Tag: Autos

UAW strike brings blue-collar vs. billionaire battle to Detroit

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DETROIT — The United Auto Workers strike is bringing a blue-collar versus billionaire battle to the Motor City, just as UAW President Shawn Fain wanted.

The outspoken union leader has weaponized striking — historically a last resort for the union — after less than 24 hours into a work stoppage arguably better than any UAW president has in modern times.

It wasn’t by accident.

Fain, a quirky yet emboldened leader, has meticulously brought the UAW back into the national spotlight after decades of near irrelevance. He wants to represent not just union members but also America’s embattled middle class, which UAW helped create.

United Auto Workers union President Shawn Fain joins UAW members who are on a strike, on the picket line at the Ford Michigan Assembly Plant in Wayne, Michigan, September 15, 2023.

Rebecca Cook | Reuters

To do so, he has leveraged a yearslong national labor movement and a growing disgust for wealthy individuals and corporations among many Americans — starting with his first time addressing the union’s more than 400,000 members during his inauguration speech in March.

“We’re here to come together to ready ourselves for the war against our only one and only true enemy, multibillion-dollar corporations and employers who refuse to give our members their fair share,” Fain said at the time. “It’s a new day in the UAW.”

Fain’s comments Friday morning as he joined UAW members and supporters picketing outside a Ford plant in Michigan — one of three facilities the company is currently striking — echoed everything he said during that first speech.

“We got to do what we got to do to get our share of economic and social justice in this strike,” Fain said outside the Ford Bronco SUV and Ranger pickup plant. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”

Fain’s upbringing plays into his strong unionism and religious beliefs, which he has growingly talked about with members as he emphasizes “faith” in the UAW’s cause. Two of his grandparents were UAW GM retirees, and one grandfather started at Chrysler in 1937, the year the workers joined the union. Fain, who joined the UAW in 1994, even keeps one of his grandfather’s pay stubs in his wallet as “a reminder” of where he came from.

National media and others really started paying attention to Fain when he said the union would withhold a reelection endorsement of President Joe Biden, who has called himself the “most pro-union president in history.” Fain and Biden have spoken and met, but the union leader has not shown much support for the president. In response to comments by the president Friday, Fain said: “Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”

While many past union leaders have talked such talk, Fain has thus far delivered on his promises to members without batting an eye — causing General Motors, Ford Motor and Stellantis to go into crisis mode this week as the UAW follows through on that promise to members.

“We’ve never seen anything like this; it’s frustrating,” Ford CEO Jim Farley told CNBC’s Phil LeBeau Thursday as he criticized Fain and the union for what he said was a lack of communication and counteroffers. “I don’t know what Shawn Fain is doing, but he’s not negotiating this contract with us, as it expires.”

In a statement Friday, Ford said that the UAW’s partial strike at its Michigan Assembly Plant has forced it to lay off about 600 workers.

“This is not a lockout,” Ford said. “This layoff is a consequence of the strike at Michigan Assembly Plant’s final assembly and paint departments, because the components built by these 600 employees use materials that must be e-coated for protection. E-coating is completed in the paint department, which is on strike.”

GM CEO Mary Barra echoed Farley’s feelings Friday morning on CNBC’s “Squawk Box.”

“I’m extremely frustrated and disappointed,” she said. “We don’t need to be on strike right now.”

Both CEOs said everything they could to indicate they believe Fain may not be bargaining in good faith without using those exact words, which could justify a complaint with the National Labor Relations Board.

The UAW in late August filed unfair labor practice charges against GM and Stellantis with the NLRB, alleging they did not bargain with the union in good faith or a timely manner. It did not file a complaint against Ford. GM and Stellantis have denied those allegations.

Several past union leaders and company bargainers who spoke to CNBC hailed the way Fain has been able to propel the UAW into the national spotlight, including pausing bargaining for a Friday rally and march with Sen. Bernie Sanders, the progressive lawmaker from Vermont. Sanders, whose surprise 2016 Democratic presidential primary win in Michigan helped cement his national prominence, has lent support to numerous labor movements around the country as he rails against the billionaire class.

“I think they’re just doing an outstanding job,” said respected former UAW President Bob King, who cited growing support for the union among the public and the union’s own members. “Both those measurements say that UAW communications has been outstanding.”

UAW members have taken notice — especially after many of them disdained union leadership during and after a yearslong federal corruption investigation that landed two past UAW presidents and more than a dozen others in prison.

“For all the years that I’ve worked here, it’s never been this strong,” said Anthony Dobbins, a 27-year autoworker, early Friday morning while picketing the Ford plant in Michigan. “This is going to make history right here because we are trying to get what we deserve.”

Dobbins, a UAW Local 600 union representative, balked at current record offers by the automakers that have included roughly 20% pay increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.

“That’s not working for us. Give us what we asked for,” Dobbins said. “That’s what we want. We have to work seven days, overtime, just to make ends meet.”

United Auto Workers President Shawn Fain, center, poses with Anthony Dobbins, right, a 27-year autoworker, and others as the union pickets a Ford plant in Wayne, Michigan, Sept. 15, 2023.

Michael Wayland / CNBC

Key demands from the union have included 40% hourly pay increases; a reduced, 32-hour, workweek; a shift back to traditional pensions; the elimination of compensation tiers; and a restoration of cost-of-living adjustments. Other items on the table include enhanced retiree benefits and better vacation and family leave benefits.

Automakers have argued such demands would cripple the companies. Farley even said the company would have “gone bankrupt by now” under the union’s current proposals and members would not have benefited from $75,000 in average profit-sharing over the last decade.

Ford sources said the automaker would have lost $14.4 billion over the last four years if the current demands had been in effect, instead of recording nearly $30 billion in profits.

Such profits are exactly what Fain has said UAW members deserve to share in. But his strategy to get workers a larger piece of the pie carries great risks.

“This is not going to be positive from an industry perspective or for GM,” Barra said Friday.

Many outside the union believe if Fain pushes too hard, it could lead to long-term job losses for the union. A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed the companies cut union jobs through product allocation, plant closures or other means to offset increased labor costs.

“They’re going to have to pay up. The question is how much,” said the longtime bargainer, who agreed to speak on the condition of anonymity. “This ends up with fewer jobs. That’s how the automakers cut costs.”

Fain and other union leaders have argued that meeting the companies in the middle has led to dozens of plant closures, fewer union members and a growing divide between blue-collar workers and the wealthy.

So why not fight?

“This is about us doing what we got to do to take care of the working class,” Fain said Friday. “This isn’t just about the UAW. This is about working people everywhere in this country. No matter what you do for a living, you deserve your fair share of equity.”

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September 15, 2023
CNBC Daily Open: Arm’s surge lends helping hand to banks

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Arm Holdings CEO Rene Haas poses for a photo with members of leadership before the Nasdaq opening bell at the Nasdaq MarketSite on September 14, 2023 in New York City.

Michael M. Santiago | Getty Images News | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

The long reach of Arm
Arm shares surged almost 25% on its first day of trading on New York’s Nasdaq, and a further 6.8% in extended trading. The chip designer priced its shares at $51 a piece in its initial public offering. Shares of Arm began trading at $56.10 a share and ended the day at $63.59. That gives the company a fully diluted market cap of about $68 billion, and a price-to-earnings multiple higher than Nvidia’s.

