Chinese smartphone company Xiaomi revealed on Dec. 28, 2023, its forthcoming electric car, the SU7 sedan.
CNBC | Evelyn Cheng
BEIJING — Chinese consumer electronics company Xiaomi on Thursday detailed plans to enter China’s oversaturated electric vehicle market and compete with automaker giants Tesla and Porsche with a car model it says it spent more than 10 billion yuan ($1.4 billion) to develop.
The company’s car model, known as Xiaomi SU7, “is in trial production and it will hit the domestic market in a few months,” CEO Lei Jun said in a Tuesday post on the X social media platform, formerly known as Twitter. “The price has not been finalized yet.”
Pronounced “Sue Qi” in Mandarin, the Xiaomi SU7 beats Porsche’s Taycan and Tesla’s Model S on acceleration and other metrics, Lei said during a three-hour presentation on Thursday.
He laid out bold ambitions to become an industry leader, including in autonomous driving and noted that the SU7 design team previously worked at BMW and Mercedes Benz.
Sales are due to begin in 2024, after more than three years of development— during which electric vehicles have taken off in China’s highly competitive market, and domestic automakers have begun to differentiate their products through ambitious offerings of car-compatible tech.
This is an area of potential advantage for Xiaomi, which is best known for its smartphones and home appliances and previously said it wants to create a “‘Human x Car x Home’ smart ecosystem.”
The SU7 is integrated with Xiaomi’s smartphones and internet-connected home appliances, Lei announced Thursday. He emphasized the company’s efforts to ensure data privacy among the devices and create a car that surpasses U.S. safety standards for rear-end collisions.
Lei said the vehicle will also be compatible with Apple’s iPhone, iPad, CarPlay and AirPlay. The U.S. giant has yet to release a car despite widespread speculation of such plans.
The document described the cars as purely battery powered, with driving range of 628 kilometers (390 miles) to 800 kilometers. The ministry listed a subsidiary of state-owned BAIC Group as the manufacturer for the Xiaomi SU7.
While the car isn’t yet available, Xiaomi has started selling its flagship smartphone and smart watch in the “aqua blue” and “olive oil green” colors of the SU7 sedan.
A price for the SU7 has yet to be revealed, but Lei hinted the purchase would not be cheap and dismissed rumors of a 99,000 yuan or 140,000 yuan price tag.
Read more about China from CNBC Pro
The Xiaomi car tech event comes as several domestic EV players have recently revealed new electric vehicles.
Nio on Saturday debuted its 800,000 yuan ($113,090) ET9, set to begin deliveries in the first quarter of 2025.
Huawei’s Aito brand on Tuesday unveiled its M9 SUV — starting at 469,800 yuan and due to begin mass deliveries in late February 2024.
Zeekr, backed by Geely, on Wednesday announced its 007 sedan would start at 209,000 yuan with deliveries beginning on Jan. 1.
Xiaomi shares closed 0.25% lower in Hong Kong trading on Thursday. The company’s Hong Kong-traded shares are up by more than 40% so far this year. The business claimed record sales of more than $3 billion across various e-commerce platforms during this year’s Singles Day shopping festival.
Updated Dec 27, 2023, 7:34 am EST / Original Dec 27, 2023, 4:26 am EST
Stock futures traded slightly lower Wednesday after the S&P 500 finished higher Tuesday and just 0.45% below its record close of 4,796.56 hit Jan. 3, 2022. The broad market index has risen 24% this year and has gained 4.5% this month as traders bet the Federal Reserve will begin cutting interest rates as soon as March.
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Tesla is recalling more than 120,000 vehicles over doors that fail to comply with U.S. government regulations.
In a letter posted on the National Highway Traffic Safety Administration’s website Thursday, Tesla acknowledged the affected doors can be unlocked during a crash, which could cause the door to unlatch and open, increasing the risk of injury.
Affected vehicles include Tesla Models S and X manufactured for model years 2021 through 2023. Tesla said it was not aware of any injuries as a result of the issue as of Dec. 14.
As a remedy, Tesla is releasing an over-the-air (OTA) software update free of charge. Owner notification letters are expected to be sent out Feb. 17, 2024.
Last week, Tesla announced a recall for nearly all its U.S. vehicles — some 2 million — due to concerns about the safety of its autopilot driver-assistance feature. A federal investigation found that its autosteer function may have led some drivers to abandon responsibility for the operation of their vehicles.
That recall came after one in February affecting more than 360,000 vehicles related to Tesla’s “full self-driving” software.
Tesla did not respond to multiple requests for comment.
In a post last week on X, formerly known as Twitter, Tesla issued a statement accusing some news outlets of misconstruing “the nature of our safety systems,” adding that “incontrovertible data” shows Tesla’s features are “saving lives and preventing injury.”
Elon Musk owns X and Tesla.
A NHTSA spokesperson told NBC News last week that its investigation into Tesla’s autopilot features “remains open as we monitor the efficacy of Tesla’s remedies and continue to work with the automaker to ensure the highest level of safety.”
Several Tesla electric vehicles are parked in front of a Tesla service center in the Kearny Mesa region, in San Diego, California, U.S., October 31, 2023.
The investor, who also happens to work in the European auto industry, bought Tesla shares nearly every month in 2023 and has almost doubled the size of his position over the course of the year. Sustic has no other electric vehicle holdings out of a belief that competitors won’t be able to beat Tesla’s technology.
“There is no catching up with them,” said the 32-year-old, who also has two Tesla cars at his home in Croatia. “It’s just a matter of time when the stock will explode.”
Sustic isn’t alone. Tesla, which entered the S&P 500 three years ago this week, is on pace to attract the largest flow of individual investor dollars of any security in 2023, according to data from Vanda Research. The firm calculates net inflows to find these favorites, subtracting the amount of stock sold from what was bought.
That means Tesla will eclipse even the SPDR S&P 500 ETF Trust (SPY), which tracks the largest stock market index in the world. This underscores the stock’s fast ascent to retail-investor glory, especially considering Tesla wasn’t even among the top 20 equities that individual investors bought before 2019, Vanda data shows.
Tesla’s increasing favor among retail traders can be tied to its comeback in 2023, according to Christopher Schwarz, a finance professor at the University of California Irvine. After plunging 65% in 2022, the Elon Musk-led stock has more than doubled in 2023.
The stock has outperformed the market this year in tandem with other mega-cap technology equities dubbed the “Magnificent 7.” Many investors looking to play “disruptive” technology in this elite group have focused on Tesla and chipmaker Nvidia. But after more than tripling this year thanks to an appetite for all things tied to artificial intelligence, Schwarz said Nvidia may be too expensive for many individual investors.
Schwarz researches retail trader behavior, and thinks a lot of attention comes from Musk. The Tesla CEO’s contentious purchase of X, formerly known as Twitter, has brought increased media coverage as well as scrutiny of the billionaire business mogul, Schwarz said.
When faced with thousands of stocks to choose from, Schwarz said individual traders mainly look for names that grab their attention, are familiar and have saliency to current trends. Given Musk’s persona, the growing ubiquity of Teslas on the road and concerns about climate change, Schwarz said Tesla checks many boxes for everyday investors.
“It’s always in people’s minds to trade when they’re looking for something to trade,” Schwarz said.
Individual investors told CNBC that Tesla’s bumpy ride in recent years hasn’t made them doubt the company as much as it’s created opportunities to pick up shares at cheaper prices. To them, there’s little doubt Tesla’s share price will continue to surge.
