Stellantis CEO Says EV Cost Burden is 'Beyond the Limits' For Automakers
Stellantis Chief Executive Carlos Tavares said external pressure on automakers to accelerate the shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle to manage the higher costs of building EVs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50 percent additional costs against a conventional vehicle," he said. "There is no way we can transfer 50 percent of additional costs to the final consumer because most parts of the middle class will not be able to pay." Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. For more on their plans, click here.
Democrats' Subsidy for Union-Made Electric Vehicles Faces a Bumpy Road in the Senate
A battle is brewing in the Senate over another key climate provision in Democrats' roughly $2 trillion social spending bill: a tax credit for union-made electric vehicles. The Washington Post reports that Senate Majority Leader Charles E. Schumer (D-N.Y.) wants to bring the bill to the floor as soon as the week of Dec. 13. But the legislation will likely undergo changes in the Senate, where Sen. Joe Manchin III (D-W.Va.) has expressed opposition to the bonus EV credit, saying it would discriminate against automakers whose employees are not unionized. “The product should speak for itself. We shouldn’t use everyone’s tax dollars to pick winners and losers,” Manchin said. Twelve foreign automakers with non-unionized U.S. workforces — including Toyota, Volkswagen Group of America and BMW of North America — also sent a letter to congressional leadership this week opposing the bonus EV tax credit. For more, click here.
Dealers and their employees should contact their Members of Congress and urge them to oppose this proposal that will divide American workers and play politics with car sales. Click here to learn more about the issue and to contact your legislators.
Toyota, Honda, Hyundai, Kia Sales Fall 4th Straight Month
Supply-chain disruptions, driven by the ongoing shortage of microchips that has dented new-vehicle stockpiles, undercut U.S. sales at Toyota. American Honda, Hyundai and Kia for the fourth straight month in November. Deliveries at Subaru skidded for the sixth consecutive month, down 35 percent in November. According to Automotive News, volume dropped 25 percent at Toyota Motor, 17 percent at American Honda, 20 percent at Hyundai -- its biggest decline of the current slump -- and 5.4 percent at Kia last month. Click here for a sales chart. Despite a strong start to the bottom line of most dealerships in 2021, this year has been progressively challenging for the automotive industry. U.S. light-vehicle sales are expected to fall 11 to 12 percent last month vs. Nov. 2020, analysts say -- dashing hopes for a more substantial finish to 2021 fueled by traditional year-end holiday discounts -- after volume dropped 14 percent in 2020 at the onset of the pandemic. For a detailed sales breakdown, and how sales may be impacted by a new COVID variant, click here.
As Cars Go Electric, Hyundai Still Has High Hopes for Hydrogen
Hyundai Motor Group Chairman Euisun Chung has made a number of bold moves since he took the company’s reins late last year. He’s put more money into electric vehicles and orchestrated a deeper shift into the world of robotics. But, according to Bloomberg, another important part of his effort to transform the company from conventional carmaker to mobility giant involves embracing hydrogen-based technology. And on that front, the jury’s still out. South Korea’s biggest automaker is the only global car company besides Japan’s Toyota Motor Corp. to make such a big bet on hydrogen, pledging to have all of its new commercial vehicles, including buses and heavy-duty trucks, run on either batteries or hydrogen fuel cells by 2028. Its goal is to introduce a “wide range of hydrogen-based mobility solutions by 2040,” Chung said in September, from passenger cars and trains to ships and even things that fly. For the full story, click here.
Adaptation Key to Waking Up from Supply Chain Nightmare
The pandemic has caused massive disruption of global supply chains, affecting everything from toilet paper to cars – leaving many wondering when the crisis will end. Marc Barnhill, chief trading officer of Smith and Associates, an independent global distributor of semiconductors and electronic components, writes in Wards that the impact on the automotive industry likely will extend into late 2022 primarily due to the ongoing semiconductor shortage. As cars become more and more reliant on semiconductor components, OEMs must move away from being reactive to supply chain disruptions and start being proactive. One way the automotive industry can do this is by shifting its mindset away from the Just-in-Time approach when procuring the parts needed to keep production moving. Procurement teams who are responsible for securing chips must make crucial considerations when sourcing components to ensure quality parts make it into the vehicles their company manufactures. For more on how they can do that, click here.
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