Markets rebound
U.S. stocks rose Thursday, aided by Arm’s electrifying showing and promising economic data from the U.S. The Dow Jones Industrial Average, in particular, rallied 0.96% for its best day since August. Asia-Pacific markets rose Friday, cheered by China’s better-than-expected data. Japan’s Topix gained 1.25% to hit a 33-year high, as Softbank jumped around 2.7% after Arm’s impressive showing.

China’s economy picks up
Finally, some positive economic data from China. Retail sales in August grew 4.6% from a year ago, beating expectations for 3% growth. Industrial production rose 4.5%, also surpassing the forecast of 3.9%. However, fixed asset investment was still weighed down by the real estate sector, and came in at 3.2%, slightly below the expected growth of 3.3%.

Screeching to a halt
Thousands of members of the United Auto Workers went on strike after the union failed to reach a deal with General Motors, Ford Motor and Stellantis. Workers at three key U.S. assembly plants plan to cease work from Friday — those plants were targeted because they produce highly profitable vehicles that are still in high demand.

[PRO] Cash or stocks?
In recent weeks, U.S. Treasury yields have risen to their highest levels in decades. Meanwhile, major indexes lost ground in August. That has boosted the attractiveness of keeping cash holdings as opposed to investing in stocks. But will that trend hold true for the rest of the year? Analysts from big banks weigh in on the debate between cash and stocks.

The bottom line

When you have a toothache, your whole body feels the pain. In the same vein, when Arm experienced a flush of wellbeing, it radiated through markets’ entire body, giving them their best day in weeks.

“The successful IPO of Arm … instills some confidence that perhaps the capital markets window is going to open again after virtually being closed for the last 18 months,” said Art Hogan, chief market strategist at B. Riley Financial.

Big banks rallied on excitement that the sleepy IPO market for tech companies might finally be stirring. (More IPOs means more dealmaking — and higher revenue — for banks.) Shares of JPMorgan Chase rose almost 2%, Morgan Stanley gained 2.09% and Goldman Sachs popped 2.86%. Tech IPOs are particularly important to Goldman as the bank relies on investment banking more than its rivals. With Instacart and marketing firm Klaviyo set to list soon, Goldman — which has been struggling of late — might see a change in its fortunes.

Goldman and JPMorgan are big components of the Dow. That helped the blue-chip index rise 0.96%, its best day since Aug. 7, giving it a closing level above its 50-day moving average for the first time since Sept. 1. The S&P 500 advanced 0.84%, its best showing in around two weeks, and the Nasdaq Composite gained 0.81%.

Meanwhile, a tame core PPI reading for August assuaged worries after core consumer price index was higher than expected. But because CPI is a lagging indicator, while PPI is considered a leading indicator — that is, it predicts the future state of the economy — markets found solace in the idea that things aren’t as bad as consumer inflation appeared to portray.

And August retail sales jumped 0.6% against the 0.1% expected. Taken together with the PPI report, that suggests the U.S. economy, supported by an indefatigable consumer, might skirt a recession even as inflation gradually cools.

“You’ve got the perfect framework of inflation heading in the right direction, but the economy not falling apart,” Hogan said. “And that really paints the picture that the Fed has done the right thing and we may well be orchestrating that elusive soft landing.”

But the economy is infamously volatile. Hence Hogan’s all-important caveat: “At least that’s the impression we get this week.” Still, after markets ended in the red last week, any reprieve, however temporary, will be welcome.

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September 14, 2023
UAW members go on strike at three key auto plants after deal deadline passes

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Members of the United Auto Workers union hold a rally and practice picket near a Stellantis plant in Detroit, Aug. 23, 2023.

Michael Wayland / CNBC

DETROIT – Thousands of members of the United Auto Workers went on strike at three U.S. assembly plants of General Motors, Ford Motor and Stellantis, after the union and the automakers failed to reach a deal on a new labor contract Thursday night.

“The UAW Stand Up Strike begins at all three of the Big Three,” the union said in a post on X, the site formerly known as Twitter, just after midnight Friday.

The facilities are GM’s midsize truck and full-size van plant in Wentzville, Missouri; Ford’s Ranger midsize pickup and Bronco SUV plant in Wayne, Michigan; and Stellantis’ Jeep Wrangler and Gladiator plant in Toledo, Ohio. For Ford, UAW President Shawn Fain said only workers in paint and final assembly will be on strike.

“We got to do what we got to do to get our share of economic and social justice in this this strike,” Fain said outside the Ford facility in Wayne, minutes after the strike began. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”

The selected plants produce highly profitable vehicles for the automakers that largely continue to be in high-demand. About 12,700 workers – 5,800 at Stellantis, 3,600 at GM and 3,300 at Ford – will be on strike at the plants in total, the union said. The UAW represents about 146,000 workers across Ford, GM and Stellantis.

UAW President Shawn Fain, center, talks to reporters as union members strike outside a Ford plant in Wayne, Michigan, Sept. 15, 2023.

CNBC | Michael Wayland

“If they come to the pump and they take care of their workers, we’ll be back to work,” Fain said early Friday, referring to the automakers. “But if they don’t, we’ll keep amping it up.”

The union selected the plants as part of targeted strike plans initially announced Wednesday night by Fain, who has unconventionally been negotiating with all three automakers at once and has been reluctant to compromise much on the union’s demands.

Read more: General Motors sweetens its offer to include 20% wage increase

“For the first time in our history, we will strike all three of the ‘Big Three’ at once,” Fain said just after 10 p.m. Thursday in live remarks streamed on Facebook and YouTube. “We are using a new strategy, the ‘stand-up’ strike. We will call on select facilities, locals or units to stand up and go on strike.”

Fain has referred to the union’s plans as a “stand-up strike,” a nod to historic “sit-down” strikes by the UAW in the 1930s.

Key proposals from the union have included 40% hourly pay increases, a reduced 32-hour work week, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments (COLA), among other items on the table including enhanced retiree benefits and enhanced vacation and family leave benefits.

By late Thursday, it was clear there wouldn’t be a deal, even as President Joe Biden got involved. The White House said Biden, who boasts of his blue collar background and support for organized labor, talked with Fain and the leaders of the Detroit automakers.

Ford, in a statement Thursday night, said the UAW presented its “first substantive counterproposal” to four of the company’s offers, but it “showed little movement from the union’s initial demands.”

“If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor,” Ford said. “The union made clear that unless we agreed to its unsustainable terms, it plans a work stoppage at 11:59 p.m. eastern.”

The automakers have made record proposals that address some of the UAW’s ambitious demands but not all of them. Specifically, the companies have offered wage increases of roughly 20%, COLA, altered profit-sharing bonuses; and enhanced vacation and family leave enhancements that the union has found inadequate.

Targeted strikes typically focus on key plants that can then cause other plants to cease production due to a lack of parts. They are not unprecedented, but the way Fain plans to conduct the work stoppages is not typical. They include initiating targeted strikes at select plants and then potentially increasing the number of strikes based on the status of the negotiations. Selecting assembly plants for such strikes is also unique.

