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Auto Dossier: Is China’s Electric Vehicle Market Slowing?

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Nov. 16 – Joe White Global Automotive Reporter

Greetings from Motor City! Do you think Detroit is one of the top 50 places to visit in North America? no kidding. D is number 10 on the list compiled by Travellemming.com. Should I tell them it’s snow on the ground and the sky is gray this morning? Shhhh!!! Obviously, anything is possible these days. With that in mind, we’ll read the latest signs of the slowing electric car boom in China, look at how the wave of new electric cars is cementing a neglected corner of the American industrial economy, and yes, check out the rock and roll party is Elon Musk’s Twitter.

China’s electric vehicle market engine is fading

Shares of Mercedes-Benz fell nearly 7% on Wednesday after the luxury automaker said it was cutting prices in China by up to 9% for its newly launched EQE and EQS electric vehicles. The move follows Tesla’s decision to cut prices by a similar percentage in China for its Model 3 and Model Y EVs. Other data indicates that China’s march towards a market dominated by electric vehicles is slowing.

Tesla has reduced wait times to one week for Model 3 and Y vehicles in China. (Wait times to get a new Tesla in the U.S. are dropping, too, and Tesla’s website lists a number of “demo” and “connection experience” models for sale with low miles.)

Goldman Sachs has rattled global lithium markets with a report predicting that prices for the battery metal will drop as Chinese demand for electric vehicles begins to decline next year. Chinese government subsidies have fueled demand for electric vehicles this year. Next year comes the payoff, in Goldman’s view. At the same time, more metal and cell production capacity for electric vehicle batteries is being brought online. “With overcapacity and slowing electric vehicle sales likely to become increasingly evident over the next year, we expect downward pressure on the lithium price to build on signs of overflow especially from H2-23 and beyond,” the Goldman analysts wrote. China’s CN Media reported that lithium producers were cutting futures prices. The slowdown in demand for Chinese electric vehicles could affect a wide range of companies, including international automakers such as Tesla, Mercedes, Volkswagen and General Motors, Chinese electric vehicle manufacturers such as BYD, Xpeng, Nio and Geely, major mining companies and battery makers who are pouring in billions. . in new production processes. Warning: The electric vehicle materials market is volatile and complex.

Fitch Solutions warns that graphite — another important battery material — may be in short supply over the next four years,

Battery makers are trying to circumvent China’s lithium fortress

Here’s another potential source of disruption for the global battery industrial complex: It could replace the lithium, nickel and cobalt chemicals that currently dominate electric vehicle battery production. The companies are pressing R&D for batteries that don’t rely on the lithium-nickel-cobalt chemistry now dominated by Chinese manufacturers. Salt – sodium chloride – a substance that is trained in laboratories. Sulfur is another. Spoiler alert: Sodium and sulfur chemicals aren’t ready for mass production.

Asian battery manufacturers – and lithium – will dominate the market in the meantime.

US inventories hit a 17-month high

Cox Automotive reported Wednesday that the US automaker is sitting on its largest inventory of unsold cars since May 2021. Cox believes there is a 49-day supply of unsold cars in the US market — still well below pre-pandemic and semiconductor crisis levels. .

Can the grid handle electric trucks?

A truck station of the future built to recharge electric trucks could draw as much power from the electric grid as a small town, according to a report from National Grid, a utility operator. The study projected freight and network infrastructure needs on a route from eastern Massachusetts to western New York.

Auto braking cuts the rear ends in half

Automatic emergency braking systems have halved front-to-rear collisions, according to a new study from a group formed by the US Department of Transportation and automakers. The study found that lane departure warning systems reduced single-vehicle collisions by 8%. The full study is here.

NHTSA defaults on safety rules

US auto safety regulators are under fire from a range of lawmakers for failing to introduce new safety standards for collision avoidance technologies and other new technologies. NHTSA has missed congressional deadlines for writing new rules, again without an official.

Electrical semiconductor maker Wolfspeed raised $1.3 billion

Wolfspeed, a maker of silicon carbine semiconductors for electric vehicles, is raising $1.3 billion, including $500 million from inverter maker Borg Warner.

