March 18 - By Nick Carey, European Autos Correspondent
Greetings from London!
Now that it has begun, companies and experts are beginning to count up the possible cost of U.S. President Donald Trump’s trade war.
The Organisation for Economic Cooperation and Development (OECD) estimated this week that Trump's tariff hikes will drag down growth in Canada, Mexico and the United States while driving up inflation.
U.S. economic growth should slow this year to 2.2% and 1.6% in 2026, the OECD said, down from its previous forecasts of 2.4% and 2.1%.
The OECD’s report came out as Trump said he would press ahead with a new wave of levies in early April and would grant no exemptions for 25% steel and aluminum tariffs that went into effect last week.
Meanwhile, BMW said it expected a 1 billion euro hit to 2025 earnings from U.S. tariffs and EU duties on its Chinese-made electric vehicles.
Expect more such warnings if tariffs persist.
Which brings us to today’s Auto File…
Could BYD make cars in Germany?
Tesla’s chair, somehow getting by
Mary Barra goes to Washington
Deutsche BYD?
BYD is weighing up a possible third European plant in Germany of all places, a source familiar with the No. 1 Chinese automaker’s thinking told my colleague Giulio Piovaccari. You can read about it here.
The source says Germany is BYD's top choice, but the matter is still subject to internal debate because of Germany’s high labour and energy costs, low productivity and low flexibility.
BYD is considering Western Europe for a third plant because it wants to build brand recognition and acceptance among European customers as a local manufacturer.
Germany, however, would be a somewhat unexpected choice after Hungary and Turkey, where lower wage costs aid BYD’s strategy of coming to market.
But there is another factor at play here.
BYD also has to follow a directive from Beijing that it not invest in countries that supported EU tariffs on Chinese-made EVs. That rules out countries like Italy and France but leaves Germany in with a chance.
Recommended reading:
Foreign CEOs flock to see Xi
Intel’s underdog CEO
Trump takes aim at EV rules
Tesla’s chair is living the dream
Tesla shares have taken a pounding in recent weeks as many investors, who have fretted over CEO Elon Musk’s near-constant presence in the Trump administration, have raised questions over whether he really wants to run the EV maker anymore.
Some have also been spooked by reports of falling sales and vandalism at Tesla dealerships, like this one by my Reuters colleagues Christine Chen and Alasdair Pal, amid anger over Musk’s embrace of far-right politics.
But as my colleagues Rachael Levy and Byron Kaye, report here, Tesla’s chair Robyn Denholm is doing just fine.
Hand-picked by Musk to run Tesla’s board, Denholm is the best-paid chair at any public company in the U.S., with total compensation of about $682 million since 2014.
She has cashed in about $532 million worth of Tesla shares with sales as recently as early March, before Tesla’s stock decline accelerated last week.
Her vast compensation package has been criticized by some shareholders, who argue it compromises her oversight of Tesla and the billionaire who enriched her.
But Denholm, who has described her Tesla pay as "life changing" – a remarkable understatement – said through a spokesperson Tesla’s compensation program for directors is "100% aligned with shareholder interests."
Barra and Trump talk shop
Mary Barra made history when she took over at the helm of General Motors in 2014 to become the first female CEO of one of Detroit’s automakers.
That she has survived for over a decade in the top job at GM – not the easiest company in America to run – is even more remarkable. Incidentally, Barra is the second-longest serving CEO since Alfred P. Sloan ran the shop for over 20 years ending in 1946.
One of the things that Barra brings to GM is that she is familiar with Donald Trump, having been through the rollercoaster ride of his first term as U.S. president that included the renegotiation of NAFTA.
So it was little surprise that she met with Trump last week to talk up GM’s investment plans in the midst of the president’s confusing trade war.
GM declined to provide details, but Trump talked up Barra's visit the following day.
"They want to invest $60 billion," he said.
Deft handling of Trump means Mary Barra looks set to keep her job for a while longer.
Thailand okays $1 billion battery plant
Thailand has approved a $1 billion investment by China's Sunwoda Electronic EV battery plant, the latest in a series of EV-related projects in the regional automaking hub.
Shenzhen-based Sunwoda will create 1,000 jobs in Thailand making lithium-ion battery cells for EV manufacturers at a plant that would include manufacturing, research and product development.
Thailand is Southeast Asia's largest auto production and export centre, home to major carmakers like Toyota and Honda.
But more recently, Chinese EV makers like BYD and Great Wall Motor and others have poured more than 102.7 billion baht ($3 billion) into the country, according to the EV industry association.
Fast Laps
Tesla will make a lower-cost version of its best-selling Model Y in Shanghai as it seeks to regain ground lost during a price war in China, sources told Reuters.
Volkswagen and FAW Group’s joint venture will launch 11 new Volkswagen and Jetta branded models aimed at the Chinese market starting in 2026.
Chinese tech company Xiaomi's new electric crossover SUV, the YU7, will have a driving range of up to 770 kilometres (478 miles).
BYD has unveiled a new EV platform that it said will charge electric cars as quickly as it takes to fill up a fossil-fuel car and announced it will build a charging network across China.
Volkswagen is in talks with digital cockpit system developer Ecarx to put the Chinese company's technologies in cars it sells in developed markets including Europe, Ecarx's CEO said.
Mercedes-Benz will develop smart driving cars for global markets equipped with Hesai's lidar sensors, a source told Reuters.
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(Editing by Bernadette Baum)
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