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September 14, 2023
An Investor’s Guide to Navigating a UAW Strike

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The UAW could start soon, though it might not hurt the shares of GM and Ford.

Jeff Kowalsky/Bloomberg

The labor contract between the United Auto Workers and the Detroit-Three automakers expired at midnight on Thursday. A deal isn’t done and the union will …

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September 14, 2023
More companies, especially airlines, warn higher costs will eat into profits

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An American Airlines 787 is loaded with cargo at Philadelphia International Airport.

Leslie Josephs/CNBC

More companies are warning that a surge in the cost of fuel and employee pay hikes will eat into profits this quarter.

Companies from aerospace manufacturers to package delivery giant UPS are digesting big new labor deals. Meanwhile, unions from the auto industry to Hollywood are pushing for better compensation. Airlines, whose biggest expenses are jet fuel and labor, are getting hit particularly hard.

Delta Air Lines on Thursday cut its adjusted earnings forecast for the third quarter to between $1.85 and $2.05 a share, down from an earlier forecast of $2.20 to $2.50. Delta said it is paying more for fuel than it expected but said maintenance costs were also more than it anticipated.

U.S. jet fuel at major airports averaged $3.42 a gallon as of Tuesday, up 38% from two months ago, according to Airlines for America, an industry group.

On Wednesday, American Airlines trimmed its earnings forecast, following revisions at Alaska Airlines and Southwest Airlines. American expects to adjusted earnings per share of between 20 cents and 30 cents in the third quarter, down from a previous forecast of as much as 95 cents a share, citing more expensive fuel and a new pilot labor deal.

The company expects to recognize a $230 million expense for that new contract, which includes immediate 21% raises for pilots, and compensation increasing more than 46% over the duration of the four-year contract, including 401(k) contributions.

Elsewhere, labor unions from Detroit to Hollywood have pushed hard for raises, better benefits and schedules in new contracts. UPS and the Teamsters union representing about 340,000 workers at the package carrier in July reached a new labor deal that includes raises for both full- and part-time workers, and narrowly avoided a potential strike.

UPS workers ratified the agreement ratified last month. By the end of the five-year contract, a driver could make $170,000 in pay and benefits, the company said.

Earlier this week, the delivery giant outlined the costs associated with the deal and said it the expenses from it will increase at 3.3% compound annual growth rate over the next five years.

“Year one costs more than we originally forecast,” said Brian Newman, the company’s CFO, said on an investor call this week. He said it will cost $500 million more in the back half of 2023 than expected, he said.

As of midday Thursday, the United Auto Workers and Detroit automakers appeared far apart on labor talks for new labor deals, setting up “likely” strategic strikes at the companies after an 11:59 p.m. ET Thursday deadline, UAW President Shawn Fain said Wednesday night. The union has sought more than 30% hourly pay increases, a reduced 32-hour work week, and other improvements.

Other unions are also seeking higher compensation. The Hollywood writers and actors strikes began in May and mid-July, respectively, with members demanding better pay to match changing industry dynamics in the entertainment-streaming era.

American Airlines offered flight attendants 11% pay increases the date a new contract starts, and 2% raises after that. But the Association of Professional Flight Attendants said the union wants 35% increases at the start of a new deal, followed by 6% annual raises.

Unions have complained that workers didn’t get raises during high inflation in recent years since the Covid pandemic derailed talks.

Strong travel demand has helped the largest carriers more than cover their higher expenses. But some carriers are seeking cracks in sales just as a slower travel period after summer begins. Spirit Airlines on Wednesday said it expects a deeper loss than previously forecast and lower revenue.

Frontier Airlines warned Wednesday that “in recent weeks, sales have been trending below historical seasonality patterns,” and forecast an adjusted loss for the quarter.

– CNBC’s Michael Wayland and Gabriel Cortes contributed to this article.

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September 14, 2023
Seat massages, smartphones and driverless features: Automakers turn to tech to take on Tesla

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Amazon was among a number of technology companies at the IAA motor show in Munich. The presence of Amazon, Qualcomm, Samsung and other tech giants underscores how traditional automakers are looking to bolster the tech in their cars.

Arjun Kharpal | CNBC

MUNICH — You’d be forgiven for thinking that the IAA, one of the world’s biggest motor shows, is actually a technology conference, after tech giants like Amazon, Qualcomm and Samsung all showed up for this year’s event.

Their presence underscores demand for traditional automakers to boost the technology in their vehicles, from software to hardware, as they look to catch up with Tesla in the electric car future. Ramping up technology features is also essential to meet buyer expectations in China.

“Tesla and the Chinese start-ups. This is the two-way force they [traditional automakers] are experiencing, driving them to have more user experience in the car,” Mohit Sharma, automotive research analyst at CCS Insight, told CNBC.

They can’t do it alone. Carmakers are looking at tech firms for help, while also trying to work on items like software in house.

Part of Tesla’s global success has come down to its technology in a number of areas, from batteries to Autopilot — its advanced driver assistance system (ADAS), which uses semi-autonomous driving features. The screen within Tesla cars is also akin to that of a smartphone.

Those features are what rival automakers are trying to build and get ahead on.

Carmakers are developing their own operating systems

There are two major operating systems in the smartphone sphere — Google’s Android and Apple’s iOS. That’s not the case in the car world, when it comes to the ever popular infotainment systems and screens.

Auto firms are now focusing on developing their own operating systems, so that using car screens more closely resembles working with the apps of a smartphone.

To that end, Mercedes-Benz revealed further details at the IAA about its self-developed operating system called MB.OS, which will help power various features from the giant screen across the dashboard to the voice assistant in its upcoming EVs.

Swedish EV player Polestar this year created a joint venture with Xingji Meizu — a smartphone maker owned by Chinese auto giant Geely — and plans to launch its own smartphone in December, when the Polestar 4 car begins delivery to customers. Meizu is making an operating system for Polestar cars based on its own product, called FlyMe. The idea is that users would be able to have a seamless experience between the smartphone and Polestar’s operating system in the company’s cars.

U.S. chipmaker Qualcomm was also in attendance at IAA. The company is making a big push into the automotive space, where its chips can be used to help power artificial intelligence applications within vehicles. One example it showed was a car assistant that could find a recipe for chicken enchiladas and add the ingredients to a shopping list.

It’s not just about the screen — automakers are also looking into using all parts of the car to display information. BMW said the Neue Klasse EV models it unveiled on Saturday will have what it calls Panoramic Vision, a heads-up display which projects information on the windscreen at the driver’s eyeline.

To make the drive as comfortable as possible, U.S. EV maker Lucid showed off the massage feature of the seats in its Air Midnight Dream Edition car.

Driverless features push

A big part of the focus of Tesla technology has surrounded its Autopilot ADAS. No car can operate autonomously — at least from a legal perspective — but automakers are ramping up the driverless features and capabilities.

Tesla is perhaps one of the furthest ahead with its ADAS features, followed by young Chinese players like Xpeng and Nio.

