Amid a slowdown in global EV demand, automakers are shifting focus back to HEVs and ICE vehicles. In 2024, the automotive industry has been witness to an ongoing downturn in the battery electric vehicle (BEV) markets, leaving companies grappling with reduced demand for the product essential to achieving global and industry net zero goals. In response to market demand, companies such as Ford, Renault, Kia, Hyundai, Porsche and Stellantis have been diverting focus from pure EVs in favour of developing their hybrid powertrains as a transition technology. A spokesperson at Porsche tells Just Auto: “The change to electric cars is taking longer than we assumed five years ago. During the transformation phase, it is very important to have a flexible range of drivetrains, because the framework conditions change and the different regions of the world develop at different speeds.” This reflects general market sentiment, as there has been a recent spate of announcements about scaling back BEV production.
Right leaning EU
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The future of the EU automotive industry best exemplifies the shift in energy priorities resulting from a right-leaning government. The 2024 European Parliament elections resulted in a new right-leaning government, one that is likely to slow green initiatives and instead emphasise economic prosperity and security ahead of environmental concerns. The transition away from climate-driven energy policies had already begun under the previous government. Influenced by recent geopolitical and economic challenges that left the continent questioning its approach to energy, the EU began to put its climate ambitions aside to make way for other agendas. Now, with the decline in representation from environmentalist parties, having been replaced by the far right, the EU’s power sector can expect energy policies to officially turn their focus to reducing reliance on imports and increasing the bloc’s competitiveness – and not to meeting climate-driven goals. The forecasts for the EU’s automotive industry may best exemplify the implications of the recent political shift on the power sector.
Thai struggles
Thailand’s auto industry is having to adjust to tougher competition from Chinese OEMs. Faced with sluggish demand in their home market and increasing trade frictions in Europe and North America, Chinese automakers have stepped up their expansion into southeast Asia and other regional markets this year. In southeast Asia, where governments are competing fiercely to attract inward investment as they look to establish international production hubs for next-generation technologies, Chinese automakers have ramped up their investments and are beginning to shake-up an industry that has for many decades been dominated by the Japanese. Thailand has been especially keen to attract new automotive sector investment, as it looks to consolidate its position as the region’s largest vehicle producer by leading its transition to zero-emission vehicles. It looks to be pulling ahead of Indonesia in its efforts to attract electric vehicle (EV) sector investments, with three new Chinese EV assembly facilities having come on stream since the beginning of the year. But this has come at a price, with established vehicle producers and their supply chains struggling with sharply lower business volumes.
Broken lithium promises
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By GlobalDataThe demand for lithium should have brought wealth to the indigenous communities of South America. For indigenous communities in the Lithium Triangle, the rush for the metal should have brought untold wealth. Instead, it has left many navigating the “tragic” fallout of promises that have been “absolutely broken”. The Lithium Triangle – comprising Argentina, Bolivia and Chile – is home to vast salt flats in which the world’s richest reserves of lithium (sometimes termed “white gold” due to its white-silver colour) are concentrated. Around 89 million tonnes of the metal are estimated to lie beneath the Earth’s surface, touted as the ‘white-golden ticket’ for the energy transition. The metal is widely used for batteries (and therefore for energy storage) used in mobile devices and electric vehicles, among other things, and it is taking centre stage as the world looks to electrify. As a result, the demand for lithium has skyrocketed and the salt flats of South America have found themselves in high demand. An increase in lithium mining brought promises of wealth and prosperity for indigenous communities living near deposits, but most are yet to reap any rewards.
Goodwood batteries
Goodwood Hillclimb record holder McMurtry has formed a new partnership to further develop and advance its record winning battery technology. During the 2022 Goodwood Festival of Speed, history was made as British electric car manufacturer, McMurtry Automotive, set a new Hillclimb record. Former F1 driver Max Chilton completed the 1.16-mile track in a record-breaking 39.08 seconds in the McMurtry Spéirling. Since then, the company has been working on further developing the Spéirling to improve performance, as well as working on other upcoming vehicles. To assist them on this journey McMurtry has partnered with battery innovation company, About:Energy, enabling McMurtry engineers to integrate data into designs and utilise simulations of battery packs to maximise efficient fast-charging and increase cycle-life performance. We spoke with Kevin Ukoko-Rongione, chief engineer, McMurtry, and Kieran O’Regan, COO and co-founder, About:Energy, to learn more about the simulations taking place, and to discuss upcoming goals of the partnership.
