Good morning! It’s Thursday, February 29, 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: Biden Weary Of Chinese Cars
U.S. officials are going to investigate the potential data and cybersecurity risks Chinese electric vehicles and other internet-connected cars can pose. The Department of Commerce is looking to act before Chinese manufacturers make any real headway in the American market. From Bloomberg:
The administration is reviewing the risks “before Chinese-manufactured vehicles become widespread in the United States, and potentially threaten our privacy and our national security,” Commerce Secretary Gina Raimondo told reporters.
Chinese auto companies have a very limited presence in the US because of a 27.5% tariff introduced under former President Donald Trump. The Biden administration is considering hiking those duties even higher, but officials are worried that tariffs alone won’t be enough to keep Chinese cars out of the country, Bloomberg has reported, as firms route shipments through third countries and set up shop in places like Mexico.
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The investigation announced Thursday fits into the administration’s broader goal of supporting the US auto industry and watching investment patterns of Chinese firms like BYD Co., the official said — but it’s specifically motivated by national security risks. There wasn’t a particular incident or finding that spurred the investigation, the official said, but rather concerns that arose out of a constant review of threats posed by China, the main US geopolitical rival.
“China is determined to dominate the future of the auto market, including by using unfair practices,” President Joe Biden said in a statement announcing the review. “China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”
To be fair, Beijing has its own restrictions on foreign vehicles operating in the country. That includes a ban on Tesla from certain government and military locations because of national security concerns. Maybe they aren’t so different from us after all.
Listen, I understand national security is a concern, but a lot of this just feels like the U.S. government keeping good cars from our market for the sake of protecting U.S.-based automakers. As one of the few people who have driven a modern Chinese car in the U.S., I’ve gotta say: these things can be really, really good.
2nd Gear: Polestar Has $950 Million To Play With
Less than a month after Volvo diluted its ownership stake in Polestar, the Geely-controlled EV maker raised a whole lot of cash. Polestar said it has secured a $950 million three-year loan from a consortium of a dozen banks.
Polestar says the cash infusion will finance its, admittedly ambitions, product rollout and cover a majority of its financing needs. The nascent automaker is predicting a double-digit gross profit margin by the end of 2024. From Automotive News:
“This marks a new phase in Polestar’s business,” CEO Thomas Ingenlath said in a statement. “The efforts of recent years are paying off: We improved our cost basis, secured financing and are ramping up our product offensive.”
But it’s been rough driving for EV-only brands as the demand for battery-powered vehicles slows. Meanwhile, segment juggernaut Tesla has unleashed a price war to grab market share.
Polestar’s sales have slid for the past three quarters, including a 39 percent decline in Q4.
Industry analyst Karl Brauer said the new investment “is crucial in giving Polestar the runway” it needs.
But long-term financial stability “could prove challenging given the shifting momentum in EV sales and ever-increasing competition in what remains a niche segment in the U.S.,” said Brauer, executive analyst at iSeeCars.com.
Volvo, which owns 48 percent of Polestar, said it would cut its stake to just 18 percent. Geely, which has a controlling stake in both automakers, will continue to back Polestar.
I love the Polestar 2. It may be my favorite normal EV on sale right now, so I do have some faith that its next models, the 3, 4 and 5 will be solid vehicles. Polestar just needs the cash to make them a reality.
3rd Gear: Ford EV Owners Get Free Supercharger Adapter
Ford has opened the registration process for its EV owners to reserve a free Tesla Supercharger plug adapter that’ll allow folks to charge up at the more than 15,000 Tesla Supercharges across the U.S. and Canada. From Automotive News:
Owners of 2021-24 Mustang Mach-E crossovers and F-150 Lightning pickups can complete a short process online to receive one free adapter per vehicle through June 30. New customers who purchase a Ford EV during that window also would have to reserve a free adapter, a spokesperson said.
Once the reservation window closes, or if customers want more than one, the adapters will cost $230 each.
In May of 2023, Ford and Tesla announced their partnership. Literally every other legacy automaker followed suit soon afterward. Now, Ford EV owners will have access to about 126,000 total chargers across the U.S. and Canada. Not too shabby.
The number of Superchargers available to Ford customers has increased by about 3,000 since Ford made that announcement, and the company expects the number to continue to rise. Without Tesla, Ford’s own network has about 111,000 third-party chargers, including about 13,000 fast chargers, [Ken Williams, director of charging and energy services customer experience for Ford’s EV business unit], said.
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Customers can pay to use the Tesla chargers through the FordPass app.
Tesla designed and engineered the adapters. Williams wouldn’t say how many adapters Ford will be able to produce, but the company expects demand to exceed supply initially.
Ford CEO Jim Farley in January announced the adapters would be free as “our way of saying thank you” to customers.
Starting in 2025, Ford will start building its EVs with Tesla’s North American Charging Standard port, which will eliminate the need for an adapter.
4th Gear: BYD Looks To Mexico
Chinese electric vehicle-making giant BYD is searching Mexico for a location to set up a North American factory aimed at boosting the automaker’s share of the local market, according to BYD Americas CEO Stella Li. Eventually, that plant will be able to produce about 150,000 vehicles per year. From Reuters:
BYD outpaced former market leader Tesla in EV sales globally in the fourth quarter of 2023, and auto industry officials say its push into Mexico foreshadows a competitive threat the Shenzhen-based automaker and others from China may pose to companies already operating in the U.S. market.
A U.S. manufacturing advocacy group, the Alliance for American Manufacturing, this month warned low-cost Chinese cars and parts could threaten the viability of auto companies in the U.S. The group called on Washington to block the import of low-cost Chinese autos and parts from Mexico to prevent an “extinction-level event” for the U.S. auto sector.
Li said BYD’s Mexico ambitions are solely geared at local sales, adding the company is scouting for factory sites in central and southern areas rather than northern Mexico near the U.S. border, where she said transportation costs to reach consumers would be expensive.
“Our plan is to build the facility for the Mexican market, not for the export market,” she said.
When asked whether Mexican officials had mentioned U.S. concerns over Chinese automakers, Li said they had been receptive to BYD’s plans.
Earlier this week, BYD announced it would start selling its Dolphin Mini EV in Mexico for 358,800 pesos, which works out to be $20,990. That’s less than half the price of the cheapest Tesla.
Reverse: This Is Bullshit
You’re telling me the movie “Leap Year” didn’t come out on Leap Day? What the fuck are we doing here? I thought I was gonna swoop in here with an interesting little “remember this movie and the Renault 4 that stars in it?” post, but nope. Now, I just have to be mad that a movie that came out 14 years ago didn’t premier on the day I expected. Horseshit, man. Absolute horseshit.