Tech is key in China

Many automakers aspire to become major players in the world’s biggest and highly competitive electric vehicle market, China. In a bid to differentiate themselves from rivals, Chinese firms have talked up the tech features of their vehicles, from software to ADAS capabilities — and Chinese customers expect the latest tech perks.

“It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software,” Polestar CEO Thomas Ingenlath, told CNBC in an interview Tuesday.

Heeding that sentiment, foreign companies from BMW to Mercedes are looking to invest heavily in tech development, as they aim to boost EV sales in China.

Volkswagen CEO Oliver Blume on Wednesday said that the company is ramping up its number of software engineers in China.

“We want to operate with China speed in China,” Blume said at the IAA conference.

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September 10, 2023
Tesla rival Polestar plans own smartphone launch alongside its first electric vehicle in China

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A Polestar 4 electric SUV is on display during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai) on April 18, 2023 in Shanghai, China.

Vcg | Visual China Group | Getty Images

Launching smartphones with EVs

Meizu is not a major smartphone player in China with companies like Apple and Oppo among the biggest. And the Polestar smartphone would not be an attempt to grow market share.

Instead, the unusual step of an EV company launching a smartphone comes from a desire from automakers to make the car like a mobile phone on wheels.

“Where you have an opportunity to link these two worlds, without any border … then you can really have a seamless transition,” Ingenlath said.

You can imagine a world where you’re using an app on your phone and you enter the car and that same app is displayed on the car’s dashboard screen, for example.

“I still have problems to get, you know, an SMS displayed,” Ingenlath said of the frustrations with current technology.

Ingenlath added that the phone will be a “premium” device. Meizu is known in China for more mid-tier devices. This will help Meizu push into the high-end device market for handsets too, Ingenlath said.

While it is still unusual for car companies to launch phones, the idea is gaining some traction. Chinese EV start-up Nio plans to launch its first self-developed mobile phone in September.

There are lots of reasons this could make sense specifically in the world’s second largest economy.

It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software.

Thomas Ingenlath

CEO of Polestar

Firstly, there is no Google Android mobile operating system. This means that automakers can customize the operating system on their phone and the car to sync up. For example, Meizu has its own operating system called FlyMe. And the company is making an operating system for Polestar cars based on this.

The smartphone that Polestar releases is also likely to have a similar OS which will make integration seamless.

“It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software,” Ingenlath said.

“Many OEMs are following Geely and potentially other future players such as Apple if they come up with their own car with their smartphone to provide a holistic and tighter connected experience in every aspect of mobility,” Neil Shah, vice president of research at Counterpoint Research, told CNBC.

An OEM is an original equipment manufacturer and refers to car manufacturers.

Shah said the smartphone would also allow Polestar to bundle software, apps, services and features such as remotely controlling or turning on the car with a phone.

Launching a phone could also help carmakers learn more about their customers’ habits, Shah added.

Polestar 4 ‘more premium’ than Tesla’s Model Y

The Polestar 4 is on sale in China for 349,800 Chinese yuan ($47,890) — that’s more expensive than Tesla’s Model Y which starts at 263,900 yuan.

The Polestar 4 is being positioned as “more premium, more luxurious” than the Model Y, Ingenlath said.

The CEO said Polestar’s customers come from German carmakers BMW and Mercedes-Benz and that the car is being positioned more as a competitor to cars like the Porsche Macan.

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September 5, 2023
Chinese electric carmakers ramp up push overseas, setting up clash with U.S., European auto giants

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BYD launched the BYD Seal in Europe at the IAA auto show in Munich, Germany. The electric sedan has a starting price of 44,900 euros ($48,479).

Arjun Kharpal | CNBC

Munich, GERMANY — The IAA in Munich, Germany is one of Europe’s most high-profile auto shows. And it was dominated by Chinese electric car firms looking to expand their presence on the continent and challenge incumbents from BMW to Ford in the new era of battery-powered vehicles.

Chinese start-ups and players had some of the biggest stands at the event with high-profile press conferences and vehicle launches, underscoring their intention to make a splash in the European market.

China, the world’s largest EV market, has seen a tidal wave of electric car companies pop up in the last few years, driven by government subsidies and venture capital funding. But a slowing market at home, due to tepid consumer spending after Covid-19 restrictions were lifted, coupled with an attractive market in Europe, has seen Chinese firms launch cars abroad and expand their footprint.

“Europe is one of the largest (second after China) mass market vehicle markets … If the Chinese EV makers want to secure a growth path beyond their local market, its very logical to look at Europe,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC via email.

Roeska added that Europe, with its “stringent de-facto” ban on combustion engine cars in 2035, “is pushing the market faster towards EVs at a time when most EU brands … do not have a perfect offering yet, making market share gains easier.”

Many of the European carmakers have been seen lagging in their push into EVs at a time when Chinese players have launched dozens of new vehicles.

China makes mark in Munich

The ambitions of Chinese EV firms were on display at the IAA.

On the morning of the first day, Leapmotor, a Chinese firm headquartered in Hangzhou, announced plans to bring its C10 sports utility vehicle, or SUV, to European markets next year. In the next two years, the company said it plans to introduce five “globally-oriented” products across the world.

“All of Leapmotor’s subsequent products will be designed and developed with a global mindset and adhere to global standards,” Leapmotor CEO Zhu Jiangming said at a press conference on Monday.

Chinese EV maker Leapmotor launched its first car for the international markets called the C10.

Arjun Kharpal | CNBC

Meanwhile, BYD, the carmaker backed by Warren Buffett, launched its Seal electric sedan for Europe on Monday, starting at 44,900 euros ($48,479). For comparison, in Germany, Tesla’s Model 3, starts at 42,990 euros.

And there were more announcements about continued expansion into new territories.

Xpeng said Monday it will expand sales of its cars into the German market in 2024. The company currently sells its P7 sedan and G9 SUV in Norway, Sweden, Denmark and the Netherlands. And Brian Gu, president of Xpeng, said the company plans to bring its latest car, the G6, to Europe next year, underscoring the Guangzhou-headquartered firm’s global push.

“We recognise Germany is the most important and the highest standard market for all” carmakers, Gu told CNBC in an interview Monday.

“And to be able to be here and then really made our make our product available to the customers in this market, really will help us further penetrate the continental European market. We have ambitions for broader market coverage internationally.”

The entrance of Chinese firms into Europe is seen as a threat to big automakers who have been perceived to be moving too slow on EVs.

Analysts at Bernstein said in a note published in June that if Chinese carmakers enter the market “as per normal,” then incumbents may concede up to 5% market share by 2030. But these new entrants could grab up to 20% market share if their entrance into Europe is more aggressive than expected, they added.

Price war and rising competition

But the Chinese companies themselves face rising competition from within, but also outside of their home market. Tesla sparked a price war earlier this year which has put pressure on profits and margins of some of China’s smaller players like Xpeng.

Meanwhile, to fend of rising competition and catch up with Tesla, BMW and Mercedes both launched a dedicated electric car platform that will underpin their vehicles for the coming years, adding further potential headwinds that are not lost on these Chinese challengers.

“Well, it is definitely not easy,” Xpeng’s Gu said of the push from traditional carmakers into EVs.