Tesla again
A Tesla Model S car was in Full Self-Driving mode (FSD) when it was involved in a fatal crash in Seattle, Washington in April this year, Washington State Police have confirmed. The driver, who was arrested on suspicion of vehicular homicide, admitted he was looking at his mobile phone while using the driver assistant feature. Tesla says its “Full Self-Driving (Supervised)” software requires “active driver supervision” and does not make vehicles autonomous, Reuters reported. Currently vehicles with self-driving capabilities are not allowed in Washington, a Washington State Patrol spokesman told USA Today.
VW’s off Q2
VW Group earnings declined in the second quarter as the company’s bottom line came under pressure from one-off restructuring charges and lower returns on China deliveries. Q2 2024 earnings before interest and taxes (EBIT) came in at €5.46 billion, 2.4% down on last year’s level. In particular, its Porsche brand struggled with supply chain issues in H1 and low sales in China.
Japan trio
Confirming earlier media reports, Nissan Motor, Honda Motor and Mitsubishi Motors announced they had signed a memorandum of understanding to jointly discuss a framework for further intelligence and electrification of automobiles based on the agreement signed by Nissan and Honda on 15 March. Nissan and Honda were working to further accelerate initiatives aimed at achieving carbon neutrality and a zero-traffic-accident society. In anticipation of collaboration in areas such as environmental technologies, electrification technologies, and software development, discussions were being conducted on a broad scope. To accelerate this process, it was essential to create new value by integrating the technologies and knowledge cultivated by each company, and to improve business efficiencies. The participation of Mitsubishi Motors in the areas of potential collaboration considered and discussed by Nissan and Honda would add new knowledge and strengths but also provide further synergies that can only be generated by the three companies, as well as new business opportunities.
Tough BMW Q2
BMW’s Q2 2024 financial results saw lower than expected profit margin in its core automotive segment. Earnings before interest and tax (EBIT) in its car segment fell to 8.4% from 9.2% in the same period last year. The German automaker said: “In China, in particular, revenues were impacted by heightened competition and weaker consumer sentiment.” China’s car market has been impacted over the past year by weak demand and an intensified price war. The Chinese economy has also been negatively impacted by problems in the property sector which have dented confidence more generally.
BYD appeases Thais
BYD Auto’s Thai distributor, Rever Automotive, this week offered one year of free charging to existing electric vehicle (EV) customers to make up for the company’s recent heavy discounting. The company was understood to have sold an estimated 50,000 Chinese made EVs in Thailand before it began slashing prices, leaving existing customers feeling that they have vastly overpaid for the vehicles. Angry BYD owners have complained to the company and to consumer protection agencies about this pricing strategy which has also significantly affected the residual values of their vehicles. Rever Automotive, in which BYD acquired a 20% stake last month, said customers who bought BYD vehicles before 1 July would be given immediate free access to the company’s 2,000 charging stations nationwide.
Group 1 & Inchcape
Group 1 Automotive has closed on the acquisition of Inchcape Retail automotive operations with 54 dealerships across the UK. These are expected to generate US$2.7bn in annual revenues bringing 2024 year to date total acquired revenues for Group 1 to $3.8bn.
Maserati safe
Stellantis has no intention of selling its luxury vehicle business Maserati or aggregating the unit with other Italian luxury groups, the automaker has said. “Stellantis restates unwavering commitment to Maserati’s bright future as the unique luxury brand of the 14 Stellantis brands,” the carmaker said in a statement cited by Reuters, while also reaffirming commitment to its entire portfolio. CEO Carlos Tavares had warned last week if the company’s loss-making brands “don’t make money, we’ll shut them down”.
Stellantis buyouts
Stellantis was offering a new round of voluntary buyouts to its US salaried workers, the latest in a series of cost-cutting measures CEO Carlos Tavares was placing on its American operations. Reuters noted the automaker laid off 400 US salaried workers in March and last year twice offered buyouts to groups of thousands of US workers. Its backlog of inventory and weakened margins in the US have been a point of concern for Tavares in recent conversations with analysts.
Have a nice weekend.
Graeme Roberts, Deputy Editor, Just Auto
