidy requirements to protect regional hydrogen equipment manufacturers from cheaper Chinese imports. They advocate for "made in Europe" criteria, highlighting that Chinese equipment costs less than half of European products. The move follows the EU’s stricter stance on Chinese trade, with calls to tighten auction criteria to prevent subsidised foreign technologies from competing unfairly. The letter to EU leaders emphasises the need for European manufacturing to maintain industry leadership and reduce dependency on Chinese imports.

Indonesia opens its first battery cell plant, boosting EV ambitions

Hyundai and LG Energy Solution have inaugurated a $1.1bn battery cell plant in Karawang, Indonesia, aiming to enhance the country’s role in the global EV supply chain. The plant, with a production capacity of 10 gigawatt-hours, leverages Indonesia's vast nickel reserves. President Joko Widodo emphasised the shift from exporting raw materials to becoming a key player in EV manufacturing. The project, first announced in 2021, will see further investments, including a $2bn second phase. The plant’s output will primarily support Hyundai and Kia’s EV models, with significant exports to South Korea and India.

Tesla cars approved for purchase by the Chinese government for the first time

Tesla has been added to the eastern province of Jiangsu's approved list for public, party, and government group vehicle procurement, marking the first inclusion of a foreign-owned car manufacturer. This inclusion comes as Tesla faces stiff competition in China, which accounts for 60% of global EV sales. Tesla’s Model Y SUV is now among ten approved brands, including Geely-owned Volvo and state-owned Changan. Despite trade tensions between China and the West, this development highlights the importance of the Chinese market for Tesla, where 20% of its sales volume and 50% of its production occur.

Renault CEO Luca de Meo accelerates new strategic plan beyond "Renaulution"

Renault CEO Luca de Meo has announced that the company is ahead of its 2030 "Renaulution" goals and is already preparing a new strategic plan. Speaking at a Sycomore Asset Management conference, he revealed that Renault's current targets, set for completion by 2030, are likely to be achieved early. The company has surpassed financial goals and operational margins, prompting de Meo to focus on adapting to the evolving automotive landscape. Key future initiatives include accelerating vehicle development and leveraging partnerships with Geely and others. Despite early successes, de Meo emphasises the need to remain agile amidst competition from Tesla and Chinese brands.

Fisker seeks approval to sell Ocean EVs at a massive discount amid bankruptcy

Fisker has requested a bankruptcy judge's approval to sell over 3,000 Ocean electric SUVs for $14,000 each to vehicle-leasing company American Lease. Originally priced up to $70,000, the sale would total $46.25 million. Facing logistics issues and significant cash burn, Fisker shifted to a dealer-partner model earlier this year. American Lease, which caters to New York City rideshare drivers, increased its offer from 2,100 to all 3,321 available SUVs. This move aligns with NYC's mandate for a zero-emission rideshare fleet by 2030.

Electric vehicle market turbulence prompts strategic changes at Volkswagen and BASF

Volkswagen is cutting 1,000 temporary jobs at its Zwickau plant, despite the facility's full shift to electric vehicle production. The factory, employing 9,400 workers, will reduce operations from three to two shifts due to underutilised capacity and declining market demand. This follows the German government's removal of electric vehicle incentives, causing a 16% market drop. Concurrently, BASF has halted two projects to secure battery metals, citing economic reasons. Both companies remain committed to electric mobility, adapting flexibly to current market fluctuations without major job cuts.