Honda Takes Another Crack at US EV Market With Help from GM

HONDA TAKES ANOTHER CRACK AT US EV MARKET WITH HELP FROM GM

Honda Motor Co. is trying to crack into the US market for electric vehicles with a new model and an old strategy: If you can’t beat ’em, join ’em. The Japanese carmaker unveiled the brand’s first electric SUV on Thursday, marking a renewed push into fully electric vehicles to complement its hot-selling gas-electric hybrids. But the 2024 Prologue is only a half-step in Honda’s broader EV efforts. Co-developed with General Motors Co., it’s being built in a GM plant and shares key parts with GM models, including its Ultium batteries.

Source: Bloomberg

EVS ARE COMING, BUT AFFORDABILITY AND CHARGERS LAG BEHIND

Almost every new nameplate coming to market in the U.S. by 2028 will be electric, but the industry needs affordable electric vehicles and widespread, reliable public chargers for mainstream consumers to buy in. More than 80 percent of all new models arriving within the next five years — excluding redesigns and minor updates to current offerings — will be battery-electric, according to the Automotive News Future Product Pipeline series, which forecasts product plans for more than three dozen automotive brands from late this year through 2028. Just over 10 percent will be hybrid and about 7 percent will be powered by gasoline.

Source: Automotive News

US EXPANDS, UPGRADES FORD ENGINE FAILURE PROBE

The National Highway Traffic Safety Administration (NHTSA) said on Monday it was upgrading and expanding its investigation into 708,000 Ford Motor (F.N) sport utility vehicles and trucks over catastrophic engine failures tied to a faulty valve. The agency says under normal driving conditions vehicles without warning may experience a loss of power due to catastrophic engine failure related to a potentially faulty valve in 2.7 L and 3.0 L EcoBoost engines.

Source: Reuters

BIDEN POLICY LED NORTHVOLT TO CANADA FOR $5.2B EV BATTERY PLANT

Swedish battery firm Northvolt on Thursday said it would build a $5.2 billion (USD) EV battery factory in Canada's Quebec province—its first outside of Europe. Known as Northvolt Six, the factory will be located just outside Montreal, according to a company press release. The first phase of construction is scheduled to start this year, with the goal of getting the factory operational by 2026. The factory will initially have 30 gigawatt-hours of annual battery production capacity, later expanding to 60 gigawatt-hours. The 170-hectare site will host cathode and cell manufacturing, as well as battery recycling, according to Northvolt.

The Inflation Reduction Act (IRA) passed last year was one of the factors in the company's choice of Canada for the new factory. The location checks one of the boxes for qualification for the revamped federal EV tax credit which, under the IRA, stipulates North American production for EV batteries. "IRA took the industry by surprise," Northvolt co-founder Paulo Cerruti, a former Tesla executive when that company was setting up its Nevada Gigafactory, said in an interview with Reuters. He said Northvolt assembled a site selection team around a year ago, accelerating the process in early 2023. Some sites in the U.S. were also considered, Cerruti told Reuters. The Canadian site was ultimately chosen in part because of access to raw materials and renewable energy. Cerruti also told Reuters that Northvolt had secured an "anchor customer" for the Canadian factory, but declined to name it. The company has already named two major automakers as customers for its European battery plants.

Northvolt plans a mammoth battery plant in Sweden with Volvo capable of supplying 500,000 EVs annually. It appears an electric XC60 SUV might be one of the first Volvo products to get Northvolt cells—around 2026. Northvolt is also planning to make $2.3 billion of batteries for BMW, starting in 2024. Northvolt started in 2017 with multiple former Tesla executives, and declarations that if nobody rises in Europe to scale up with EV batteries, Europe would be dependent on Asia for its battery supply. In 2021, it showed a cell made with 100% recycled nickel, manganese, and cobalt (NMC).

