Tag: Electric vehicle manufacturing

Volvo Cars will use Tesla’s Superchargers but not its autonomous driving tech. Its CEO explains why

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Volvo Cars CEO Jim Rowan photographed in Nov. 2022. The company wants every car it sells to be fully electric by the year 2030.

Anders Wiklund | AFP | Getty Images

Volvo Cars does not plan to use autonomous driving technology from Tesla and will instead focus on developing its own systems, according to the company’s CEO.

Back in June, the Gothenburg-headquartered carmaker said it had inked an agreement with Elon Musk’s firm that would give its electric vehicles access to 12,000 Tesla Superchargers in the U.S., Mexico and Canada.

Speaking to CNBC’s “Squawk Box Europe” on Thursday morning, Volvo Cars chief Jim Rowan was asked whether this meant the business would consider using Tesla’s autonomous driving tech in the future.

“We’ve already made that decision in terms of what we want to control internally, in terms of our technology stack,” Rowan said.

“And we’ve chosen that we want to be in full control of our ADAS [advanced driver assistance systems], all the way up to full AD [autonomous driving] software,” he added.

“So we will continue to write that, we will continue to invest in that, and we’ll continue to develop that.”

In a sign of how the company’s strategy is taking shape, Volvo Cars announced late last year that it had taken full ownership of Zenseact, a business specializing in AD software.

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Rowan was speaking to CNBC after Volvo Cars reported second-quarter results. The company said earnings before interest and taxes were 5 billion Swedish krona (around $487.5 million) compared to 10.8 billion Swedish krona in the second quarter of 2022.

“During the quarter, the company reported a continued strong sales performance in electric cars,” it said in a statement accompanying its earnings report. “Sales of fully electric Volvo car models increased by 178 per cent year-on-year during the quarter and accounted for 16 per cent of its total share.”

Volvo Cars’ longer-term electrification strategy is centered around every car it sells being fully electric by the year 2030. This would mean a phase-out of vehicles using internal combustion engines, a category that includes hybrids.

Supply chain challenges

The past few years have seen the automotive industry suffer issues related to supply chains and the cost of materials crucial to the production of electric vehicles.

During his interview with CNBC, Rowan gave an overview of the current state of play. “Last year we saw lithium spike quite dramatically, that’s now come down substantially from its peak,” he said.

“It went from about 10 to about $110 per kilo and now it’s down … below, somewhere between 30 and 40 [dollars],” he added. “So we’re starting to see that normalize, and I think that will keep reducing through the course of this year.”

Rowan also described semiconductors as being “patchy” in 2022 but “much, much better this year.”

This had been shown in Volvo Cars own output, he said. “We manufactured over 50% more cars this quarter than we did in the same quarter last year.”

He added that 2022 had also been affected by Covid lockdowns. “If you remember, Shanghai was locked down for almost 60 days — we had a lot of the suppliers in Shanghai, and that was an effect there,” Rowan said.

“So we’re seeing that bounce back really quickly for us.”

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July 20, 2023
Shares of Chinese Tesla rival Xpeng rocket 11% as EV deliveries return to growth

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A XPeng Inc. G6 electric sport utility vehicle (SUV). The company is hoping the release of the new car will boost sales which plunged in the first quarter.

Qilai Shen | Bloomberg | Getty Images

Shares of Xpeng surged in pre-market trade in the U.S. after the Chinese electric vehicle maker reported a quarterly return to growth for car deliveries, following more than a year of declines.

Xpeng on Saturday said it delivered 23,205 cars in the second quarter of 2023, logging a 27% quarter-on-quarter rise. This surpassed the company’s own delivery forecast of between 21,000 and 22,000 units. That was still lower than the 34,422 cars delivered in the second quarter of last year.

U.S.-listed shares of Xpeng surged more than 11% in pre-market trade before paring some of those gains.

Deliveries have been declining each quarter since the first quarter of 2022 for Xpeng, as it struggled with a tough macroeconomic environment in China and heightened competition from domestic rivals and from Tesla, which has been cutting prices in China to spur demand. That has also hurt Xpeng’s competitiveness.

Tesla’s strategy seems to be working with the company reporting global vehicles deliveries of 466,140 in the second quarter, beating analysts expectations.

Xpeng said deliveries in June alone totalled 8,620 cars, marking a 15% increase over May and the highest monthly delivery figure this year.

The Guangzhou, China-headquartered company said deliveries of its flagship P7 sedan rose 17% in June from May, but did not give a specific unit figure.

Xpeng’s latest car — the G6 Ultra Smart Coupe SUV — was launched at the end of the second quarter, with deliveries beginning this month. Xpeng is hoping this will boost sales in the coming quarters.

Xpeng’s losses continue to widen and competition is getting fiercer. Last month, Chinese EV start-up Nio made big price cuts to its cars.

Xpeng has been reorganizing its management structure and overhauling the company over the past few months in the hope of unlocking growth.