One of those is Jeremy Ford, a construction contractor in Virginia who first bought Tesla shares as the pandemic took hold in 2020. He became interested when his wife considered — and ultimately ended up — purchasing a Tesla.
The 48-year-old now holds about the same number of Tesla shares as he did when 2023 began, but lowered his cost basis. Given an interest in disruptive technology, Ford reallocated some of those profits to new stakes in Palantir and Nvidia. The latter is tracking to see the fourth largest net inflows this year, while the former is not in the top 20, according to Vanda data.
Elon Musk speaks onstage during The New York Times Dealbook Summit 2023 at Jazz at Lincoln Center on November 29, 2023 in New York City.
Slaven Vlasic | Getty Images
Still, he’s all in on Tesla’s story, citing the push into robots and AI chips as cause for long-term optimism. His only serious concern would be if Musk left and the company’s performance worsened.
“If you can find a company that makes a product that people love, and it’s different than anything that other people have, then you have that chance to really make substantial money,” Ford said. “At some point, I do believe that I’ll look back at the price of the stock now and go, ‘Wow, that was a bargain.’”
Despite Tesla’s strong year on Wall Street and Main Street, others see challenges ahead. Roth MKM analyst Craig Irwin said profit margins could come under pressure from additional price cuts amid cooling growth.
But that may not dent individual investors’ enthusiasm. In fact, Irwin said the stock could be a beneficiary of turbulence in the electric vehicle industry, because any uncertainty would lead investors to companies like Tesla that have proven they can design, make and sell vehicles.
Given their affinity for the brand, Irwin said retail investors may also stick with Tesla longer than institutional investors. That could keep Tesla stock “levitating” above where it would otherwise be priced.
“Retail tends to trade on guts and heart,” Irwin said. “And a lot of people love Tesla.”
Changes in individual investor sentiment are so key to Tesla’s stock performance that hedge funds take note of these trends when evaluating what to do, the analyst noted earlier this year.
Irwin is in the majority on Wall Street in giving Tesla a neutral rating of no more than “hold,” neither recommending it be bought nor sold. Following 2023’s rebound, the average analyst surveyed by LSEG sees the stock falling about 13% over the next year.
Individual investors have often been the butt of the joke, with investing experts pointing to their inability to time the market and best allocate their money.
Yet individual traders have gained attention following the rise of short-squeezed “meme” stocks during the pandemic. Even as that craze fizzled, retail trading remains popular: Everyday investors put more than four times the amount of money into their 20 most-bought securities in 2023 than they did in all of 2018, according to Vanda data from early December.
For Schwarz, the UC professor, the flight to Tesla this year is complicated.
It’s concerning, he said, if individual investors are making bigger bets on single stocks than funds that invest in diversified indexes like the S&P 500 ETF. Still, while investments that spread bets across a pool of stocks is safer, trying to pick certain companies is more desirable than not being in the market at all, he said.
“Traders would be much better off if they just bought [the] index and forgot the password to their brokerage account,” he said. But, “even if Tesla doesn’t do as well as the market, it’s still better than probably just spending it on useless consumption and not participating.”
Tesla Model Y, equipped with FSD system. Three front facing cameras under windshield near rear view mirror.
Mark Leong | The Washington Post | Getty Images
Tesla drivers in the U.S. were involved in accidents at a higher rate than drivers of any other brand of vehicle over the past year, according to a new study of 30 automotive brands by LendingTree.
The researchers analyzed quotes from people looking to insure their own vehicles, and did not include accident or incident data involving drivers of rental cars, a spokesperson for LendingTree told CNBC by email on Tuesday.
The study said, “It’s hard to nail down why certain brands may have higher accident rates than others. However, there are indications that certain types of vehicles attract riskier drivers than others.”
With 24 accidents per 1,000 drivers during the period from mid-November 2022 to mid-November 2023, Tesla drivers clocked in with the worst accident rate in the U.S., followed by Ram drivers who were involved in about 23 accidents, and Subaru drivers who were involved in about 21 accidents per 1,000 drivers during the year.
By contrast, drivers of Pontiac, Mercury and Saturn vehicles were all involved in fewer than 10 accidents per 1,000 drivers during the period of the study.
BMW drivers were the most likely to engage in driving under the influence, the researchers found. They were involved in about 3 DUIs per 1,000 drivers in a year, about twice the rate of DUIs among Ram drivers, who were the second worst drivers in this regard.
For driving incidents overall, which included not only accidents but also DUIs, speeding, and other citations, Ram drivers had the highest incident rate, while Tesla drivers had the second-highest incident rate in the U.S.
Accidents, DUIs, speeding and other citations can all lead to higher insurance rates for drivers. Lending Tree found that one speeding ticket can bump up the price of vehicle insurance by 10% to 20%, accidents can increase rates by around 40%, while DUIs can lead to a rate increase of 60% or more.
The Lending Tree findings about drivers with the highest rates of accidents and incidents by vehicle brand followed an Autopilot software recall by Tesla in the U.S. that impacts some 2 million of the company’s electric vehicles.
Tesla EVs come standard with an advanced driver assistance system (ADAS) marketed as Autopilot. The company sells more extensive driver assistance packages called Enhanced Autopilot and Full Self-Driving (or FSD) options in the U.S. as well. Those who pay for FSD can also test software features that are not fully debugged yet on public roads.
Tesla’s ADAS technology is meant to help drivers with steering, acceleration and braking. CEO Elon Musk claimed in 2021 that a Tesla driver using Autopilot was about 10 times less likely to crash than a driver of the average car. While Tesla publishes its own safety reports, the company has not allowed third-party researchers to evaluate their data to confirm or debunk such claims.
Musk has also touted Tesla’s systems as if they are already, or will soon be, safe to use hands-free — yet Autopilot and Full Self-Driving systems still require Tesla drivers to remain attentive to the road and ready to steer or brake in response at all times.
A two-year investigation by the National Highway Traffic Safety Administration (or NHTSA) found that Tesla’s Autosteer feature, which is part of Autopilot and FSD, had safety defects that may cause an “increased risk of a collision.” NHTSA said it found that Tesla drivers can too easily misuse the cars’ Autosteer feature and may not even know whether it is engaged or switched off.
According to filings with the federal vehicle safety regulator, Tesla did not concur with NHTSA’s findings but agreed to conduct a voluntary software recall, and promised to make safety improvements to Autosteer with “over-the-air” updates. The updated software will nag drivers to pay attention to the road more often, and lock drivers out of using Autopilot if Tesla’s systems detect irresponsible use.
Tesla did not respond to a request for comment about the Lending Tree study and why the accident and incident rates may have been so high among Tesla drivers in the U.S. over the past year.
Read the full Lending Tree study of the best and worst drivers in the U.S. by auto brand, here.
Chevrolet is experiencing its highest rate of loyalty ever at the moment, making it a great time to introduce new vehicles. The launch of the 2024 Chevrolet Blazer EV battery-electric sport utility vehicle (SUV) capitalizes on that timing.
SUVs are a 64-percent slice in the EV sales pie and Chevy expects that share to continue. The General Motors brand wants a large swath of current Equinox and Blazer gasoline drivers, as well as people driving competitors like the the Ford Mustang Mach-E, Hyundai Ioniq 5 and others to convert to electric power without giving up the things they like about their current models.
The best thing about the 2024 Chevy Blazer EV is choice. Buyers are able to choose from a variety of trim levels, powertrains, paint colors, safety technology and comfort and convenience features in more combinations than the average EV allows. In this way, it’s very similar to a “normal” car.
