Strategy and Innovation Newsletter

Edition 11 2023

OEM News

Ford to scale back plans for $3.5 billion Michigan battery plant as EV demand disappoints, labor costs rise

DETROIT – Ford Motor is scaling back plans for a $3.5 billion battery plant in Michigan as consumers shift to electric vehicles more slowly than expected, labor costs rise and the company moves to cut costs.

Ford executives including CEO Jim Farley and Chair Bill Ford initially announced the facility in February. It quickly became a political target due to its connection to Chinese battery manufacturer Contemporary Amperex Technology Co., or CATL.

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Nissan accelerates switch to full electric with £1.1bn UK investment

Nissan is charging ahead with its vision for a zero emissions future, with confirmation that all three models made at its UK plant will go 100% electric.

Today’s announcement means the EV36Zero hub in Sunderland, Nissan’s blueprint for future manufacturing, will consist of three electric vehicles (EVs), three gigafactories and up to £3bn investment – great news for Nissan’s 7,000 UK employees and the 30,000 jobs supported in the UK supply chain.

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Stellantis to start in-depth talks with Italian govt to boost car production

Fiat-parent company Stellantis (STLAM.MI) will start in-depth talks with the Italian government next month to finalise a broad agreement for the country's automotive industry, including higher domestic production targets.

Stellantis CEO Carlos Tavares and Industry Minister Adolfo Urso said earlier this year they were working on a deal to increase the automaker's annual output in Italy to one million vehicles, without specifying a timeframe.

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Audi India to hike prices by up to 2% from January 2024

Audi India Head Balbir Singh Dhillon said that the company has effected price hikes due to rising input and operational costs.

German luxury car maker Audi on Monday said it will hike prices of its vehicles in the country by up to 2 per cent from January next year citing rising input and operational costs.

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Toyota Lays Out Its EV Battery Road Map, Including a Solid-State Battery (Eventually)

Toyota recently announced it had passed the benchmark of having built more than 300 million cars since the company was founded 88 years ago. But despite having pioneered hybrid powertrains, the company's high-level skepticism towards EVs means that very few of those cars have been fully electric; the Toyota bZ4X and Lexus RZ450e have only gone on sale in the last year. It is one of the last major automakers to enter the EV space.
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Renault Casts EV Business Ampere as Europe’s Answer to Tesla

After clearing up record losses and a toxic partnership, Renault SA Chief Executive Officer Luca de Meo is preparing his biggest bet on taking the French carmaker through the electric-car transformation.
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To tap into green incentives, Volvo looks to expand production in the US

Swedish automaker Volvo is considering an expansion of its EV production in the US, with a possibility of broadening its factory in Charleston, South Carolina, or breaking ground on a second site in the country, according to a new report.

The plan, in large part at least, is to help the company capitalize on green incentives from President Joe Biden’s Inflation Reduction Act (IRA), according to a report today in the Financial Times.

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China's Zeekr reveals revenue surge in updated financials ahead of US IPO

China's Zeekr reveals revenue surge in updated financials ahead of US IPO
China-based Zeekr Intelligent's revenue nearly doubled in the first nine months of the year, the electric car brand revealed in its updated paperwork filed with the U.S. securities regulator on Friday for its initial public offering. Zeekr, owned by Chinese automaker Geely Auto (0175.HK), had made its listing prospectus public earlier this month after confidentially filing in December to float its shares in New York. Read more

Insurance News

‘Dangerous’ shortfall in ADAS-qualified technicians could risk road safety

A current dangerous shortfall in technicians qualified to work on vehicles with ADAS could present a real road safety risk, according to the Institute of the Motor Industry (IMI).

At least one in 10 cars on UK roads will feature Level 2 autonomy by the end of 2023, growing to almost half of the car parc by 2030, according to estimates by the industry body.

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Why is it so expensive to insure an electric car?

New research shows a surge in drivers looking to save money and the planet with an electric vehicle (EV). But despite a growing desire to plug into a greener car, high insurance costs may be slamming on the brakes.

Around two in three motorists say they would consider buying an EV as their next vehicle , according to a survey of 2,000 UK drivers commissioned by Close Brothers Motor Finance.

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Digital Marketing & Retail News

Volkswagen invests in tools to help first time EV buyers

Volkswagen is enhancing its website with a series of online tools aimed squarely at those considering their first electric vehicle (EV, plus a new library of bite-sized videos for VW drivers who use YouTube. It said it wants to make life easier for its customers.

Three new e-mobility tools are now live on the Volkswagen website to help those considering their first EV. They provide instant data on range, charging times and running costs, model by model, and according to each person’s own driving profile.

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Hyundai And Amazon: Steering The Auto Industry In A Digital Direction

Amazon and Hyundai made big headlines last week when they announced a new partnership in which, starting in 2024, Hyundai auto dealers will be able to sell Hyundai vehicles through Amazon’s U.S. e-commerce platform.
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Leasing / Fleet News

BYD targets European fleet sector

The Chinese electric vehicle manufacturer produced its first car in 2003, and 20 years later has become the world’s largest EV maker. Electric car manufacturer BYD has the fleet sector firmly in its sights as it plans its European expansion.