Some of the company’s rivals have fared better. Li Auto delivered 32,575 vehicles in June while its second quarter figures totaled 86,533. Nio meanwhile delivered 10,707 vehicles in June and 23,520 cars in the second quarter, not far ahead of Xpeng.

Meanwhile, Warren Buffett-backed automaker BYD delivered 253,046 new energy vehicles — which includes battery and plug-in hybrids — in June alone, representing a 96% year-on-year rise.

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July 3, 2023
India is learning to love electric vehicles — but they’re not cars

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Electric vehicle charging stations from Tata Power can be found on 350 of the 600 highways in India.

Puneet Vikram Singh, Nature And Concept Photographer, | Moment | Getty Images

When most people think about electric vehicles, they think cars.

From brands like Tesla and Rivian in the United States, to Nio and XPeng in China, global sales of electric vehicles have surged. Two million EVs were sold in just the first quarter of 2022 — that’s a significant jump from a decade ago when sales hit only 120,000 cars worldwide, the International Energy Agency reported.

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India’s different. The United States and China have focused on the adoption of EV cars. But in India, the world’s fifth-largest economy, two-wheel vehicles such as scooters, mopeds and motorbikes, dominate the market.

James Hong, head of mobility research at Macquarie Group, said two-wheel vehicles are in higher demand than cars in India, and that shouldn’t come as a surprise.

Underdeveloped road infrastructure and lower personal incomes make it more convenient and affordable for people to own scooters, motorbikes or mopeds, rather than cars, Hong said.

Still, adoption remains low.

EVs make up only around 2% of total automobile sales, but the Indian government has ambitious targets to increase EV adoption in the next decade, focusing on raising purchases of two-wheel vehicles.

Sales in India are expected to rise by between 40% and 45% by 2030, at which point 13 million new vehicles will be sold annually, according to projections from Bain & Company published in December.

India’s four-wheel vehicle sector is poised to grow by only 15% to 20% by 2030, with 1 million new vehicles sold annually, the consulting firm said.

Growth of India’s four-wheel EV segment is expected to be smaller because the cars are mostly owned only by drivers who travel out of the city on longer routes, said Arun Agarwal, deputy vice president of equity research at Kotak Securities.

Bain & Co. predicts that total revenue across the full supply chain of India’s EV industry will generate $76 billion to $100 billion by 2030.

Reducing cost to increase adoption

People in India have long preferred two wheels to four, and the country is home to more than 10 startups serving the market, Agarwal said.

For India to increase purchases of two-wheel vehicles, they need to be cheaper, and more charging infrastructure needs to be in place, Jinesh Gandhi, equity research analyst at Motilal Oswal Securities, told CNBC.

Gandhi said that 90% of two-wheel vehicles with internal combustion engines cost between 70,000 rupees ($845) and 140,000 rupees ($1,690). The starting price of electric two-wheel vehicles can be as high as 160,000 rupees.

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The cost of EVs will come down if battery prices drop, Kotak’s Agarwal said.

High inflation and disrupted supply chains have driven batter prices higher in 2022, Bain & Co. said. The cost would have to fall by an additional 20% to 30% for EVs to compete with internal combustion engine vehicles.

Arun Kumar, chief financial officer of two-wheel EV manufacturer Ola Electric, said it’s a “myth” that EVs are more expensive than internal combustion vehicles because the “lifecycle cost of ownership of an EV is lower” than a two- or four-wheel vehicle that runs on fuel.

Ola Electric’s two-wheel scooters, and upcoming motorbike and four-wheel passenger car, all range between $1,000 and $50,000.

Ola Electric

That means the amount of money EV owners can save in fuel and maintenance costs can offset the higher initial purchase price, he said.

Ola’s two-wheel scooters, an upcoming motorbike, and four-wheel passenger car range between $1,000 and $50,000, he said.

“There’s no coming back to [internal combustion engine] vehicles. It’s a single direction,” Kumar added.

Government help

Central and state governments in India have been providing incentives to encourage consumers in India to make the switch to EVs, Kotak’s Agarwal said.

According to the International Energy Agency, government programs have provided funding to ramp up production of EV public buses and taxis, as well as increase charging stations around India.

EV owners are also granted road tax exemption at the time of purchase, and will receive a deduction on their income tax, the Accelerated e-Mobility Revolution for India’s Transportation said.

Including taxes, owners of two-wheel internal combustion engine vehicles in India typically pay 3,000 rupees a month for their vehicle, Kumar said. Government initiatives coupled with money saved on petrol would therefore mean that the monthly installment on a vehicle becomes largely free to a customer, he said.

‘Range anxiety’

As the adoption of electric vehicles is set to increase, so will charging infrastructures around the country. That remains a factor deterring people from making the switch away from carbon-intensive vehicles, Kotak’s Agarwal said.