Like many Chevrolets, the Blazer EV is offered in LT, RS and SS trim levels, each with a slightly different character. The LT features a monochromatic appearance and 19-inch wheels. The RS model gains black accents on the grille and elsewhere, along with standard 21-inch wheels. The high-performance SS model is the most aggressive with a third unique grille, two-tone color scheme with a black roof and 22-inch wheels.
2024 Chevrolet Blazer EV front view. The 2024 Blazer EV delivers either 288 horsepower, 340 horsepower or 557 horsepower depending on trim. General Motors
The all-wheel drive (AWD) Blazer RS EV is available now at dealerships nationwide. The Blazer 2LT AWD and RS rear-wheel drive will follow in the coming weeks. The Blazer SS and less-expensive front-wheel drive models will launch in the coming months, according to Chevrolet.
The new Blazer electric SUV is one of the few vehicles to be offered with all three options for drivetrain.
There are two battery sizes, 85 kilowatt (kW) and 102 kW, leading to ranges of 279 miles for all-wheel drive Blazers and 324 miles for rear-drive options. Chevrolet hasn’t revealed the range of the front-wheel drive model yet.
Blazer comes with an 11.5-kW onboard AC charging module for at-home charging and public charging. It has a high-speed DC public fast-charging capability of up to 190 kW, recharging 78 miles of all-electric range in about 10 minutes.
The front lighting conveys the state of charge while the vehicle charges. It increases in speed and intensity as the battery’s charge increases.
The 2024 Blazer’s cabin is huge with a massive trunk for cargo, even without the rear seats folded down. Those rear seats will also easily fit a 6-foot person behind another 6-foot person in front. Three child or booster seats could fit in the second row as well.
2024 Chevrolet Blazer EV rear three-quarter view. The Blazer EV comes with 21- or 22-inch wheels. General Motors 2024 Chevrolet Blazer EV parked. The 2024 Blazer EV comes in LT, RS and SS trims. General Motors
The rocket booster theme is strong here, going even further than the Chevy Camaro with red accented, round climate vents with fluting that almost looks like fire. It looks especially cool with those accents in the sun where they reflect and shine a bit. The Blazer EV still has physical controls for climate and volume, though there are redundant and permanent climate icons the touchscreen too.
That central touchscreen infotainment system measures 17.7-inches and is connected to an 11-inch digital driver instrument cluster on all trims. A head-up display, the rear camera mirror surround vision, the auto sense power liftgate and heated wipers are optional. Google Built-in is standard but Apple CarPlay is not available.
One day of driving wasn’t enough to get used to the system, which doesn’t seems as straightforward as the Apple CarPlay interface but can be used with voice control. That big dual-screen setup is standard across the Blazer EV lineup.
The seats are perforated suede (in the rear-drive RS) or faux leather (in the AWD RS) and feature color accents either in the stitching or on the panels, though they’re surprisingly stiff for this type of vehicle. However, taller bolsters do help when winding through mountain roads at speed, keeping the driver firmly in place.
2024 Chevrolet Blazer EV interior. The 2024 Blazer EV comes standard with a 17.7-inch touchscreen infotainment system. General Motors 2024 Chevrolet Blazer EV charging. The 2024 Blazer EV can regain up to 78 miles of range in about 10 minutes on a DC fast charger. General Motors
Super Cruise, GM’s hands-free, eyes-up assisted driving software will be available next year. The system is standard on the Blazer SS and optional on RS and LT models. Elsewhere in safety, the Blazer will also come with expected features such as emergency braking, forward collision alert, following distance indicator (which is more useful than it sounds), lane keep assist and departure warning.
2024 Chevrolet Blazer EV RS RWD Review
The Blazer EV RS with rear-wheel drive is the lineup’s middle model. It offers up to 340 horsepower (hp) and is expectedly quick from a standstill and plenty powerful when already cruising. But, both the brake pedal and regeneration are exceptionally heavy.
The regeneration is adjustable between off, low and high. The highest mode regenerates the most energy, but does throw the driver’s and passenger’s head forward when jumping off the throttle.
Tour, Sport, Snow/Ice and My Mode driving modes adjust the steering effort, throttle, brakes and Jetson’s like acceleration sound, though the suspension is fixed in each model.
Regardless, the Blazer EV is one of the more comfortable electric SUVs on the market today. Despite the 21-inch wheels, it thuds smoothly and quietly over small bumps and rolls completely over bigger potholes with those giant tires.
In Sport mode the rear-drive Blazer RS EV seems to love those twisting roads in the mountains near San Diego, especially alongside heavy regeneration. It allows a different kind of control than a standard two-pedal, gas-brake setup. A driver can accelerate hard around corners, and then pull back on the accelerator a little bit to slow for the next corner and then shove it back down for the next straight section.
Though heavy on the scales around 5,500 pounds, the Blazer feels lighter during spirited driving.
As with all EVs, the low center of gravity is key for handling. The Blazer is planted around curves and doesn’t lean. It also stays more level than expected when braking and accelerating hard.
2024 Chevrolet Blazer EV front three-quarter view. The 2024 Blazer EV offers space for five passengers. General Motors
2024 Chevrolet Blazer RS AWD Review
We also tested the all-wheel drive electric Blazer. Together the two motors deliver 288 horsepower and though it didn’t feel as quick as the RS RWD model, it was perfectly suited to getting up to and staying at expressway speeds. Chevy says the RS AWD model has a zero-to-sixty time of about 6 seconds, the rear-wheel drive RS hits the mark in 5 seconds and the forthcoming SS will go the same distance in under 4 seconds.
The 2024 Chevrolet Blazer RS all-wheel drive is on sale now for $60,215; the 2LT AWD, also on sale now, is $56,715 before destination and taxes, as well as EV tax credits. The front-wheel drive Blazer 2LT launches next year with a price less than $50,000, according to Chevy and the RS rear-wheel drive with the bigger electric motor is $61,790.
The Blazer isn’t one of the top sellers in the midsize segment, that space is occupied by the Jeep Grand Cherokee and Hyundai Santa Fe. However, being a recognizable name in a sea of new electric options might prove an advantage in the current climate, especially with its high brand loyalty.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Ford workers produce the electric F-150 Lightning pickup at the automaker’s Ford Rouge Electric Vehicle Center on Dec. 13, 2022.
Michael Wayland | CNBC
DETROIT — Ford Motor will cut planned production of its all-electric F-150 Lightning pickup roughly in half next year, marking a major reversal after the automaker significantly increased plant capacity for the electric vehicle in 2023.
The new production plans call for average volume of around 1,600 F-150 Lightnings a week at Ford’s Rouge Electric Vehicle Center in Dearborn, Michigan, starting in January, according to a source familiar with the decision. The automaker most recently planned to produce roughly 3,200 of the vehicles on average per week.
“We’ll continue to match production with customer demand,” a Ford spokeswoman said Monday.
Ford executives have recently said the automaker will match production to demand, as the company cancels or postpones $12 billion in upcoming EV investments.
The production cuts for the F-150 Lightning were first detailed in a planning memo to suppliers obtained by Automotive News. The memo cited “changing market demand” for the cuts, according to the publication.
EV demand has been slower than many expected, as prices and interest rates remain high. Automakers are working to cut costs of producing all-electric vehicles, while rethinking production and product plans for the years ahead.
Ford spent six weeks earlier this year to increase capacity of the F-150 Lightning at the Michigan plant, which was expected to be capable of producing 150,000 of the all-electric trucks, three times its initial planned output.