“I think as a young company, we also are trying to learn from … each step that we take, as well as learn from the competition, the partners that we have. But we have confidence in our technology, we have confidence in our product,” Gu added.

Chinese automaker BYD had one of the biggest stands at the IAA show in Munich, Germany in 2023.

Arjun Kharpal | CNBC

Another challenge for the Chinese firms is building brand recognition, an exercise that could stretch marketing budgets and take a long time to do.

“Brand is a sizeable issue, but not insurmountable if they can invest for the long-term,” Peter Richardson, vice president at Counterpoint Technology Research, told CNBC via email.

Richardson said Korean firms Hyundai and Kia were “relatively unknown” in Europe 30 years ago, but “both brands have risen to be significant players.”

“It takes time and dedication,” Richardson added.

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September 4, 2023
Mercedes and BMW want to take on Tesla. Check out their new electric concept cars

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The Mercedes-Benz Concept CLA Class was unveiled at IAA Mobility 2023 in Munich, Germany. The platform will underpin the German automaker’s push into electric cars.

Mercedes-Benz

Mercedes-Benz and BMW took the wraps off electric concept cars as they look to catch up with Tesla in the premium end of the market.

At the IAA auto show in Munich, Mercedes showed off the Mercedes-Benz Concept CLA Class while BMW revealed the BMW Vision Neue Klasse.

These cars are built on an entirely new platforms from the German automakers that will underpin both their EV offerings for the coming years, in what has been their most aggressive push into battery-powered vehicles yet.

They are concept cars, so it’s unclear what their final form will look like when they’re eventually produced. But here’s a closer look at Mercedes and BMW’s offerings.

Mercedes-Benz Concept CLA Class

The Mercedes-Benz Concept CLA Class is built on the so-called Mercedes‑Benz Modular Architecture (MMA), a new platform designed by the German auto giant for electric cars.

The range will comprise a total of four new models — a four-door coupé, an estate and two sports utility vehicles.

Mercedes claims the car will have a range of 750 kilometres (466 miles) on a single charge. The company also claims that in just 15 minutes, the battery can be charged so the car can be driven 400 kilometers.

Mercedes touted the fast-charging capabilities and long-range batter of the Concept CLA Class.

Mercedes-Benz

Mercedes has placed a big focus on the interior and user experience. The company said it is developing its own operating system for the car called MB.OS. This will help power various features from the giant screen across the dashboard to the voice assistant within the car.

It will also allow third-party apps, such as your favorite music or video streaming apps, to be integrated with the vehicle.

“This proprietary chip-to-cloud architecture represents a completely new approach for the company and will be a largely hidden yet defining aspect of all its future vehicles,” Mercedes-Benz said in a press release.

Mercedes said it focused on digitizing the interior of the Concept CLA Class. This includes a virtual assistant and support for third-party apps.

Mercedes-Benz

Traditional automakers have been perceived as being behind Tesla on the software front. This is an attempt by Mercedes to show it is catching up.

BMW Vision Neue Klasse

The BMW Vision Neue Klasse is BMW’s answer to Tesla. It is also built on a new architecture that will underpin BMW’s future electric cars.

The first electric vehicles based on the Neue Klasse — or new class — architecture are set to enter production in 2025.

BMW revealed the BMW Vision Neue Klasse, a concept electric vehicle that will underpin its foray into battery-powered cars.

Arjun Kharpal | CNBC

The concept vehicle has a glass roof. BMW said the design of the car embody classic elements that fans know of the brand.

The BMW Vision Neue Klasse was unveiled at the IAA Mobility 2023 International Motor Show in Munich.

Arjun Kharpal | CNBC

BMW said the car will contain what it calls Panoramic Vision, a heads-up display which projects information on the windscreen at the eyeline of the driver.

The company said this will first be available in the Neue Klasse. Both passenger and driver will be able to interact with the Panoramic Vision feature, BMW said.

There were few details on range and charging. But BMW said the new generation of its technology will improve the charging speed of the Neue Klasse models by up to 30 percent, in addition to boosting their range by up to 30 percent.

BMW says the Vision Neue Klasse electric car has all the classic features the brand is known. BMW said the 21-inch aerodynamic wheels “pay tribute to the classic cross-spoke design inspired by motorsports.”

Arjun Kharpal | CNBC

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September 4, 2023
Mercedes to release a smaller version of its G Class luxury SUV

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The Mercedes-Benz G Class is a luxury SUV that has become popular in the U.S.

Scott Olson | Getty Images News | Getty Images

Mercedes plans to launch a smaller version of its high-end G Class sports utility vehicle, the German carmaker’s CEO told CNBC in an interview Sunday.

The G Class, a rugged off-road car which starts at just under $140,000, is popular with buyers in the U.S. It has been around for more than four decades. Mercedes has reinvented the model with more technology and even teased a concept electric version of the car.

Now Ola Kallenius, CEO of Mercedes, confirmed a “little G” is on the horizon, a smaller version of the G Class.

“So kind of the daughter or son of the big G is also going to come to G fans around the world in a few years from now,” Kallenius told CNBC’s Annette Weisbach.

The CEO said there is no “definitive date” for when this model will be launched.

“If you’re waiting for something good it will be worth the wait,” he said.

A smaller version of the G Class could open the model up to a different group of buyers and potentially at a different price point in the luxury SUV segment against rivals including the Range Rover and Bentley Bentayga.

The G Class is known for being difficult to get your hands on, with Mercedes controlling the supply of the luxury off-road car.

Kallenius said the tight supply is likely to continue.

“The G Class is an icon, it is difficult to get one. If you do get one you feel like it’s almost like your birthday and we will be very very careful managing volume with the G Class,” he said.

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September 3, 2023
BMW unveils Vision Neue Klasse concept car as it touts the dawn of a new EV era

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German automaker BMW on Saturday launched a hotly anticipated electric concept car, saying the so-called “Vision Neue Klasse” represents the dawn of a new era for the company.

BMW’s latest design showcases a platform that will underpin the brand’s next generation of electric vehicles. The first electric vehicles based on the Neue Klasse — or new class — architecture are set to enter production in 2025.

The new line-up of electric vehicles includes BMW’s sixth generation of battery cells, which the company says will improve both the charging speed and range of the Neue Klasse platform by up to 30%. As a result of these measures, BMW said the overall vehicle efficiency would increase by up to 25%.

“With the BMW Vision Neue Klasse, we put every innovative force that BMW has on the electric side, on the digital side and, of course, that car will also be prepared for the industry of circularity,” BMW CEO Oliver Zipse told CNBC’s Arabile Gumede.

“In only two years’ time, these cars will hit the road, and with that, overall, we lead BMW to a new era of innovation and sustainability. That’s the purpose of our show at the IAA,” Zipse said.

The Vision Neue Klasse is set to make its public debut in the coming days at the IAA motor show in Munich, which also serves as the headquarters of BMW. The IAA show is one of the world’s largest mobility trade fairs.

“We believe that electromobility will be the largest growth segment in the world for the automotive industry and we want to be a leading force here,” Zipse said.

An employee checks the logo of a car during its final inspection on a production line at Germany’s carmaker BMW plant in Leipzig, eastern Germany, on October 20, 2022.

