Big Three Automakers Aren’t So Sure About Biden’s EV Plans

Good morning! It’s Thursday, February 15, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

1st Gear: Big Three Worried About Profits In Biden EV Transition

Right now, the Biden administration and automakers are in the final stages of negotiations over new rules to accelerate the electric-vehicle transition. There’s just one problem: many automakers, including the Big Three, worry it’ll cost them billions.

The proposed Environmental Protection Agency regulations could be enacted as soon as March, and it aims to boost the U.S. EV market share to 67 percent by 2032. As it stands right now, that number is around eight percent. From Reuters:

General Motors, Ford and Stellantis — the European parent of U.S.-based Ram and Jeep – have warned they cannot profitably transition their truck-heavy U.S. fleets that quickly, according to a Reuters analysis of automakers’ sales data and a review of comments to regulators.

The United Auto Workers, which represents about 146,000 workers at the Detroit Three, has endorsed Biden for re-election. But the union has told the administration its drive for EVs puts jobs at risk.

Automakers endorsed an earlier administration target to boost EVs to 50% of new vehicle sales by 2030. Groups representing auto dealers have joined in criticism of more ambitious targets, citing the slowdown in EV sales growth.

The Alliance for Automotive Innovation, which represents the Detroit Three and other established automakers, said the proposals could expose U.S. automakers to $14 billion in fines for failing to hit the CO2 targets.

Meanwhile, and unsurprisingly, Tesla CEO Elon Musk has said that the Biden administration’s proposals should be even tougher. Tesla has apparently advocated for rules that would push EVs to 69 percent (goddamnit) market share by 2032, and 100 percent by 2035. Shocking.

Ford, GM and Stellantis, in written comments to the agency, have urged the administration to reduce potentially costly conflicts among overlapping regulations administered by the Transportation Department, Energy Department and the state of California. Those conflicts could result in “added costs for OEMs that will impact jobs, capital investments, and ultimately the success of the transition” to EVs, GM wrote.

GM indicated in public comments that new emissions rules should allow for a slower ramp up of EV sales toward the 2032 goal. But GM also said Energy Department proposals to reduce emissions credits generated by EV sales “will result in disproportionately higher compliance costs for GM and the Detroit 3.”

Stellantis criticized the EPA in its written comments for “completely ignoring the market benefit of plug-in hybrid electric vehicle” technology. The automaker plans a plug-in hybrid Ram pickup and currently sells Jeep and Chrysler plug-in hybrid models.

“In a consumer environment that strongly favors light trucks, Stellantis introduced plug-in hybrid technology – a decision that is resonating in the U.S.,” the company said in a statement Wednesday.

The EV price war launched by Tesla last year amplified Detroit’s concerns.

“You will have a bloodbath” as legacy automakers struggle to absorb high EV investment and production costs, Stellantis CEO Carlos Tavares told reporters in February.

There are also plenty of political ramifications to these plans. Former President Donald Trump has rallied hard against a transition to EVs, calling them a job-killing “hoax.” I really just need this election to be over.

2nd Gear: Super Cruise Adds Rural, Smaller Highways

General Motors’ Super Cruise hands-free driving technology is expanding to be used on nearly 750,000 miles of roads in the U.S. and Canada. I for one welcome our new Super Cruise overlords (It’s the only hand-free driving tech that reliably works). From Automotive News:

The automaker said the addition of minor highways will broaden Super Cruise coverage beyond interstates and other major routes into smaller towns and more rural areas. In August 2022, GM said Super Cruise had expanded to about 400,000 miles of roads.

“GM is all-in on safely deploying Super Cruise as we make the technology available on more vehicles, more roads and for more people to enjoy,” Anantha Kancherla, the company’s vice president of advanced driver assistance systems, said in a statement. “A key part of that is expanding the road network — in this case, nearly doubling it again — with lidar mapped highways. High-precision lidar mapping gives us an operating domain where we are confident in Super Cruise’s abilities.”

Since launching Super Cruise in 2017, GM has updated the technology with automatic lane changing, improved navigation and hands-free trailering support.