Sales of the F-150 Lightning have steadily increased in 2023, notching a monthly record of roughly 4,400 sold in November. The company has only sold 20,365 of the trucks this year through November, up 54% from a year earlier.
It’s year-end and
Tesla is in the midst of its final push to meet Wall Street expectations for a record quarter. It won’t be easy for the battery-electric vehicle leader to sell almost half a million cars amid
higher interest rates and more EV competition. Instead of price cuts, Tesla is using a new tool to move metal: Incentives.
C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk takes the stage during the New York Times annual DealBook summit on November 29, 2023 in New York City.
The postal service’s workers blocked Tesla license plate deliveries late last month in a show of solidarity with mechanics striking over the company’s refusal to sign a collective bargaining agreement with employees, which is customary in Sweden.
Tesla took legal action while CEO Elon Musk branded the move “insane,” but a Swedish court ruled Thursday that PostNord will not be forced to deliver license plates for now.
Possibly more concerning for Musk, however, will be the sympathy strikes spreading throughout Scandinavia as fellow unions coalesce their support behind the region’s deeply entrenched principle of collective bargaining as a lynchpin of labor relations.
Union members across a host of Swedish industries have joined the secondary strike action with members of trade union IF Metall, who have been embroiled in an ongoing battle with Tesla for around six weeks.
Norway’s largest private sector union then on Wednesday announced its intention to begin blocking vehicle shipments destined for Sweden from Dec. 20.
The strikes then spread further across the Nordic region, as Finnish transport workers’ union AKT on Thursday confirmed that a blockade on Tesla vehicles earmarked for Sweden would also come into force across all Finnish ports from Dec. 20.
AKT Chairman Ismo Kokko said collective agreements for workers were “an essential part of the Nordic labor market system,” according to Finnish newspaper Helsingin Sanomat.
Meanwhile, one of Denmark’s largest pension funds on Wednesday announced it would sell its holdings of Tesla stock over the U.S. company’s refusal to enter into agreements with labor unions. PensionDanmark sold the shares at a market value of 476 million Danish kroner ($68.8 million), according to Reuters.
PensionDanmark told CNBC on Friday that its approach to responsible investments is “based on international conventions and agreements, including the ILO conventions regarding labor rights.”
“If a company does not live up to our policies, we initially try to influence the company through active ownership – both directly and in coordination with other shareholders. This has also been the case in relation to Tesla,” the pension fund said in an emailed statement.
Should the fund assess that it is not able to exert sufficient influence on a company, as has transpired with Tesla, it may decide to exclude that business’ shares from its holdings.
“Seen in the light of the fact that the conflict is now spreading to Denmark as well as Tesla’s recent very categorical refusal to sign an agreement in any country, we have come to the conclusion that we as investors currently hardly have the opportunity to influence the company. And that is why we are now putting Tesla on our exclusion list,” PensionDanmark added.
Tesla’s policy of not pursuing collective bargaining is meeting a broad ideological stalemate — such agreements between employers and workers serve as a lynchpin for Scandinavian economic models, which guarantee workers the right to negotiate wages, vacation, overtime pay and other conditions.
Tesla did not immediately respond to a CNBC request for comment.
DETROIT — As sales of all-electric vehicles grow more slowly than expected, major automakers are increasingly meeting their customers in the middle.
More and more companies are reconsidering the viability of hybrid cars and trucks to appease consumer demand and avoid costly penalties related to federal fuel economy and emissions standards.
The shifting strategies run counterintuitively to industrywide EV messaging of recent years. Many auto companies have begun to invest billions of dollars in all-electric vehicles, and the Biden administration has made a push to get more EVs on U.S. roadways as quickly as possible.
But hybrid vehicles — those with traditional internal combustion engines combined with EV battery technologies — could help the automotive industry lower fuel consumption and emissions in the short-term, while easing consumers into vehicle electrification.
Sales of traditional hybrid electric vehicles, or HEVs, such as the Toyota Prius, are outpacing those of all-electric vehicles in 2023, according to Edmunds. HEVs accounted for 8.3% of U.S. car sales, about 1.2 million vehicles sold, through November of this year. That share is up 2.8 percentage points compared with total sales last year.
EVs made up 6.9% of sales heading into December, or roughly 976,560 units, up 1.7 percentage points compared with total sales last year. Sales of plug-in hybrid electric vehicles, or PHEVs, accounted for only 1% of U.S. sales through November.
“There’s been so much talk over the past few years about the move toward electrification and sort of forgoing hybrids, but … hybrids are not dead,” said Jessica Caldwell, Edmunds executive director of insights. “There’s a lot of consumers out there that are interested in electrification, maybe not ready to go fully electric.”
Hybrids can also cost less and relieve many concerns typically associated with EVs such as range anxiety and lack of charging infrastructure. The average hybrid this year cost $42,381, according to Edmunds. That’s below the roughly $59,400 average for an EV; $60,700 for a PHEV; and $44,800 for a traditional vehicle.
Morgan Stanley earlier this month said Toyota Motor, Honda Motor and Hyundai Motor, including Kia, account for 9 out of 10 hybrid sales in the U.S. Representatives for those automakers said they are actively attempting to increase production and sales of hybrid vehicles in the U.S.
“While the transition to full battery electric transportation will take time, hybrids and plug-in hybrids will play an equally important role in Kia America’s near and mid-term goals,” Eric Watson, vice president of Kia America sales, said in a statement to CNBC.
And other companies, such as the Detroit automakers, are following suit.
The Detroit automakers have varying strategies for hybrid vehicles.
Ford Motor offers PHEVs but is leaning into HEVs, announcing plans in September to double sales of the V-6 hybrid model during the 2024 model year to roughly 20% in the U.S. It’s part of Ford CEO Jim Farley’s plans to quadruple the company’s production of gas-electric hybrids.
Ford’s hybrid sales through November of this year are up 23% over the same period in 2022 to more than 121,000 units, or 6.8% of its total sales through that point. In comparison, Ford’s EV sales are up 16.2% to roughly 62,500 units, accounting for 3.5% of its total sales.
Battery breakdown
Both hybrids and plug-in hybrids have a traditional engine combined with EV technologies. A traditional hybrid such as the Toyota Prius has electrified parts, including a small battery, to provide better fuel economy to assist the engine. PHEVs typically have a larger battery to provide for all-electric driving for a certain number of miles until an engine is needed to power the vehicle or electric motors.
Chrysler parent Stellantis, for its part, is leaning on PHEVs for its electrification strategy, before introducing a host of EVs starting next year. The company is the top seller of plug-in hybrid electric vehicles in the U.S., and the vehicles accounted for about 10% of the company’s third-quarter sales, led by Jeep Wrangler and Grand Cherokee SUVs.
But General Motors isn’t ready just yet to alter its EV plans, which include a goal to exclusively offer all-electric vehicles by 2035.
GM led the way for plug-in electric vehicles with the Chevrolet Volt during the 2010s. The company discontinued the vehicle in early 2019, citing demand and cost concerns.
Since then, the automaker has not offered another hybrid vehicle in the U.S. other than the recently launched Chevrolet Corvette E-Ray, a hybrid version of the famed sports car. GM does offer hybrids, including PHEVs, in China.
2024 Chevrolet Corvette E-Ray hybrid sports car
GM
“We still have a plan in place that allows us to be all light-duty vehicles EV by 2035,” GM CEO Mary Barra said Monday during an Automotive Press Association meeting in Detroit. “We’ll adjust based on where the customer is and where demand is. It’s not going to be ‘if we build it they will come.’ We’re going to be led by the customer.”
