Good morning! It’s Friday, November 3, 2023, and that is The Morning Shift, your each day roundup of the highest automotive headlines from around the globe, in a single place. Listed below are the essential tales you’ll want to know.
1st Gear: VW Kills A Fourth Battery Plant In Europe
Gross sales of electrical automobiles appear to have the business anxious proper now. Ford has reduce a shift at its F-150 Lightning plant as a result of dwindling demand, Basic Motors has pushed again its EV targets and now Volkswagen has killed plans for a fourth battery plant in Europe due to “sluggish” demand.
The Audi and Porsche proprietor backtracked on plans to open a brand new battery manufacturing facility in Europe this week, the place it had been eyeing up areas within the Czech Republic, Hungary, Poland or Slovakia. The corporate will now “not decide” on the place it’ll open a fourth plant as demand for EVs in Europe is “lagging,” stories Reuters. In keeping with the information outlet:
Volkswagen has already chosen websites for battery cell manufacturing in Salzgitter (Germany), Valencia (Spain), and St. Thomas (Canada), which it stated had mixed manufacturing potential of as much as 200 gigawatt-hours (GWh) per 12 months.
“Based mostly on market circumstances, together with the sluggish ramp up of the BEV (battery electrical automobile) market in Europe… there may be in the meanwhile no enterprise rationale for deciding on additional websites,” [Chairman Oliver] Blume stated in a press release offered by Volkswagen’s Czech unit Skoda Auto.
The German automaker’s backtrack follows its feedback final week that demand for EVs in Europe and around the globe was “not growing as anticipated.” VW reported that its orders for electrical fashions had halved in Europe, with simply 150,000 on order in contrast with 300,000 in 2022.
Nevertheless, the corporate will probably be hoping for a turnaround in fortunes as new fashions launch. The VW ID Buzz electrical van will launch in America subsequent 12 months and the corporate can be getting ready to launch the ID 7 electrical sedan within the coming months. On prime of that, it additionally has a tie-in with Ford that can see it construct electrical automobiles for the American automaker.
2nd Gear: BMW Gained’t Play The Pricing Recreation
Whereas VW is struggling to promote EVs, German counterpart BMW doesn’t appear to be having the identical issues. The corporate says its order ebook is full and there’s no want to chop prices and enter the tumultuous pricing conflict that was began by Tesla.
BMW revealed this week that gross sales of EVs have been “on observe” to make up 15 % of recent automobiles offered by the tip of 2023, in response to Reuters. As such, the automaker stated its order ebook is full into early 2024 that means there’s no want to start chopping prices for its automobiles. Reuters stories:
Pressed on whether or not BMW felt the necessity to reduce costs to spice up electrical automobile demand, notably in China the place a battle for market share has raged this 12 months, Chief Govt Oliver Zipse stated this method was not in BMW’s playbook.
“We have now no real interest in sinking costs to realize market share. That’s not our technique. And as you possibly can see, we’re managing to develop considerably even with very acceptable costs,” he stated.
Regardless of their excessive costs, BMW’s EVs have been promoting nicely, with the corporate reporting that it delivered 31,043 battery electrical automobiles within the U.S. to date this 12 months. That determine implies that EVs now account for extra that 12 % of its quantity gross sales throughout America.
third Gear: Chinese language EV Makers Are Killing It
In China, automobile corporations are additionally managing to promote electrical automobiles, however in a lot, a lot better volumes than BMW. Firms like Xpeng, Nio, Li Auto and BYD have all reported bumper gross sales in latest months, with BYD even threatening to overtake Tesla because the world’s largest EV vendor.
BYD is clearly the star of Chinese language automakers proper now, because it shifted 165,505 pure battery-powered passenger automobiles in October alone, CNBC stories. Nevertheless, the successes its seeing are spreading, and all the foremost Chinese language EV gamers noticed rising gross sales final month. CNBC stories:
Xpeng stated it delivered 20,002 automobiles final month. That’s a marked pickup from lackluster figures earlier within the 12 months. Slightly below half of deliveries in October have been of Xpeng’s G6 coupe SUV, launched in late June.
Li Auto’s month-to-month deliveries remained far forward of its rapid friends at 40,422 automobiles in October. The corporate’s at the moment out there automobiles usually are not purely battery-powered since they arrive with a gasoline tank for extending the battery’s driving vary.
Nio stated it delivered 16,074 automobiles in October, up barely from the prior month however beneath the 20,462 automobile deliveries reported for July.
Because of the rising gross sales for every firm, all of them noticed inventory costs rise in a single day off the again of the information. That got here in stark distinction to the $145 billion that Tesla wiped off its valuation in lower than two weeks.
4th Gear: Carvana’s Fortunes Are Selecting Up
Final 12 months was a 12 months of reckoning for struggling auto supplier Carvana, which posted loss after loss, scandal after scandal and ban on gross sales after ban on gross sales. Then, at first of the brand new 12 months, it pledged to scrub up its act and turn into worthwhile, and now there’s indicators of progress for the struggling firm.
In keeping with its newest outcomes, Carvana improved its internet revenue within the third quarter and extinguished greater than $800 million in debt, in response to Automotive Information. After a troubling 12 months in 2022, Carvana posted a “report” internet revenue for the three months to the tip of September 2023, as Automotive Information explains:
The Tempe, Ariz., on-line used-vehicle retailer reported internet revenue of $741 million, a report for the quarter, in contrast with a $508 million internet loss within the year- earlier quarter. Its third-quarter internet revenue was considerably aided by a nonrecurring $878 million acquire on debt extinguishment from a company debt change. Income fell 18 % to $2.8 billion.
Carvana reported $148 million in adjusted earnings earlier than curiosity, taxes, depreciation and amortization, which included $40 million in nonrecurring advantages.
Whereas issues are wanting up for the automobile retailer, there are nonetheless worrying indicators once you have a look at the variety of automobiles it offered. Within the three month interval, gross sales at Carvana have been down 21 % versus the identical interval final 12 months.