Ronny Hartmann | Afp | Getty Images

The BMW chief executive projected that battery electric vehicles will represent 15% of the carmaker’s worldwide sales by the end of 2023 and that “we will increase that further next year and the year after next.”

Frank Weber, member of the Board of Management of BMW responsible for development, said the Neue Klasse range represents a “major technological leap” for the carmaker.

‘Not afraid at all’ of Chinese EV giants

In early August, BMW said that it expected ongoing challenges from supply chain issues and stubbornly high inflation to persist over the coming months. It nevertheless lifted the annual outlook for its margin on earnings before interest and taxes in the automotive segment.

Shares of BMW are up around 13% year-to-date.

Asked about the presence of Chinese electric vehicle giants at the Munich motor show and whether he was worried about Chinese exports into Europe impacting BMW’s business, Zipse replied, “No, we are not afraid at all.”

“That is a sign of attractiveness when global players like the Chinese, which is the largest car market in the world, come here to Munich and showcase what they want. It is far more than auto, this is a tech show, this is an innovation show,” Zipse said.

“And I think to have everyone here, the Americans, the Europeans and now also the Chinese, is super exciting. You hear it in my words already, I’m more excited, and I’m not afraid at all, and it is good that we have a show which attracts a lot of competition. That’s super.”

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September 2, 2023
Tesla shares close down 5% after price cuts, Model 3 refresh

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A Tesla Model 3 vehicle on an auto carrier in front of a store in Rocklin, California, July 21, 2021.

David Paul Morris | Bloomberg | Getty Images

Tesla shares dropped 5% Friday after the electric car company cut prices on some models in the U.S. and reduced the price for its premium driver assistance software.

The stock closed at $245.01. It’s still up almost 100% this year after gaining 2.7% for the week.

While Tesla CEO Elon Musk has said in the past that the price of Tesla’s premium driver assistance option, marketed as Full Self-Driving software, would only ever go up, the company cut the price by $3,000 from $15,000 in the U.S. for customers who purchase it upfront rather than through a monthly subscription. Subscribers pay between $99 and $199 per month, depending on whether they’re upgrading from a standard or other premium version.

Tesla is also cutting prices for inventory vehicles in the U.S., including its entry-level Model 3 sedan, luxury Model S sedan and the Model X SUV. In China, Tesla is reducing the price of the Model S and Model X about 7%.

The FSD discount follows reports that the National Highway Traffic Safety Administration is nearing completion of a years-long investigation into possible safety defects of Tesla’s driver assistance systems. The investigation began after a string of crashes into stationary first responder vehicles by Tesla drivers who were thought to be using driver assistance features.

The price cut for some Model X cars in the U.S. makes the SUV eligible for a $7,500 tax break for qualified buyers. However, the price cuts on Model S and X upset some prior customers in the U.S. and in China, who took to social media to complain that the lower price hurts the resale value of their cars and that they’re paying higher insurance costs because their car was more expensive.

Meanwhile, Tesla’s Model 3 refresh, officially revealed Friday, included controversial changes, such as a “stalkless” turn signal. Drivers of the redesigned Model 3 in China and the EU will need to touch a button on the steering wheel to indicate they’re about to change lanes or turn, and can use park, reverse, neutral and drive controls on the touchscreen in lieu of the left-side stalk. The base Model 3 refresh comes with an approximately 12% higher price tag in China compared to its predecessor.

Also known as the “highland,” the Model 3 refresh includes a longer-range battery. The Tesla China website says the higher-end version of the Model 3 refresh can travel up to 713 km (443 miles) on a single charge and the base model can travel 606 km (377 miles). The new Model 3 variant also features several design changes, including a touchscreen that allows passengers in the back to adjust comfort settings and entertainment, along with tweaks to the vehicle’s exterior design, with new colors available.

Due to its pricing, analysts at Bank of America wrote in a note, “We think the impact of the new Model 3 debut on Chinese EV peers should be manageable considering the sedan’s entry price is much high than consumers’ expectation.”

The analysts said the Model 3’s peers in China include XPeng’s P7, BYD’s Han and Seal and Leapmotor’s C01 electric cars.

Considering the increased starting price, initial sales volume for the Model 3 refresh in China may not be as high as previously expected, they said. Still, the analysts remain positive on the outlook for the vehicle’s sales this quarter as consumers have been waiting for the upgrade.

Also this week, Tesla faced reports of new federal probes into the company by the U.S. Securities and Exchange Commission and a Manhattan federal prosecutor about whether it had deliberately misled consumers with its prior EV battery range claims, and improperly used resources to benefit Musk personally.

Regarding the use of company resources, Musk on Friday denied reports that Tesla had plans to build him a “glass house” near Austin, Texas.

WATCH: The Chinese EV market is dominated by BYD and Tesla

Correction: The Model 3 refresh has a haptic turn signal button on the “stalkless” steering wheel and other controls on the touchscreen.

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September 1, 2023
UAW president says union has filed unfair labor practice charges against GM, Stellantis over contract talks

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UAW President Shawn Fain addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.

Michael Wayland / CNBC

DETROIT – The United Auto Workers has filed unfair labor practice charges against automakers General Motors and Stellantis to the National Labor Relations Board for not bargaining with the union in good faith or a timely manner, UAW President Shawn Fain said Thursday night.

The Thursday filings followed the companies not responding to the union’s demands in a timely matter, Fain said. The union did not file a complaint against Ford Motor, as Fain said the company responded to the UAW’s demands with a counterproposal.

However, Fain heavily criticized Ford’s proposal that he said included a 9% wage increase over the four-year term of the deal; one-time lump-sum bonuses; and unlimited use of temporary workers who are paid less and don’t have the same benefits. The company also rejected “all of the” union’s job security proposals and “quality of life proposals” such as additional paid holidays and a shorter work week, Fain said.

Spokespeople with the automakers did not immediately respond for comment. The union and NLRB also did not immediately respond for additional details of the filings.

This is breaking news. Please check back for additional updates.

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August 31, 2023
Shares of BYD jump after Chinese EV maker posts 200% surge in first half profit

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A BYD ATTO 3 is displayed during the British Motor Show at Farnborough International Exhibition Centre on August 17, 2023 in Farnborough, England.

John Keeble | Getty Images News | Getty Images

Shares of Chinese automaker BYD listed in China jump more than 5% Tuesday, a day after posting a stellar jump in first half profit.

Thanks to record deliveries, the Chinese electric car maker on Monday posted a 204.68% jump in net profit for the first half of the year — that’s net earnings of 10.95 billion yuan ($1.50 billion) in the January to June period, compared to 3.59 billion yuan a year earlier.

Hong-Kong listed shares of the automaker rose 5.6% while stocks in Shenzhen were up as much as 4.75% on Tuesday.

The strong numbers were mainly attributable to rapid growth in the new energy vehicle business, the firm said in a stock filing.

Revenue in the first six months increased 72.72%, compared to the first half of 2022, according to the stock filing.

“If you look at BYD numbers, clearly the top line growth has been very strong, but we are even more impressed by its margins. BYD’s gross margin in the first half was 18%. That’s Tesla’s gross margin,” according to Jiong Shao, Barclays’ China technology analyst.