Her comments come after GM President Mark Reuss told CNBC in August that he was “flexible” regarding hybrids as a way of meeting federal regulations.
“If it means we have to do that by law, then we have to do that by law,” he said. “If there’s regulations that get dealt on us, then we’re going to look at everything in our toolbox to meet them.”
Major auto companies, including the Detroit automakers, were counting on EVs to assist in offsetting the emissions and low fuel economies of larger SUVs and trucks that can cost them hundreds of millions of dollars in fines by the federal government.
GM and Stellantis were forced to pay a combined $363.8 million in penalties for failing to meet federal fuel-economy standards for cars and trucks they produced in previous years, according to information published by the National Highway Traffic Safety Administration in June.
Such fines would significantly increase under current proposals by the Biden administration to improve fuel efficiency of vehicles and move toward EVs, according to automaker lobbying groups.
The American Automotive Policy Council, a group representing the Detroit Three, earlier this year said the automakers would face more than $14 billion in noncompliance penalties between 2027 and 2032 barring significant changes to their fleets’ overall fuel efficiency. U.S. automakers have separately warned the fines would cost $6.5 billion for GM, $3 billion at Stellantis and $1 billion at Ford, according to Reuters.
NHTSA in July proposed boosting fuel efficiency requirements by 2% per year for passenger cars and 4% per year for pickup trucks and SUVs from 2027 through 2032, resulting in a fleetwide average fuel efficiency of 58 mpg.
With EVs playing a lesser role than anticipated to boost those fleetwide averages, hybrids could save automakers millions.
“Even without electric vehicles, there’s an expectation that electrification of an internal combustion engine is going to be necessary to meet regulations anyway,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility.
The resurgence of hybrids is especially important for Toyota. The world’s largest automaker is considered the pioneer of traditional hybrids, with the Prius.
The company ironically became a target of environmental groups last year for its strategy to move forward with a mix of hybrids, PHEVs and EVs, which critics viewed as a lack of commitment to an all-electric future.
Toyota’s argument at the time, and still, is that it’s meeting consumer needs and planning for a more gradual global adoption that will naturally include some markets shifting to EVs sooner than others.
The company further says it takes into account the entire environmental impact of producing EVs compared with hybrid electrified vehicles, arguing it can produce eight 40-mile plug-in hybrids for every one 320-mile battery electric vehicle and save up to eight times the carbon emitted into the atmosphere.
“People are finally seeing reality,” Toyota Chairman and former CEO Akio Toyoda, who has been heavily criticized for the slower approach on EVs, said in Octoberregarding EVs, according to The Wall Street Journal.
Toyota CEO Akio Toyoda speaks during a small media roundtable on Sept. 29, 2022 in Las Vegas.
Elon Musk, chief executive officer of Tesla Inc., during a fireside discussion on artificial intelligence risks with Rishi Sunak, UK prime minister, not pictured, in London, UK, on Thursday, Nov. 2, 2023.
Tolga Akmen | Bloomberg | Getty Images
Tesla faces a growing revolt in Scandinavia after Danish dockworkers joined a sympathy strike with Swedish mechanics, heaping pressure on the electric vehicle giant to grant collective bargaining rights to employees.
Members of Swedish trade union IF Metall have been at loggerheads with Tesla for six weeks, and have garnered support via a secondary strike action from fellow workers across a range of industries in Sweden, including postal workers, painters, dockworkers and electricians.
Tesla CEO Elon Musk bemoaned the blockage of license plate deliveries by postal workers as “insane” and late last month filed lawsuits against both the Swedish Transport Agency and the postal service.
After Swedish dockworkers blocked the reception of Tesla cars into the country, there had been speculation that the company would seek to deliver cars to Danish ports and transport them by truck across to Sweden.
However, IF Metall requested support from Denmark’s largest trade union, which on Tuesday announced a sympathy strike.
Jan Villadsen, chair of Denmark’s 3F Transport union, said Tuesday that IF Metall and Swedish workers are “fighting an incredibly important battle” and therefore have his union’s full support.
“Just like companies, the trade union movement is global in the fight to protect workers. With the sympathy strike, we are now stepping in to put further pressure on Tesla,” Villadsen said in a statement.
“Of course, we hope that they come to the negotiating table as soon as possible and sign a collective agreement.”
In what appeared to be a direct attack on Musk, Villadsen added that “even if you are one of the richest in the world, you can’t just make your own rules.”
“We have some labor market agreements in the Nordic region, and you have to comply with them if you want to run a business here,” he said.
“Solidarity is the cornerstone of the trade union movement and extends across national borders. Therefore, we are now taking the tools we have and using them to ensure collective agreements and fair working conditions.”
All members of 3F Transport are covered by the sympathy conflict, meaning that dockworkers and drivers will not receive and transport Tesla cars to Sweden.
Swedish labor relations, shaped by a series of accords reached throughout the 20th century, mean that almost all pay is subject to collective agreements between companies and labor unions, without any government intervention.
Tesla has so far refused to sign up to one of these collective bargaining agreements, leading around 120 mechanics in Sweden to launch a strike action in late October.
The striking workers are not asking for more pay, but simply for Tesla to honor the principle of collective bargaining. The dispute highlights the potential for an ongoing ideological stalemate not just between Tesla and 120 mechanics, but between U.S. corporate power and the deeply entrenched principles underpinning the Scandinavian economic model.
The extension of solidarity strikes to Denmark could signal further problems for Musk amid the risk of similar solidarity action in Norway and Germany, where collective agreements are also a key tenet of labor relations.
IF Metall told CNBC on Tuesday that it has no ongoing talks with Tesla but hopes the U.S. giant will “return to the negotiations table as soon as possible.”
“We are confident that they eventually will realize that collective agreement is beneficial for them as well. We are prepared for a prolonged conflict, but we are hoping for a swift solution,” the union said.
Stock futures pointed higher Friday as Wall Street returned for a
shortened trading session following the Thanksgiving holiday. Retailers will be in focus on Black Friday, which marks the unofficial start to the Christmas shopping season.
A recall on your vehicle can derail your travel plans, depending on the issue at hand.
It’s an issue plenty of drivers have to consider this fall. Subaru, Volkswagen, General Motors, Mercedes-Benz, Toyota and Honda Motor are among the vehicle manufacturers that have issued recall notices with the National Highway Traffic Safety Administration in November — collectively affecting more than 2.3 million vehicles.
Among those, Toyota recalled nearly 1.9 million RAV4s to fix a battery issue that could potentially cause a fire. Honda Motor issued a recall last week on nearly 250,000 Honda and Acura vehicles due to a manufacturing error that may cause engine damage.
Luckily, “recalls are covered repairs by the automaker at no cost to the consumer,” said Tom McParland, contributing writer for automotive website Jalopnik and operator of vehicle-buying service Automatch Consulting. If a driver’s vehicle was recalled, they should make an appointment at their local dealer for the repair.
Yet, as many Americans prepare to drive long distances to see family and loved ones for the holiday weekend, travel plans may need to change depending on the severity of a recall affecting your vehicle, experts say.
Sometimes the government can compel automakers to recall their vehicles, but these notices usually occur after multiple people report the same problem or the automaker finds a flaw in the manufacturing process after an investigation, said Brian Moody, executive editor for Kelley Blue Book.
“It’s common for there to be a recall when there haven’t been any incidents yet,” said Moody.
Once the recall notice is issued, the manufacturer will send out mailed notifications to drivers, but those can arrive weeks or months later.
