By Nick Carey, European Autos Correspondent
Greetings from London! We’re cruising towards the holidays, but the pace of news has if anything picked up toward the end of the year. And in any normal news week, General Motors’ announcement that it was pulling the plug on its Cruise robotaxi unit after sinking $10 billion into it since 2016 would have stood out. But then, we don’t really do normal news weeks anymore in the car world. Wall Street shrugged at the news and analysts said that while it was a black eye for GM, it was better than continuing to burn such big piles of cash with little to show for it. An October 2023 crash where a Cruise car hit a pedestrian and dragged her 20 feet did not help. GM’s exit comes over two years after crosstown rival Ford got out of the autonomous vehicle business and highlights yet again that mastering the science of truly self-driving cars is vastly more difficult than ever imagined and costs eye-popping sums of money.
Which brings us to today’s Auto File…
* Trump goes after EVs
* Europe’s EV big discounts
* Stellantis ditches Tavares’ legacy
Trump takes aim at Biden’s EV policies
On the campaign trail, U.S. president-elect Donald Trump promised to roll back regulations on fossil-fuel cars and undo what he called Joe Biden’s EV mandate. As my Reuters colleagues Jarrett Renshaw and Chris Kirkham exclusively reported, Trump’s transition team put together a proposal to follow through on that campaign promise. You can read about it here.
Trump’s team recommends sweeping changes to cut off support for EVs and charging stations and to strengthen measures blocking cars, components and battery materials from China.
The transition team also proposes tariffs on all battery materials globally in a bid to boost U.S. production with negotiated exemptions for allies. The transition-team plan would redirect money now earmarked for charging stations and to make EVs affordable into national defense priorities, including securing China-free supplies of batteries and the critical minerals to build them. In a separate exclusive, Reuters reporters Jarrett Renshaw , Rachael Levy and Chris Kirkham reported that Trump’s transition team proposes dropping a car-crash reporting requirement opposed by Elon Musk’s Tesla, which could cripple the U.S. government’s ability to investigate and regulate vehicles with automated-driving systems. You can read about it here. Musk spent over a quarter of a billion dollars to help Trump get elected. So far his return on investment looks quite promising.
Recommended reading:
* Nippon’s U.S. Steel bid review still ongoing
* EU resists pressure on CO2 emission rules
* CATL offers to subsidize suppliers
Europe’s EV discount bonanza Europe’s automakers face tough new CO2 emission targets for 2025 that mean that at least one in five cars they need to sell must be an EV, well above the 13% share for electric cars this year. As my Reuters colleagues Gilles Guillaume and Alessandro Parodi report, they are gearing up for those targets by hiking prices on combustion engine models with big discounts expected for EVs to nudge consumers away from fossil-fuel models. You can read more about it here. While frantically lobbying Brussels to ease up on the rules they claim will cost them 15 billion euros ($15.74 billion) in fines next year, automakers are also taking action, with Volkswagen, Stellantis and Renault raising prices on combustion engine models by several hundred euros in the last two months to make EV prices more appealing. VW, expected to be hit the hardest by the new targets due to its high sales volumes, has already cut the price of its ID3 electric compact car in several markets, with more discounts from others expected soon. Automakers fret that this means lower combustion engine sales and less business for suppliers, while also running the risk that consumers may simply choose to stay on the sidelines rather than buy a higher-priced fossil-fuel model or a discounted EV.
Stellantis: Carlos who?
Stellantis Chairman John Elkann is moving swiftly to dismantle the legacy of former CEO Carlos Tavares and repair relations with dealers, industry partners, governments and workers. While it seeks a new CEO, Stellantis is being run by an interim executive committee led by Elkann. Less than a week after Tavares quit, Stellantis said it would rejoin European auto lobby group ACEA. As my colleagues Giulio Piovaccari and Nora Eckert report, according to a source Stellantis quit ACEA at the beginning of 2023 because Tavares opted for an independent lobbying strategy without first consulting the board. You can read more about it here. Tavares also opposed ACEA calls for the EU to ease up on 2025 CO2 emission targets, a position not backed by Stellantis European dealer associations. But Stellantis moved quickly to soothe tensions in a meeting of Stellantis European retailers in Amsterdam, held just days after Tavares' resignation. This is still a remarkable chain of events. Six months ago, Tavares was seen as an invincible giant in the automotive world. His fall was quick, but the company’s swift moves to undo his policies have so far helped Stellantis shares pare some of their steep losses this year. As for Tavares himself, in his first interview since leaving Stellantis he described his exit over strategic disagreements as “amicable.”
The big Volkswagen write-down Volkswagen top shareholder Porsche SE warned it may write down the value of its stake in Europe's top carmaker by up to 20 billion euros ($21 billion), in a sign of just how much VW's cost crisis has shaken investor faith in the company’s outlook. The German carmaker is battling high costs, fierce competition from surging Chinese rivals and a prolonged, bitter dispute with powerful unions over possible plant closures and wage cuts in Germany. Volkswagen management and union representatives negotiated late into the night on Monday in a last-ditch round of cost-cutting talks before Christmas, with labour officials saying it remained far from clear whether a compromise was possible. Meanwhile, on the other side of the Atlantic, Volkswagen has offered newly unionized workers at its Tennessee assembly plant a 14% wage increase over four years and a profit-sharing option.
Fast Laps
- Tesla shares hit a record high of $415 last week as the EV maker extended a rally in the wake of the U.S. presidential election, while a Delaware judge cleared the way for Tesla to launch appeals to reinstate Elon Musk’s $56 billion pay package. - Nissan will reassign Chief Financial Officer Stephen Ma to lead its China business in January, as part of a high-profile shake-up for the crisis-hit Japanese automaker as it cuts thousands of jobs worldwide. - Hyundai and Chinese partner BAIC will invest $1.1 billion in their joint venture producing and selling Hyundai cars in China. - Chinese EV maker Nio will work to improve efficiency and reduce costs as it tries to spur sales growth that is now two years behind schedule. - Unions at major Japanese auto manufacturers are targeting pay hikes for wage negotiations for the first time in seven years, the Confederation of Japan Automobile Workers' Unions said. Think your friend or colleague should know about us? Forward this newsletter to them. They can also subscribe here.
(Editing by Tomasz Janowski)
((tomasz.janowski@thomsonreuters.com))
Comments