China’s top-selling car brand posted its best-ever quarterly sales results. Sales of passenger new energy vehicles in the second quarter were 700,244 units, up about 98% year-on-year, according to the company.

In comparison, U.S. rival Tesla reported deliveries of 466,140 vehicles globally for the second quarter.

China is the largest auto market in the world by sales and production. It is also the largest EV market in the world, and a key driver in the push toward electric cars.

“BYD is targeting mass market where Tesla cannot reach,” said Vivek Vaidya, associate partner at Frost & Sullivan, on CNBC’s “Street Signs Asia” Tuesday.

“You will see China-made vehicles which will offer significant price advantage over Tesla [with] similar features, stunning looking cars,” said Vaidya.

Price war

BYD is under pressure from a price competition among domestic rivals as well as Tesla.

Elon Musk’s EV-maker slashed the prices of its Model S and Model X in August as the company looked to gain market share amid rising competition in China. The additional cuts came the same month that Tesla dropped prices for its Model Y and Model 3.

Earlier this year, BYD and its domestic rivals such as Nio and Xpeng also cut prices.

“The lower price to squeeze out of the weaker players is really a good thing for the health of the industry,” Shao from Barclays told CNBC’s “Squawk Box Asia” on Tuesday.

“BYD’s operating margin was 5% which is a pretty healthy operating margin and many players in the Chinese EV market even have negative gross margin, let alone operating margin,” Shao said.

The price cuts come as consumers remain cautious on spending amid a weaker than expected economic recovery in China after strict Covid restrictions were lifted.

Vaidya of Frost & Sullivan said the brands are lowering prices to get as many of their products into the market as possible.

“EVs are slightly different than internal combustion engine vehicles. EVs also make money for the OEMs who sell them,” said Vaidya, referring to original equipment manufacturers such as Tesla, in this case.

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“When they are running, for example, Tesla has charging points and therefore every mile that is run on Tesla, Tesla gets some money back. So the discounting or the price war that is happening is to get the product out there in the market,” said Vaidya.

“After that, it will start earning money.”

Competitive landscape

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August 29, 2023
XPeng Stock Surges on Plan to Buy DiDi’s Smart Vehicle Unit
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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

https://www.barrons.com/articles/xpeng-hong-kong-stock-price-didi-evs-ca20a71d
Updated Aug. 28, 2023 9:00 am ET / Original Aug. 28, 2023 6:36 am ET

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A lot is going on inside

XPeng

these days. Investors have appeared to like it all.
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August 28, 2023
Chinese EV maker Xpeng expects cost cuts, Volkswagen deal to narrow losses

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A XPeng Inc. G6 electric sport utility vehicle (SUV).

Qilai Shen | Bloomberg | Getty Images

Xpeng expects cost cuts and its Volkswagen partnership to narrow the firm’s losses, the Chinese EV maker told CNBC in an exclusive interview on Monday.

On Friday, the firm logged its biggest quarterly loss since its U.S. listing in August 2020. Its second-quarter net loss was 2.8 billion yuan, larger than the 2.13 billion yuan loss expected according to a Refinitiv consensus estimate. Its U.S.-listed shares closed 4.28% lower on Friday. On Monday afternoon, Xpeng’s Hong Kong-listed shares were trading more than 2% higher.

Xpeng’s second-quarter deliveries totaled 23,205, a 32.58% drop from 34,422 deliveries in the same period a year ago.

On Friday, CEO He Xiaopeng said the company is cutting costs across the business and that should “substantially drive gross margin improvement in 2024.”

In April, Bloomberg reported the company was planning to trim manufacturing costs, including saving 50% on intelligent driving features by the end of 2024.

“From an expense perspective, we went through a very significant business reorganization as well as changes that we have made. We start to see the regaining of the growth momentum that we have in our business,” Brian Gu, vice chairman and co-president of Xpeng, told CNBC’s “Street Signs Asia” on Monday.

Xpeng is attempting to revive its business this year, after its share price sank by more than 80% in 2022. The firm struggled with a tough macroeconomic environment in China and a price war among domestic rivals and Tesla, which slashed the prices of its Model Y and Model S last week.

“The demand side actually remains pretty robust. I think it continues to grow despite the economic backdrop. But the same time, the competition has intensified in the first half, with more players launching more new models and being very aggressive on price competition,” said Gu.

“In order to gain better profitability, we also have endeavor to spend a lot of time on cost cutting. Later next year, we expect our total vehicle BOM [bill of materials] costs to be reduced by up to 25%. That will give us a big tool to increase profitability as well,” said Gu.

In automotive manufacturing, BOMs list all the parts required to build a vehicle, such as an engine, brakes, seats and dashboards.

BofA Securities said in a report Monday that it expects Xpeng’s cooperation with Volkswagen to “improve its financial position and likely enhance its supply chain management.”

BofA upgraded Xpeng from “neutral” to “buy” at $22 per share, up from its previous price target of $16.30 per share.

In late July, Germany’s Volkswagen Group said it is injecting about $700 million in Xpeng and taking a 4.99% stake in the company.

The partnership will see both companies co-developing two new EVs that will incorporate Xpeng’s advanced driver-assist software for the Chinese market with a rollout target for 2026.

Global and local automakers are promoting advanced tech to compete in China — the world’s largest EV market. BofA Securities in a May report said it expects China to hold 40%-45% market share in 2025.

“With the Volkswagen agreement, we also anticipate meaningful contribution to our bottom line starting next year. So that’s also another tool we can use to increase our profitability,” said Gu.

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In addition to planned new models, Xpeng has “updated versions of current models” set to be launched next year, said Gu.

“We anticipate those new models will carry more favorable gross margins which also will help our profitability and product mix,” said Gu.

The firm expects its latest model — the G6 Ultra Smart Coupe SUV, which was launched at the end of the second quarter — to boost margins.

“We see an improving product mix and a stronger cost control improving its gross profit margin in 2024-2025E. We expect its new model pipeline in second half of 2023 to 2025 to improve its sales volume growth,” said BofA Securities.

— CNBC’s Michael Bloom contributed to this report.

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August 20, 2023
Automaker Stellantis has discussed moving pickup truck production from the U.S. to Mexico, union leader says

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UAW Vice President Rich Boyer addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.

Michael Wayland / CNBC

WARREN, Mich. – Automaker Stellantis has threatened to move production of the current Ram 1500 pickup truck from a factory in suburban Detroit to Mexico, a union leader said Sunday.

United Auto Workers Vice President Rich Boyer, who heads the union’s Stellantis unit, said the automaker has discussed the move during ongoing contract negotiations that are occurring simultaneously but separately between the UAW and General Motors, Stellantis and Ford Motor.

Boyer said the company’s plans would include producing a new all-electric Ram pickup truck at the Sterling Heights Assembly Plant, which currently produces most of the Ram light-duty pickups.

Such a move would likely receive some political pushback. It also would potentially impact the union’s membership, as EVs require fewer workers to produce them. There’s also no guarantee that an all-electric pickup would be as successful as the current internal combustion engine (ICE) model, meaning less job security for members.