For example, the NHTSA notices say owner notification letters for Honda’s Nov. 2 steering control recall are expected to be mailed Dec. 18. For the Nov. 16 recall on damaged engines, drivers should expect to receive a notification on Jan. 2, 2024.
If you hear about a recall in the news, it can help to call the dealer or the automaker’s customer service line to determine if your car is affected, experts say.
“It’s not always that a recall applies equally to every single version of a model that you have. There may be limitations,” Moody said.
As to whether or not travel plans should be altered, the decision will depend on the nature of the recall, said McParland.
“If the recall says possible transmission failure, that’s a lot more risky for long-distance travel versus a glitchy navigation system,” McParland said.
If you decide to rent a car instead of driving your own due to a recall notice, it’s unlikely to be reimbursed by the automaker.
“Usually rentals are not covered” as part of the recall repair, McParland said.
While some insurance policies may have a breakdown coverage and may provide rentals if the vehicle is in the shop for a major recall service, it is not the norm.
“It’s worth calling your carrier to ask,” added McParland.
It is more common for luxury automakers to provide their customers with loaner cars. Otherwise, it is up to the individual dealership or the manufacturer’s terms of sale, Moody said.
Here are three tips to help drivers navigate recalls:
1. Figure out if your car is affected
“There is a government database where folks can look up if their car is impacted by the recall,” McParland said. Drivers can put in their VIN into the NHTSA site. It will pull up all the recalls your car model has had, said Moody.
To see if the recall was already addressed, you can either check the government website or look through the manufacturer site, said Moody.
Drivers can also look into different online resources in addition to the government data, Moody said. Other website services can help you locate nearby repair shops and typical car issues your model may have.
If you receive a mailed notification from the manufacturer, follow the instructions and call your dealership as soon as you can.
2. Book an appointment ‘as soon as possible’
If your car is affected by a recall, “you want to make an appointment as soon as possible,” Moody said.
While the repair will be completed at no cost to the consumer, some dealers may have a backlog of appointments for a certain issue, said McParland. “An immediate repair may not be available,” he said.
3. Check if a mechanic is covered under the warranty
If you are facing a backlog of recall appointments at your local dealer and would opt to take the vehicle elsewhere for a faster service, ask the manufacturer first, said Moody. Contact customer service and explain your situation. The company may be able to cover the recall repair done by outside official channels, he said.
Otherwise, the rule of thumb for a recall is to take your vehicle to your local dealership of that automaker. There is a system in place where the manufacturer reimburses the local dealer and the service is free for the customer, Moody said.
Altogether, if you don’t know what the recall is for or don’t understand what the affected car part does, call your local dealer or manufacturer to ask, especially before you head out on a long trip.
“If you see something like ‘may lose control’, or ‘vehicle fire’ … maybe don’t drive until you find out for sure if the car is covered,” Moody said.
Ford chief executive Jim Farley is downsizing plans for a new low-cost battery cell plant in the automaker’s home state of Michigan amid a sharp slowdown slump in EV sales.
The market for electric vehicles is currently experiencing a “trough of disillusionment”, according to industry researchers at Cox Automotive, spurred in part by soaring borrowing costs that put the cost of an EV out of reach for many Americans.
In a statement on Tuesday, Ford said it would reduce the planned factory size by some 40% to around 20 gigawatt hours of annual cell capacity, roughly enough for 300,000 cars. Staffing would drop by a third to 1,700 jobs.
“We are right-sizing as we balance investment, growth and profitability,” Ford said, adding it remained bullish overall on its long-term strategy for EVs even if it was less ambitious in scope.
Previously Ford had targeted 35 GWh worth of cells per year built by a workforce of 2,500 people for the new factory in Marshall, located about 100 miles west of Detroit.
While it confirmed the start of production remained slated for 2026, it did not say whether spending would still amount to the previously guided $3.5 billion.
Marshall is slated to become Ford’s first battery manufacturing plant to produce lithium iron phosphate cells (LFP), a low-cost chemistry popular in China where EV prices favor affordability over range and performance.
Jaguar EVs aren’t moving.
At this pace they’re going to start giving them away.
Tesla employs this type of cell chemistry in its entry level Model 3 and Model Y vehicles, since the bulk of the cost of an EV come from purchasing battery-grade metals like nickel and cobalt. While heavy and therefore range-reducing, iron is a far more commonly found element that is cheap to procure and is more robust in terms of a battery’s fire safety.
Ford’s Mustang Mach-E among the slowest selling EVs
Ford, which is currently vying with GM’s Chevrolet for the honor of being a very distant second to Tesla in the U.S. market, has set a target of building EVs at a pace of 2 million units globally when annualized by late 2026.
Part of this includes a $5.8 billion investment Ford has earmarked for a Kentucky battery plant that will focus on cells using the more powerful but more expensive nickel cobalt manganese (NCM) chemistry found in most western EVs.
These investments were designed to finally make Ford more competitive to Tesla. Currently its 5.3% share of the EV market in the U.S. trails GM’s Chevy 5.7% through the first nine months of this year, data from Cox Automotive shows. By comparison, Tesla controls a 57% share.
But even before it is really picking up pace, Ford and other peers are already feeling a slowdown in demand after several years during which the high double-digit growth rate in EVs sales seemed to never end.
Inventories of finished electric vehicles have now become so bloated that it would take 88 days on average just to clear the existing supply, twice as long as last year, according to the head of AI car shopping app CoPilot. One of the slowest moving EV models in the U.S. is the Ford Mustang Mach-E, with 253 days supply. This compares to an average of 59 days for conventional gasoline-powered cars.
In October, Ford was forced to cut production of its F-150 Lightning electric pickup truck, the one model where it enjoyed the strongest pricing power thanks to having a leg up on Tesla in the segment. Musk’s Cybertruck however is only days away from its official launch at the end of this month.
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Elon Musk employed an aggressive strategy—including the threat of a “thermonuclear” lawsuit— to contain the fallout after his endorsement of anti-Semitic rhetoric on X that prompted an advertising backlash at the billionaire’s social media company and some on Wall Street to call for his censure.
Volkswagen’s ID.7 is set for release in Europe and China in the fall of 2023, and in North America in 2024.
CNBC | Evelyn Cheng
BEIJING — Chinese brands are taking the lead in the country’s rapid shift to new energy vehicles, putting Volkswagen on track for its smallest year of China sales since 2012, according to CNBC analysis of public data for the first three quarters of the year.
The German auto giant isn’t alone in its struggles, according to CNBC’s analysis of 10 global car brands.
Nissan is on track for its worst year in the market since 2009, while Hyundai is set for its lowest sales since at least that time, CNBC’s analysis showed.
The declines come as China has rapidly transitioned away from internal combustion engines to new energy vehicles. It’s a rapidly growing market of battery and hybrid-powered cars which Tesla and homegrown brands such as BYD have captured.
In China, the world’s largest auto market, new energy vehicles have accounted for more than one-third of new passenger cars sold in the country so far this year.
That’s according to the China Passenger Car Association, which also predicts the local auto market will grow by 20% in November from a year ago.
While Volkswagen remains by far a giant in China’s car market with around 3 million vehicles sold a year, the German brand hasn’t gained much traction in the electric car space. In July, the company opted to invest about $700 million into Chinese electric car start-up Xpeng to jointly develop two cars for China.
BYD is quickly catching up. The Shenzhen-based company sold more than 1 million cars for the first time in 2022 and is on track for 2.5 million vehicle sales in China this year, CNBC found.