“If you are stranded on the road, you don’t have any option but to get the vehicle towed to the nearest charging station, which is time- as well as a cost-consuming,” Gandhi said.

India’s charging infrastructure will need to significantly expand to support the number of EV companies that are set to come on the roads, the Bain & Co. report said, noting that several companies have made early investments and are committed to increasing the availability of chargers.

Tata Power claimed that it has built about 2,500 charging stations over 300 cities and towns in India.

Tata Power

One of them is Tata Power, India’s largest privately owned power generation company.

Tata Power claimed it has built about 2,500 charging stations in 300 cities and towns in India. They can be found on 350 of 600 highways in the country, said Virendra Goyal, the firm’s head of business development.

Many EV owners suffer from “range anxiety” when the distance between charging stations is too far, and bridging the gap would encourage more drivers to migrate to e-mobility, he said.

The company aims to have 25,000 chargers across India by 2028, Goyal said.

Correction: This article has been updated to accurately report where India ranks among the world’s biggest economies. An earlier version misstated its ranking.

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January 8, 2023
Tesla is still dominant, but its U.S. market share is eroding as cheaper EVs arrive

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A Tesla Model 3 vehicle is on display at the Tesla auto store on September 22, 2022 in Santa Monica, California. Tesla is recalling over 1 million vehicles in the U.S. because the windows can pinch a person’s fingers while being rolled up.

Allison Dinner | Getty Images

Tesla is still the top-selling electric vehicle brand in the U.S., but its dominance is eroding as rivals offer a growing number of more affordable models, according to a report Tuesday by S&P Global Mobility.

The data firm found that Tesla’s market share of new registered electric vehicles in the U.S. stood at 65% through the third quarter, down from 71% last year and 79% in 2020. S&P forecasts Tesla’s EV market share will decline to less than 20% by 2025, with the number of EV models expected to grow from 48 today to 159 by then.

A drop in Tesla’s U.S. market share was expected, but the rate of the decline could be concerning for investors in Elon Musk’s autos and energy company. As Musk focuses attention on fixing his recently acquired social media company, Twitter, Tesla shares closed down by about a point to $180 on Tuesday. Tesla’s stock has declined by almost half year to date.

S&P reported that Tesla is slowly losing its stranglehold on the U.S. EV market to fully electric models that are now available in price ranges below $50,000, where “Tesla does not yet truly compete.” Tesla’s entry-level Model 3 starts at about $48,200 with shipping fees, but the vehicles typically retail for higher prices with options.

“Tesla’s position is changing as new, more affordable options arrive, offering equal or better technology and production build,” S&P said in the report. “Given that consumer choice and consumer interest in EVs are growing, Tesla’s ability to retain a dominant market share will be challenged going forward.”

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The new data follows a Reuters report Monday that Tesla is developing a revamped version of its entry-level Model 3 aimed at cutting production costs and reducing the components and complexity in the interior.

During the company’s third-quarter earnings call in October, Musk said Tesla was finally working on a new, more affordable model that he first teased in 2020.

“We don’t want to talk exact dates, but this is the primary focus of our new vehicle development team, obviously,” he said, adding that Tesla had completed “the engineering for Cybertruck and for Semi.”

He described the future vehicle as something “smaller,” that will “exceed the production of all our other vehicles combined.”

Stephanie Brinley, associate director of AutoIntelligence for S&P Global Mobility, noted that Tesla’s unit sales are expected to increase in coming years despite the decline in its market share.

Tesla’s current leadership in EVs is over a relatively insignificant market. Despite the amount of attention surrounding EVs, sales of all-electric and plug-in hybrid electric vehicles — which include electric motors as well as an internal combustion engine — remain miniscule.

Of the 10.22 million vehicles registered in the U.S. through the third quarter, roughly 525,000, or 5.1%, were all-electric models. That’s up from 334,000, or 2.8%, through the third quarter of 2021, according to S&P.

The majority of the EVs registered through September — or nearly 340,000 — were Teslas, according to S&P. The remaining vehicles were divided, very unevenly, among 46 other nameplates.

But Tesla’s success in the market as well as government incentives have all but forced traditional automakers to make an effort in the growing EV segment.

The Ford Mustang Mach-E, ranked third in EV registrations, is the only non-Tesla vehicle in the top five rankings, S&P said. Those EVs were followed by the Chevrolet Bolt and Bolt EUV, Hyundai Ioniq 5, Kia EV6, Volkswagen ID.4 and Nissan Leaf.

S&P noted that the growth in EVs is largely coming from current owners of Toyota and Honda vehicles. Both of the automakers are well-known for fuel-efficient vehicles but have been slow to transition to all-electric models.

To help curb carbon and other emissions from traditional gas-powered vehicles, several states and the federal government are encouraging the transition to fully electric vehicles with incentives such as tax breaks.

Transportation is responsible for 25% of carbon emissions from human activity globally, according to estimates by the nonprofit International Council on Clean Transportation.

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November 29, 2022