The new routes will be added over the air for no extra cost through 2025, GM said. The Cadillac CT6 full-size sedan and XT6 large crossover and the electric Chevrolet Bolt EUV will not be able to receive the updates because they use an older software platform, GM said.

Super Cruise is not yet available on city streets. Last year, GM said it would debut a hands-free, city driving-capable system, Ultra Cruise, in 2024 on the Cadillac Celestiq ultraluxury electric sedan. A spokesperson told Automotive News that GM is not scaling back its advanced driver assistance programs, but is now calling the system on the Celestiq and other vehicles Super Cruise.

I am usually very weary of hands-free tech in cars, mostly because it pretty much never works. However, Super Cruise is a delight to use, and I’ve regularly traveled hundreds of miles without touching the steering wheel while it was engaged. Impressive stuff.

3rd Gear: Stellantis Hit Hard By UAW Strike

Stellantis is warning of a “turbulent” 2024 as operating profits in the second half of 2023 fell 10 percent. That drastic drop can be chalked up to the United Auto Workers union’s strike against the Big Three automakers that ended with salary increases for workers at Stellantis, Ford and GM. From Automotive News:

The strikes added to a complicated outlook for automakers, with still timid global demand for electric vehicles, increasing Chinese competition, sustained costs and fallouts from geopolitical tensions.

Stellantis’ adjusted operating profit (EBIT) fell to €10.2 billion ($10.96 billion) in the July-December period. Adjusted operating income margin dropped to 11.2 percent, a decline from 12.3 percent the year before.

Annual profit-sharing payouts to about 38,000 UAW employees in North America will be $13,860, Stellantis said, down 6.1 percent from $14,760 last year.

“This profit sharing payment recognizes the efforts of our UAW-represented workforce who helped deliver the strong financial results Stellantis released today,” Stellantis North America COO Carlos Zarlenga said in a statement. “As one of the highest payments in the company’s history, it clearly demonstrates that we value our employees’ contributions and are committed to rewarding them when their performance supports the company’s success.”

Stellantis said it would propose a €1.55 ($1.66) per share dividend, up about 16 percent from a year earlier, and that in 2024 it would run a share buyback program worth €3 billion ($3.2 billion).

Stellantis is also preparing for a rough year in 2024 as higher global vehicle output weighs on prices with “an unpredictable broader backdrop.” Man, I love corporate speak.

4th Gear: Mercedes Drops Stake In Russian Truckmaker

Mercedes-Benz has sold its stake in Kamaz, Russia’s largest truckmaker. The move makes it the latest Western company to completely withdraw from Russia following the country’s invasion of Ukraine in 2022.

The automaker didn’t disclose the transaction price or the buyer, but it said the deal was completed this month after securing all necessary regulatory approvals. From Reuters:

Mercedes-Benz AG, which at the time was Daimler AG, took over a 15% stake in Kamaz from Daimler Truck in September 2021 with a view to returning it to Daimler Truck after the truckmaker was spun off from the carmaker in December 2021.

After the spin-off, Daimler AG was renamed Mercedes-Benz AG.

The Kamaz stake ended up being split between Mercedes and Daimler Truck after the spin-off, with Mercedes holding the stake, but Daimler Truck having to write off the asset, which it estimated at roughly 200 million euros ($215 million) in a May 2022 filing.

The sale marks Mercedes-Benz’s conclusive exit from the Russian market. The company announced its withdrawal in late 2022, selling shares in its industrial and financial services subsidiaries to a local investor.

Kamaz CEO Sergei Kogogin said Daimler Truck’s 15% stake had been sold, in an interview with the Vedomosti daily, published on Thursday.

Kamaz is apparently under both U.S. and EU sanctions right now. That’s not exactly a surprising development, is it?

Daimler Truck froze its business dealings in Russia, including cooperation with Kamaz, in late February 2022. following Russia’s invasion of Ukraine.

Dozens of other Western countries have left the Russian market after the country’s actions against Ukraine. Reuters says many automakers sold their factories in the country for a “nominal fee.”

Reverse: Raise Hell, Praise Dale

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Chronicles Live is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – chronicleslive.com. The content will be deleted within 24 hours.

Leave a Comment