Toyota, which has struggled in the market transition to electric cars, is set for its worst year of overall China sales since 2020 with about 1.8 million vehicle sales, CNBC found.
The Chinese automotive industry is developing faster than the market’s growth rate, said Alvin Liu, an analyst at Canalys’ Shanghai office, responsible for global tracking and analysis of the new energy vehicle market.
He pointed out that at around 2 or 3 million in sales, BYD is set to capture a significant share of China’s 8.5 million-large new energy vehicle market. Liu also noted the potential for original equipment manufacturers, or OEMs, to compete via joint ventures with Chinese companies.
Foreign brands are becoming less popular with Chinese consumers as they consider electric cars. License plate restrictions in big cities such as Beijing incentivize locals to buy electric instead of traditional fuel-powered cars.
A Bernstein survey of more than 1,500 consumers in China in August and September found that BYD was the top brand that Chinese buyers of electric vehicles would consider. Tesla was next, followed by Nio.
When it came to preferences for the next car purchase, “except for Tesla, all foreign brands saw their brand traction scores declined year-on-year, of which Japanese brands’ (e.g. Toyota, Honda, Nissan) dropped most,” the report said.
“The younger population also saw declining interest in traditional non-German premium brands, and to a smaller degree, in German premium brands,” the report said.
The survey indicated some brand loyalty for German car brands. But not necessarily when it came to different sources of energy.
“Tesla is more attractive to current German and other premium brands’ owners as they make their switch to EVs,” the Bernstein report said.
Although China’s new energy market is growing quickly, competition is fierce, even for domestic brands.
BYD in July launched its most direct competitor to Tesla yet, the Denza N7, while also expanding beyond mass market cars into ultra-luxury with a 1 million yuan-plus (more than $138,000) price tag for a giant U8 SUV under its Yangwang brand.
“If this year was competitive, next year will be even more competitive,” An Conghui, head of Geely’s EV brand Zeekr, told reporters on Oct. 27 in Mandarin, translated by CNBC.
He was speaking after Zeekr’s launch of its luxury electric sports car, the 001 FR, with specs clearly meant to rival Tesla’s Model S Plaid — at a lower price.
An claimed that no car company would be able to replicate the 001 FR within five years.
Zeekr, which set a monthly delivery record in October with just over 13,000 cars in China, has aggressive expansion plans to sell in Europe and the Middle East in the next two years.
BYD and other brands are also selling electric cars overseas.
This year, China is on track to become the world’s biggest exporter of cars, surpassing Japan and Germany, Moody’s analysis said in August.
In a sign of how big a force Chinese automakers are becoming abroad, the European Union in September launched an anti-subsidy probe into Chinese electric vehicle companies.
— CNBC’s Michael Bloom contributed to this report.
Tesla Chief Executive Officer Elon Musk gets in a Tesla car as he leaves a hotel in Beijing, China May 31, 2023.
Tingshu Wang | Reuters
Tesla shares closed down about 5% on Thursday at $209.98 after HSBC Global initiated coverage with a “reduce” rating and a $146 price target. In their note, HSBC analysts called Elon Musk both an asset and a risk to Tesla, noting he is a “charismatic CEO with a cult-like following” who “feeds into the innovator narrative.”
The analysts also pointed to “hope” already baked into Tesla’s share price around the company’s many ambitious future tech projects, from its long-delayed driverless systems to humanoid robots and supercomputers. “Arguably the ideas need to become reality to support the current share price,” the analysts said.
“Tesla is more than a very expensive auto company,” the analysts wrote at the beginning of the note. “Its ambition is to be an innovator, which underpins the valuation.”
On the bearish side, HSBC analysts wrote, “Significant delays or developments that show lack of technological and/or regulatory feasibility for a commercial launch of these projects pose a significant risk for Tesla.”
On the more bullish side, HSBC analysts said Tesla’s core automotive business “faces fewer challenges than the incumbents and as such, deserves a premium.” They said, “EVs, by virtue of rising penetration, are a growth market and are likely to be for decades. Tesla is already the cost leader and given its stated ambitions (and scale), is likely to remain so.”
Also on the bullish side for Tesla, they said, “A faster than expected development” in these areas “could lead to a re-rating of Tesla multiples,” as could “higher than expected market share gains driven by the price cuts we expect” in Tesla’s core electric vehicle business.
Besides the “reduce” rating from HSBC, Tesla is also facing a widening strike in Sweden.
Swedish unions are pressuring Tesla with strikes and blockades over the company’s refusal so far to sign a collective bargaining agreement with employees in its service division, including technicians and mechanics who repair and maintain customers’ cars.
The IF Metall trade union, which represents some Tesla service employees, began a strike action at 12 Tesla service centers on Oct. 27, The New York Times reported. Dockworkers who are members of the Swedish Transport Workers Union have said they will not unload Teslas at ports in the region if the EV maker fails to negotiate a labor agreement by Nov. 17. Electrical workers who maintain the company’s charging stations, among other things, have also promised to strike starting Nov. 17 if no agreement is reached.
The labor action could potentially spread to Norway, according to reports by The New Republic.
Meanwhile, on Thursday, President Joe Biden spoke to UAW workers in Illinois, where he voiced support for the union leader’s ambition to strike collective agreements with Tesla, Toyota and others.
UAW President Shawn Fain said in October during an online broadcast, “When we return to the bargaining table in 2028, it won’t just be with the ‘Big Three,’ but with the big five or big six.”
Tesla is expected to host a Cybertruck event at the end of this month. While the specs and pricing for the final version of the Cybertruck have yet to be revealed, Tesla has allowed some Cybertrucks to be trotted around to promotional events. Auto critics including hobbyists and professionals have panned their build quality and design this week, The Autopian reported.
People attend a launch ceremony of Inceptio’s autonomous driving system on March 10, 2021 in Shanghai, China.
Huanqiu.com | Visual China Group | Getty Images
BEIJING — China’s truck industry is finding more reasons to buy vehicles with assisted-driving technology.
It’s a critical step toward monetization in a nascent business that’s drawn many investor dollars, with relatively little to show for it so far.
One broad transformation is that the trucking industry in China is changing from one in which individual drivers dominated, to one with fleets holding the majority share, said Gui Lingfeng, principal at Kearney Strategy Consultants.
He pointed out that five years ago, fleet operators only had about 20% of the Chinese trucking market. Today it’s at 36%, and projected to reach 75% in 2025, he said.
The companies trying to sell trucks to fleet operators are including driver-assist tech as a way to make the vehicles more attractive, Gui said.
That early tech integration gives truck manufacturers an edge on the amount of data they can collect — for training autonomous driving algorithms, he said.
In addition, Chinese authorities require all newly manufactured trucks since 2022 to come with basic driver-assist tech for warning against forward collision and lane departure, Gui said.
Chinese driver-assist trucking startup Inceptio claims it already has more than 650 trucks operating in China — mostly for logistics customers — and covered more than 50 million kilometers (31 million miles) in commercial operations.
“The economy is getting tighter so the cost saving motivation is getting stronger not weaker that makes our customers more anxious to use our products
Inceptio develops the driver-assist tech system, and works with original equipment manufacturers (OEMs) for mass production.
“In terms of customers, there is a sort of a counter-cyclical effect,” Inceptio CEO Julian Ma said in an interview in late August. “The economy is getting tighter so the cost saving motivation is getting stronger, not weaker — that makes our customers more anxious to use our products.”
China’s logistics companies have seen enormous growth over the last several years, thanks to the rise of e-commerce. That’s led to price wars, amid slowing slowing economic growth.