The company is already market leader in China, the largest EV market on the planet, and next week will sell its 6 millionth electric vehicle.

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Fleets urged to keep up with autonomous driving developments

Fleet managers need to ensure they remain on top of developments in autonomous driving technology, according to Venson Automotive Solutions. The company has published a new white paper, entitled 'The journey towards full driving automation'.

The white paper notes that hype around driverless cars could be said to have peaked in around 2018-19, when predictions were made about the imminent introduction of the technology that ultimately failed to materialise.

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Other News

Tesla ‘faces ban’ on selling self-driving cars in Britain

Tesla faces a ban on selling its full self-driving technology in Britain under new driverless car laws, in a setback to Elon Musk’s plans for millions of robot-driven vehicles...
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Tesla rival BYD and other battery giants are betting on sodium for EVs and energy storage—and challenging the dominance of lithium-ion

Battery giants are starting to put their money on new sodium-based technology, a sign that there could be yet another shakeup in the industry that’s crucial for the energy transition.

Sodium — found in rock salts and brines around the globe — has the potential to make inroads into energy storage and electric vehicles because it’s cheaper and far more abundant than lithium, which currently dominates batteries.

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Hybrid vehicle sales surge in China, posing fresh threat to foreign automakers

As EV makers in China wage an intense price war to prop up slowing demand, Chinese brands with strong hybrid lineups are emerging as winners, attracting consumers with vehicles with long range that can cost less than gasoline cars.

The emerging trend may provide a glimmer of hope for global automakers such as Toyota (7203.T) and Honda who are pursuing "multi-pronged" electrification strategies, as electric vehicle (EV) sales lose momentum in Europe and the U.S., partly because of high auto financing costs.

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EU poised to water down new car pollution rules after industry lobbying

The EU is poised to water down a landmark piece of car pollution legislation after extensive lobbying from the automotive industry, which experts say will cause an estimated €100bn in health and environmental costs.

Analysis provided by the Consortium for Ultra-low Vehicle Emissions (Clove) exclusively to the Guardian and Voxeurop shows that half of the projected financial savings from the new Euro 7 standards on car emissions will be lost due to damage caused by excess nitrogen dioxide.

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JATO in the News

China’s EV Threat Sharpens As U.S. And Europe Stumble

China’s electric vehicles (EV) are getting cheaper, while the reverse is happening in Europe and the U.S., according to a report from auto industry consultants JATO Dynamics.

This will come as no surprise to shareholders in Ford, General Motors, Mercedes and Volkswagen, who have seen stock prices hit after ambitious sales targets for EVs stumbled.

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UK electric car prices are double those in China

Consumers in the UK are being asked to pay an average price for new electric cars that’s now more than double the average price of a new EV in China, according to a report from global automotive data experts JATO Dynamics.

As latest figures from the Society of Motor Manufacturers and Traders show that new EV registrations in the UK are faltering – down to 15.6 per cent of market share in October, from 20 per cent earlier in the year – JATO’s report points to the widening gap between prices asked here in the UK and China.

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EV demand in Europe to slow as customers await affordable electric cars

After years of accelerating growth, Europe's electric car sales appear to be entering a go-slow zone as drivers wait for better, cheaper models that are two to three years down the road.

Fully-electric sales in Europe were up 47% in the first nine months of 2023, but instead of celebrating, automakers including Tesla (TSLA.O), Volkswagen (VOWG_p.DE) and Mercedes-Benz (MBGn.DE) sounded a sombre note.

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JATO’s overview of local markets

Europe

As the industry moves into the last month of the year, attention now turns to plans for updates into early 2024 and beyond.

At the end of November, an EV show at London’s ExCel exhibition centre showcased new initiatives and demonstrated the changing face of vehicle charging and technologies.

London’s Deputy Mayor for Transport, Seb Dance, announced a number of new strategies that the city has plans to implement. In addition to the launch of the ULEZ expansion, Dance explained that the capital now has over 18,000 charge points on its roads, with plans to increase to 60,000. The expansion will include the building of five new ‘ultra rapid’ hubs, with 150 kW chargers (the construction of which is currently out to tender) and there are plans to build 20 more sites over the next seven years. This aims to meet both demand and net zero emissions target for 2030.

The target is fuelled by London’s already successful reduction in the number of diesel sales, which are down from sales totalling 40% of vehicles in 2016 to less than 5% last year. EV sales are also now outpacing the rest of the UK, with nearly 25% of new vehicle sales being electric in 2022, compared to just 1% in London in 2018.

Aoife O’Grady, Head of Office at Zero Emission Vehicles Ireland (ZEVI) also spoke at the same event on a number of schemes and initiatives being discussed across the country. These included a roll-out of ‘Community Charging Hubs’, shared apartment charging facilities, national ‘en-route’ EV charging network plans, substantial vehicle grants for passenger cars, zero emission HDVs, taxis and light commercial vehicles, as well as a shared charging pilot scheme launching in 2024.

The Austrian market will see its updated NoVa tax introduced in January next year as well as Chinese brand BYD’s launch in the country.