Boyer, speaking to hundreds of union members during a “Sunday Solidarity” rally, didn’t hold back his displeasure about the potential plans, calling out Stellantis CEO Carlos Tavares for not caring about U.S. auto workers.

“He don’t give a s*** about the American auto worker,” Boyer said wearing a red UAW shirt with “UNITED WE STAND DIVIDED WE FALL.” “They have said they want to take the Ram 1500 ICE and send it to Mexico.”

Workers build 2019 Ram pickup trucks on ‘Vertical Adjusting Carriers’ at the Fiat Chrysler Automobiles (FCA) Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Rebecca Cook | Reuters

Stellantis, which already produces some Ram pickups in Mexico, did not confirm nor deny the potential move, saying in a statement: “Product allocation for our U.S. plants will depend on the outcome of these negotiations as well as a plant’s ability to meet specific performance metrics including improving quality, reducing absenteeism and addressing overall cost.

“As these decisions are fluid and part of the discussions at the bargaining table, we will not comment further.”

UAW President Shawn Fain said he believes relocating the truck production would “be a huge mistake on the part of Stellantis to try it.”

“Those are our jobs and that’s our vehicle. We expect to keep that work,” he said.

Speaking with CNBC after the event, UAW’s Boyer described the ongoing negotiations with Stellantis as “slow and confrontational.”

Fain, who began leading the union earlier this year and has taken a more confrontational tone with the negotiations, said he would like to reach tentative agreements with the companies in the coming weeks ahead of the deals expiring at 11:59 p.m. ET, Sept. 14.

UAW President Shawn Fain addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.

Michael Wayland / CNBC

‘When Labor Day hits, we better have agreements. If we don’t, there’s going to be problems,” Fain said, declining to predict the likelihood of a strike against one or all three of the automakers. “We’re not married to anything right now.”

Fain earlier this month publicly threw a recent proposal from Stellantis into a trash bin during a Facebook Live event with members.

Contract talks between the union and automakers usually begin in earnest in July ahead of mid-September expirations of the previous four-year agreements. Typically, one of the three automakers is the lead, or target, company that the union selects to negotiate with first and the others extend their deadlines. However, Fain has said this year may be different, without going into specific details.

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August 20, 2023
California regulator probes crashes involving GM’s Cruise robotaxis

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A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company’s headquarters in San Francisco.

Heather Somerville | Reuters

California’s autos regulator said on Friday it is investigating “recent concerning incidents” involving autonomous vehicles operated by General Motors unit Cruise in San Francisco and asked the company to take half its robotaxis off the roads.

The statement from the California Department of Motor Vehicles (DMV) came after a Cruise robotaxi was involved in a crash with an emergency vehicle in San Francisco late on Thursday, the latest accident involving self-driving cars.

The regulator also said it has asked Cruise to immediately reduce its active fleet of vehicles by 50% until the investigation is complete and Cruise takes actions to improve road safety. Cruise has agreed to a 50% reduction, it added.

“The DMV reserves the right, following investigation of the facts, to suspend or revoke testing and/or deployment permits” if it is determined to be an unreasonable risk to public safety, the regulator said in a statement.

Cruise said one of its cars “entered the intersection on a green light and was struck by an emergency vehicle that appeared to be en route to an emergency scene” after 10 p.m. on Thursday (0500 GMT Friday).

The car “did identify the risk of a collision and initiated a braking maneuver, reducing its speed, but was ultimately unable to avoid the collision,” the company, which is investigating the incident, said in a statement on Friday.

Initial investigation shows the collision occurred when a fire truck was operating in an emergency with its forward-facing red lights and siren on, the San Francisco Police Department said in a statement to Reuters.

The police said the sole passenger in the autonomous vehicle (AV) was transported to a local hospital with non-life-threatening injuries.

The California Public Utilities Commission (CPUC) last week voted to allow robotaxis from Cruise and Alphabet’s Waymo to operate at all hours of the day throughout San Francisco and charge passengers for rides despite strong opposition from residents and city agencies.

The two have been running robotaxi tests limited by times and geographic areas within San Francisco.

City Attorney David Chiu asked the CPUC on Thursday to halt its decision while the city files for a re-hearing. “We have seen that this technology is not yet ready, and poor AV performance has interfered with the life-saving operations of first responders. San Francisco will suffer serious harms from this unfettered expansion,” he said in a statement.

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August 19, 2023
Lidar Is Coming of Age. Investors Can Begin to Compare the Companies.

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Lidar Is Coming of Age. Investors Can Begin to Compare the Companies.

The market for lidar, a key technology for self-driving cars, is maturing, making it possible for investors to start to differentiate between the companies and their stocks.

An error has occurred, please try again later.

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August 10, 2023
Indian automaker Mahindra says competition from Tesla ‘does not faze us’

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Mahindra atom electric car at Auto Expo 2020, on February 5, 2020, in Greater Noida, India.

Pradeep Gaur | Mint | Hindustan Times | Getty Images

Mahindra Group isn’t worried about global players like Tesla entering India’s highly competitive electric vehicle market, its CEO and managing director Anish Shah told CNBC.

“We’ve seen tremendous competition in India over the last 20 years. So Tesla or anyone else coming in does not faze us,” Shah said on “Street Signs Asia” Tuesday.

“At one point, Mahindra was written off when all the global majors were coming into India. Today, we continue to have the number one market share in SUVs from a revenue standpoint,” he added.

Tesla is reportedly discussing plans to enter the EV space in India, which is the world’s third-largest auto market, according to Reuters.

CEO Elon Musk met Prime Minister Narendra Modi in June and said he has plans to “make significant investments in India.”

Despite the global competition, Mahindra has “not just survived but thrived” in the Indian market, said Shah.

“We have close to a 50% market share in the light commercial vehicle segment. We continue to have 40% plus market share in farm equipment and tractors,” the CEO said, adding the company expects to perform well in the coming years.

Last week, Mahindra raised $145 million from Singapore’s state-owned investor Temasek for its electric vehicle unit at a valuation of up to 805.8 billion Indian rupees ($9.8 billion), in the latest fundraising by the Indian automaker. Temasek will take up to 3% stake in the EV unit Mahindra Electric Automobile Limited.

The company said it expects EVs to make up between 20% and 30% of its total SUV sales by 2027.

Market potential

India’s EV market “will cross sales of 10 million units by 2030, with an overall adoption rate of more than 30% across different vehicle classes,” according to a report last year by management consulting firm Arthur Little.

It noted adoption rates remained very low — currently around 2% — due to an “absence of adequate EV infrastructure.”

Read more about electric vehicles, batteries and chips from CNBC Pro

Given current global supply chain disruptions and the government’s policy of making India self reliant, the report added, “It is important that India creates its own indigenous solutions and a supporting domestic value chain.”

Shah highlighted that “supply chain obviously is an important part” for India’s EV market.

“We do have a research center in India that develops a fair bit of technology as well,” he said. “But the auto industry technology is global. To that extent, there is a dependence similarly with semiconductors. And we’ve seen some of the challenges in that in the last couple of years.”

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August 8, 2023