Industry giant SF Holdings reported a 5.1% drop in operating revenue to 189 billion yuan ($25.97 billion) in the first three quarters of the year, including a 6.4% year-on-year decline in the third quarter alone.
But vehicle upgrade cycles can support continued truck sales.
Truck operators typically replace the vehicles every four to five years, Ma said. “In China there are around 7 million heavy duty trucks. Even if the market has zero growth, on the yearly basis there is between 1.2 to 1.5 million new sales.”
The startup claims its trucks cost about 5% less than traditional options, on top of safety and environmental benefits.
Read more about electric vehicles, batteries and chips from CNBC Pro
Already, an average of around 95% or more of a thousand-kilometer truck drive is handled by the computer, meaning the driver is mostly in standby mode, Ma said. “So the workload is much reduced.”
Ma said Inceptio’s focus over the next three years is on cost-sensitive customers, such as in logistics. He expects driver-assist features will dominate for the next few years, with 2028 the most optimistic scenario for the commercial deployment of fully driverless trucks.
Being able to remove drivers completely will result in the most cost savings for truck operators.
Other startups are testing out different forms of driver-assist trucks in China.
Kargobot, backed by ride-hailing giant Didi, operates more than 100 autonomous-driving trucks between Tianjin, near Beijing, and the northern province of Inner Mongolia.
Many of those trucks operate via what’s called platooning — having a human driver sit in the front vehicle and having two or three trucks follow behind in fully self-driving mode, with no human staffer inside.
Kargobot CEO Junqing Wei envisions that in the next decade or two, a network of hubs on the edge of cities, connected by highways on which self-driving trucks transport products. That’s according to his remarks in October at CNBC’s East Tech West conference in the Nansha district of Guangzhou, China.
Analysts at Yole Intelligence are closely watching whether robotruck companies can make good on production and delivery goals set for the next two years.
It’s a $2 trillion market, of which China accounts for about $650 billion to $750 billion and the U.S. slightly more than that, said Hugo Antoine, technology and market analyst, computing and software, at Yole Intelligence, which is part of Yole Group.
“This is the reason why we have many investors invest in this market,” he said. “Because if you have one percent or two percent of this market it is huge.”
However, it remains unclear how quickly regulators will allow fully driverless trucks on most roads, even if operators want to buy them.
“Even when the industry is technically ready, I think in any part of this world the transportation regulator will take another year or even two years, to validate the data and have their own testing before they can issue the driverless license,” Inceptio’s Ma said.
Ram is making the biggest changes in its lineup history. The sixth-generation Ram 1500 will go on sale next year as a 2025 model year truck and feature no V8 or diesel engines, but will have a battery-electric model with a range extender.
Electric power without range anxiety
Ram will be the first automaker to offer an electric truck with a range extender. This powertrain set up sees a battery and engine work together to continously charge the battery, allowing owners to have access to far more range than they would typically get from a battery-electric truck. It will be called the Ram 1500 Ramcharger.
This model is not to be confused with the Ram REV all-electric truck, which will come with electric motors and battery like a Ford F-150 Lightning, competing directly with it and the forthcoming Chevrolet Silverado EV and GMC Sierra EV.
“I would call this the ultimate battery electric vehicle. Think about the business side of that: a 92-kilowatt-hour battery that never worries about range or towing. It functions as a pure battery-electric truck, with all the instantaneous torque, all the power, but without any of the downsides,” said Tim Kuniskis, head of the Ram brand.
“I think it becomes obvious to a customer because there’s so many advantages to a battery electric vehicle. But there are certain things that are slowing people down. And if I can say the things that are slowing you down are charge time and range anxiety and infrastructure, you don’t have to worry about it with this.”
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The 2025 Ram 1500 adds a Tungsten trim to the top of the lineup. Stellantis
Ram says the combination powertrain in the Ramcharger will deliver 663 horsepower (hp) and 615 pound-feet (lb-ft) of torque with a tow rating up to 14,000 pounds. It thinks this is the bridge truck buyers need to ease into electric vehicle ownership.
“It’s an electric vehicle because the power is flowing from the battery, or the 130-kilowatt generator through electric drive modules. There’s no connection between this generator assembly and the wheels like one might find in even a plug-in hybrid. All the propulsion is electrical,” Doug Killian, Ram chief engineer said at the launch event.
The generator is powered by a 3.6-liter V6, known as the Pentastar engine, which parent brand Stellantis has been putting in everything from Jeep to Dodge since its inception in 2010.
Ramcharger will offer owners 145 miles of all-electric power, with a total range of 690 miles when the battery and engine team up. This is designed to help alleviate some of the consumer anxiety surrounding towing with electric vehicle power.
The 2025 Ram 1500 RamCharger has an all-electric range of 145 miles. Stellantis
The truck’s liquid-cooled battery pack is positioned under the floor in the center of the truck.
The 400-volt electrical system works with DC fast charging stations to add 50 miles of all-electric range in approximately 10 minutes.
Heavy-duty presence of a light-duty truck
Ram designers said they had three main pillars of upgrades in mind for the next generation of its 1500 pickup truck.
“The first was to increase and amplify the heroic presence that the Ram has been known for. So what we wanted to do was bring a measure of the heavy-duty presence into the light duty space with this truck. We also wanted to increase the visual modularity of the trucks through the use of technology. So on the exterior we do that we do that typically through lighting technology,” said Jeffrey Ross, chief exterior designer for the Ram truck brand.
“As designers we know that lighting technology and lit signature elements are very powerful ways to telegraph brand identity and brand equity, really making the trucks recognizable as Ram products. And thirdly, we wanted to amplify the most no-compromise, upscale, aspirational luxury truck in the market,” he said.
The 2025 Ram 1500 RamCharger offers an illuminated Ram badge. Stellantis
The new look encompasses a fresh fascia, with different styling cues for different Ram models, along with a new logo treatment and new rear end. The Ram insignia is bigger on all models than in the previous generation, and offered with illumination on the Ramcharger. Ram says this truck is more aerodynamic than its predecessors.
A new ultra-premium Tungsten model joins the 2025 Ram 1500 lineup that also includes Tradesman, Big Horn/Lone Star, Laramie, Rebel, Limited Longhorn and Limited grades.
In addition to the Ramcharger’s powertrain, Ram will offer the Pentastar V6 as a standalone engine option. Buyers can also opt for a 3.0-liter Hurricane engine that’s rated at 420 hp and 469 lb-ft. of torque or the new High Output Hurricane that’s rated at 540 hp and 521 lb-ft. of torque.
The high-output pickup comes with a maximum towing capacity of 11,580 pounds, a maximum payload of 2,300 pounds and up to 24-inches of water fording.
The 2025 Ram 1500 RamCharger comes with screens for both driver and passenger. Stellantis
The cabin features a familiar layout with added luxury touches. Ram will offer new 24-way adjustable, massaging seats as well as the Uconnect 5 infotainment system with a new 14.5-inch touchscreen, 12.3-inch digital instrument cluster and a segment-first 10.25-inch passenger screen.
The passenger screen is shuttered so the driver can’t see what’s playing. This is similar to how similar technology is presented in the Mercedes-Benz E-Class and in the Grand Wagoneer.
A digital rearview mirror, head-up display (HUD) and a Klipsch Reference Premiere audio system are also available.
Pricing and fuel efficiency numbers for the new-generation Ram 1500 are expected to be revealed closer to the truck’s on sale date.
Deliveries of the 2025 Ram 1500 will begin in the first quarter of 2024.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