In Switzerland, the Government confirmed at beginning of November it will implement a tax on BEVs (4% of the retail price), as of January 2024. VAT is also expected to go up at the same time (from 7.7% to 8.1%).

The Mayor of Milan, Giuseppe Sala, has announced a proposal to reduce pollution centrally by placing a ban on private passenger cars. If the motion gets the green light, the measure will come into force in one of Italy’s busiest cities from December 2024.

Tesla has seen workforce in the Swedish market go on strike over the refusal to meet the demands of a collective bargaining agreement (which offers protection to more than 90% of workers in Sweden) from more than 100 mechanics at their service centres. This is the first time this has occurred anywhere for the US car brand. There are threats that similar action may spill into other areas of Europe.

In Norway, tax changes are expected to be implemented in January, coinciding with the removal of a discount offering on plug-in hybrid models from next month.

Asia Pacific

Xiaomi, best known as an Android smartphone manufacturer in China, has unveiled the HyperOS (aka SurgeOS), its latest operating system designed to connect personal devices, cars and smart home devices to Xiaomi’s smart ecosystem. The HyperOS is based on Linux and Xiaomi’s own Vela platform for IoT (internet of things) devices. This coincides with the launch of its new Xiaomi SU7, featuring two powertrain options: RWD with a 220kW motor, and an AWD system with a 275kW + 220kW motor setup.

Stellantis is set to become a strategic shareholder of Leapmotor with a EUR 1.5 billion investment that will bolster Leapmotor’s Global Electric Vehicle Business. The move will see Stellantis acquire 20% of the Chinese company, making them a significant shareholder. The deal also outlines the formation of ‘Leapmotor International’ a joint venture that is expected to begin manufacturing and shipping products by the second half of 2024 in China and abroad.

Thailand has introduced its new EV subsidy program called ‘EV3.5’, running from 2024 through to 2027. EV3.5 is the successor to the EV3.0 subsidy program which is due to expire at the end of this year. In essence, there will be a change in cash subsidy from THB 150,000 as seen in EV3.0, to THB 100,000 for EV3.5. Excise tax reduction from 8% to 2% remains the same. This is in line with Thailand’s administration policy to promote Thailand as an EV production hub by 2030, with 30% of vehicle sales being BEV. Thanks to these initiatives, BEV sales increased from approximately 10% in January 2023 to 22% as of September 2023.

In further news from the market, Thailand’s Industrial Ministry is due to enforce a Euro 5 emissions standard from 1 January 2024 onwards for:

1) diesel-powered passenger vehicles and small commercial utes (currently Euro 4)

2) large commercial vehicles in both petrol and diesel (currently Euro 3)

In addition, petrol-powered passenger vehicles and small commercial utes, currently Euro 4, will skip to Euro 6 from 1 January 2025 onwards. Lastly, all types of vehicles will need to be Euro 6 complaint by 1 January 2026. The regulation is aimed at Thailand enhancing its competitiveness and attracting FDI in advanced technology and clean energy.

Changan will also officially launch its Deepal sub-brand in Thailand, by showing its model range at the Motor Expo later this month.

Stellantis will establish a new national sales company (NSC) in Malaysia in the first quarter of 2024, the automotive group directly managing sales and distribution of its brands in the market. Its arrival means the taking over of sales and distribution of Peugeot vehicles in Malaysia, though current distributor Bermaz will continue to work with Stellantis for vehicle sales through its own network, Stellantis said in its statement.

Americas

It was announced earlier this month that electric and hybrid cars in Brazil will now pay an import tax, starting in January 2024. Previously, this was set at 0% for EVs, including hybrids. The rate initially charged will be 12% for hybrids (light, full or plug-ins) and 10% for electric vehicles. It will gradually rise to 35% in July 2026, which will be the same tax paid for combustion vehicles.

To mitigate this, the Government will release import quotas during this transition period. In the first period, between January and July 2024, a quota of USD 284 million will be made available for pure EVs, USD 226 million for Plug-Ins and USD 130 million for mild hybrids.

Earlier this month, the Los Angeles Auto Show took place, with it showcasing a number of new crossover models. Kia launched its updated Sorento compact crossover, and sister brand Hyundai also displaying its new-generation Santa Fe midsize model. Additionally, Lucid presented its second model in the range, the Gravity crossover with its three-row seating configuration and both Subaru and Toyota offered their latest Forester and Crown Signia crossover models respectively.

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About us

JATO Dynamics, founded in 1984, now has representation in over 51 countries around the world. We provide precision under pressure, providing the world’s most timely, accurate and up-to-date automotive information on vehicle specifications, pricing, sales and registrations for over 30 years. We offer more than just data, as we have watched the world change, and consumer mindsets alter with it we have been able to offer insights that help inform the industry. We are able to react to short-term market movements, plan for long-term developments and ultimately to meet the needs of our clients. Visit JATO at www.JATO.com for more information.

Contact

Don Gow | Research Manager
Donny.gow@jato.com

Alice Song | Content and Communication Manager
Alice.song@jato.com