It’s tool time! North American companies that make the special tools needed to produce a car are getting a boost from an increase in new electric vehicle programs and concern about China. Money spent with North American manufacturing tool companies will rise an average of 13.4% year-over-year through 2025, bringing total spending in 2025 to $8.3 billion, according to new projections from Harbor Results, a consulting firm. That would be a 45% increase from 2022, according to projections. North American production tool makers benefit from reconsidering the wisdom of purchasing equipment from Chinese producers, said Laurie Harbor, CEO of Harbor Results. At the same time, Harbor said, “every OEM rips Tesla cars apart” to study how the electric car company scraps hundreds of individual parts using “huge castings.” Large, long-run castings may mean fewer individual dies and dies. And according to the Harbor Results study, on average 30% less money is spent on production electric vehicle kits than on combustion vehicles. Between now and 2025, Harbor said, the main driver of revenue for North American production toolmakers will be new pickup trucks — both combustion and electric — coming from the Detroit automakers.

Hardcore Twitter mania!

Breakingviews believes Elon Musk has a deep financial hole in Twitter. This is the #1 thing to remember while scanning What’s Below.

Musk asked the rest of Twitter’s employees to engage in “scandalous” action or leave.

Tesla investors worry Musk is being consumed by the Twitter quagmire. One indicator: Tesla topics have made up just 3% of Musk’s tweets since November 1, down from an average of 16% over the previous eight months.

Musk is set to testify today in a Delaware court in a suit challenging his $56 billion Tesla wage deal, in part because he’s a part-time CEO at the EV company.

GM’s drive for EV profits

GM’s North American battery supply chain has built about 20 different deals and investments that will be central to the company’s efforts to turn a profit on electric vehicles by the middle of the decade.

Substantial federal subsidies under the Inflation Reduction Act are tied to domestic battery production. Add that to the support for new EV manufacturing in the US, and the red ink from expensive batteries is close to black. GM CEO Mary Barra and other senior executives are expected to get more specific near-term profit targets for electric vehicles during tomorrow’s Investor Day. The event will be broadcast here.

To save jobs, Ford is going back to its past

Electric vehicles require 40 percent less labor, which is why Ford plans to build more parts for electric vehicles in-house, CEO Jim Farley told an audience in Detroit. Farley said Ford is “going back…to our Model A”. The reference is to the vertically integrated system built by Henry Ford at the sprawling Rouge production complex in Dearborn, Michigan, to take iron ore at one end and get cars out the other. Why not just cut Ford’s manufacturing workforce by 40%? Trade union opposition and political reaction are two reasons. Farley cited a third opinion: Getting more of the value of building an electric car through outsourcing could help Ford control technology, optimize costs and turn a profit. This is how Tesla does it.

sexy Prius?

Toyota just revealed the new look of its hybrid Prius, and Marian the Librarian of fuel-efficient cars seems to be trying to spice things up. The new Prius marks Toyota’s latest effort to convince consumers (and regulators) that gas-electric hybrid cars are a better way to cut carbon dioxide in the global mass market than selling expensive battery electric cars to a wealthy few. Kelley Blue Book reports that hybrid cars are more popular with car shoppers in the United States than pure electric cars.

Jaguar Land Rover chief is stepping down

Thierry Bollor has resigned as CEO of Jaguar Land Rover.

Jay Leno suffers burns while working in his garage

Jay Leno said he suffered “severe burns” to his face after a car he was working on caught fire. “I just need a week or two to get back on my feet,” Leno said in a statement. The former “Tonight Show” designer hosts the CNBC series “Jay Leno’s Garage,” which centers around his extensive collection of classic cars.

basic reading

What does it look like behind the wheel of a self-driving Tesla?

What’s hot at the Los Angeles Auto Show? – Car news

Are you ready for a 600-horsepower Porsche electric SUV? Autofile is posted on Mondays, Wednesdays and Fridays. Do you think your friend or colleague should know about us? Send this newsletter to them. They can also sign up here.


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