On the Move, June 17 - 23, 2024

Electric vehicles and the US presidential race

Joe Biden aims for half of all new cars sold in the US to be electric by 2030, as part of his broader climate goals to reduce greenhouse gas emissions by 50% below 2005 levels by the end of the decade. This ambitious target balances addressing climate change with protecting traditional auto industry jobs, a concern for blue-collar workers in swing states like Michigan. To support US supply chains, Biden has imposed tariffs on China, impacting its carmakers and battery manufacturers. The rise of EVs threatens many jobs in the auto industry, which relies heavily on the production of vehicle parts. Biden's campaign underscores his climate and healthcare policies, including capping insulin prices for Medicare recipients.

Fisker files for bankruptcy amid EV sector struggles

US electric vehicle maker Fisker has filed for bankruptcy after failing to secure financing. The company, founded by Henrik Fisker in 2016, cited market and macroeconomic challenges. Fisker produced 10,193 vehicles in 2023 but only delivered 4,929, leading to financial instability. The move follows a series of setbacks, including failed funding efforts, manufacturing pauses, and workforce cuts. This marks Henrik Fisker's second automotive business collapse, following Fisker Automotive's bankruptcy in 2013.

Luxembourg boosts EV aid amid fluctuating market incentives

In 2023, nearly one in four registered cars in Luxembourg was electric, prompting Prime Minister Luc Frieden to announce a new "mobility climate bonus" from October 1. The aid includes a maximum of €6,000 for electric cars consuming up to 16 kWh per 100 km, with reduced bonuses for higher consumption. The ownership period to qualify for subsidies will extend to three years, and a €1,500 bonus will be available for used EVs over three years old. Despite the reduced subsidies, the industry welcomes the government's continued focus on electromobility. The move aims to boost EV adoption despite a challenging market, where the second-hand electric car market is currently non-existent in Luxembourg. The success of this initiative is key for achieving the nation's ambitious 2030 EV goals. Nevertheless, concerns remain about the impact of these changes and upcoming tax reforms on the EV market.

Mitsubishi's UK and Europe leasing arm grows 8% despite market challenges

Mitsubishi HC Capital UK's Novuna Vehicle Solutions and MHC Mobility, its European branch, grew their fleet by 8% to 155,000 vehicles due to new business. CEO Robert Gordon highlighted record new business levels and customer retention amid high interest rates and market instability. Novuna saw a 20.2% rise in new business and a 17.7% revenue increase, growing its fleet to over 109,000 vehicles. MHC Mobility's fleet expanded by 13% across eight European countries. The company posted ￡126 million in pre-tax profits and is investing in decarbonisation and alternative solutions.

European carmakers brace for tariffs, but farmers may face the brunt

With the EU imposing curbs on Chinese EV exports, China may retaliate by increasing tariffs on European cars. However, European automakers like BMW and Volkswagen are well-hedged through local joint ventures. The bigger risk is a potential consumer shift to domestic brands due to nationalist sentiments. Instead of targeting automakers, Beijing has turned its attention to European pork imports, targeting a sector far less protected against trade disruptions. As tensions rise, other European export industries such as pharmaceuticals, aircraft, and cosmetics may face increased risks.

Jeep targets the EV market with an affordable $25,000 Renegade model

Jeep plans to launch an all-electric Renegade SUV priced under $25,000 by 2027, marking a push into the EV market. Announced at Stellantis ’ 2024 Investor Day, this model aims to make EVs more accessible, aligning with CEO Carlos Tavares's vision of a mass-market price point. The Renegade EV will be part of Jeep’s strategy to expand its North American market coverage to 85%. Production will shift to lower-cost regions to meet the price target. This model will join Jeep’s growing electric lineup, which includes the Wagoneer S EV and the rugged Trailhawk Concept EV.