Source: Green Car Reports

INCENTIVE SPENDING CUTS LIKELY FOR DETROIT 3 AMID STRIKE

The UAW strike will prompt the Detroit 3 to pare back the incentive deals they offer car shoppers, analysts from J.D. Power and Edmunds said. September incentive promotions will be allowed to run their course with cuts appearing in October, Jessica Caldwell, Edmunds' head of insights, told Automotive News on Friday, the day the UAW had announced plans to expand its strike to new Ford and GM plants.

Source: Automotive News

DRIVERS BUY NEW CARS REPLACING OLDER MODELS, DESPITE SURGING PRICES

US car buyers are headed to showrooms out of sheer necessity, defying high interest rates and fat sticker prices to replace cars that on average have been on the road for more than 12 years. High monthly payments and the early effects of a widespread strike at US carmakers didn’t stop vehicle sales from rising in the third quarter. Dealers have larger inventories than they’ve had for several years, which could attract more buyers for the rest of the year as pent-up demand fuels sales.

Source: Bloomberg

STRICTER FUEL ECONOMY WILL COST BILLIONS, CARMAKER LOBBY SAYS

The Biden administration’s proposal to order automakers to increase the average fuel economy of their vehicles in order to limit pollution will cost manufacturers $14 billion dollars in fines, according to the biggest auto industry trade group in the US. Mike Hartrick, senior director of environment and energy for the Washington-based Alliance for Automotive Innovation, said the US National Highway Traffic Safety Administration’s proposal for automobiles to reach an average of about 58 miles (93.3 kilometers) per gallon by 2032 “exceeds maximum feasibility,” even with expected increases in electric vehicles sales in the coming years.

Source: Bloomberg

STRIKE UPDATES

UAW, Automakers Signal Progress After Days of Stalemate, Sources Say

Negotiators for the United Auto Workers and Ford Motor have narrowed their differences on pay increases after a new offer from the automaker amid "really active" talks, people familiar with the bargaining among the Detroit Three automakers and the union said on Wednesday. UAW President Shawn Fain plans to update the union's 150,000 members at Ford, General Motors and Chrysler parent Stellantis on Friday, a person briefed on the union's plans said. It is not clear whether Fain will order a fresh round of walkouts, or declare sufficient progress has been made to delay strikes at additional plants.

Source: Reuters

Ford Sweetens Wage Offer in Proposal to Striking UAW Workers

Ford Motor Co. said it has boosted its wage increase in a new contract proposal to the United Auto Workers union aimed at ending a 19-day strike. Ford said its seventh offer to the union includes a wage increase of more than 20%, which the automaker said would put its 57,000 UAW-represented workers in the top quarter of all US jobs, hourly and salaried. Ford previously proposed a 20% raise.

Source: Bloomberg

GM, Ford Furlough Another 500 Workers Due to UAW Strike

General Motors and Ford Motor on Monday said they are laying off another 500 workers at four Midwestern plants because of the impact on some of the facilities of the United Auto Workers strike in its 18th day. Separately, the UAW confirmed it presented a new contract offer to GM on Monday. GM said it received the counterproposal "but significant gaps remain." The UAW also held a new round of bargaining with Chrysler-parent Stellantis.

Source: Reuters

AMERICA’S HIGH EV COSTS ARE DRIVING BUYERS TO HYBRIDS

US sales of hybrids have more than doubled since 2020 and are heading toward a 35% increase this year, according to researcher GlobalData. “The auto industry doesn’t function in a mode where you just flip a switch and everything’s different,” says Jeff Schuster, GlobalData’s executive vice president for automotive. Hybrids are “a way for the mass market to start edging into electric vehicles.”

Source: Bloomberg

GM SETS UP $6B LINE OF CREDIT

General Motors Co. is setting up a $6 billion line of credit to shore up liquidity, a move indicating the carmaker is preparing for a strike at US plants that may drag on with costs already reaching $200 million. The Detroit-based company’s move to bolster its financial position was announced in a securities filing early Wednesday. GM wants the 364-day revolving credit line, which will mature on Oct. 1 next year, to maintain operational flexibility, a company spokesperson said.

Source: Bloomberg