EV Earnings (10/31/22)

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In today's newsletter:⚡ The Headline: EV highlights from big auto quarterly earnings reports 🚨 Making News: Ford dealers, Polestar 3 delay, Rivian recall solved, Lucid Saudi store 🇪🇺 Europe Electrified: EU ICE ban, Tesla expansion, NIO rollout, VW ID. Buzz van🧧 China Report: Tesla starts a price war, NIO new HQ, Evergrande delivers, GAC IPO🔋 Supplier Supercharge: DOE funds batteries, Ascend gets $300m, Magna in MichiganBonus: check out the report by Automotive News on undersea mining of EV battery materials

⚡ EV Earnings ⚡

Ford Motor Company: CEO Farley sees tax credits as “game changer” for commercial. Starting in 2023, Farley said that more than half of Ford’s customers should be able claim credits. Importantly, there are no restrictions on battery sourcing or manufacturing for the commercial tax credits. Farley said, "Having almost 65 percent of our customers qualify, including local municipalities? It's a game changer for our demand."

General Motors: GM vehicles will be able to meet all requirements in three years for full tax credit. CEO Mary Barra said GM has been working on battery materials and supply contracts to meet the automaker’s goal of selling 1 million EVs in the U.S. in 2025. Bara did note that GM expects to build fewer electric vehicles by the end of next year than it previously forecast, citing a slow start to production at a new battery plant in Ohio.

Hyundai Motor Company: company expects record year and raises EV sales target. The company said EV sales rose more than 27 percent from a year earlier to about 52,000 units. That’s 5.1 percent of overall sales. Despite the macro economy, Hyundai expects record-high results this year. It raised its EV sales target for 2023 by 40 percent to about 300,000 units, with the Ioniq 6 accounting for about 20 percent of those sales next year. It is also considering investing in a joint venture to make batteries in the U.S. The Ioniq 5 EVs is currently made in Ulsan, South Korea and does not qualify for the tax credits.

Mercedes-Benz Earnings: EV sales more than doubled in Q3 2022. Mercedes-Benz passenger car BEV sales more than doubled; eight battery electric vehicles are now on sale with the EQE SUV introduced and EQS SUV & EQE in production. Mercedes-Benz Passenger Car BEV sales also more than doubled in the first nine months of the year, up 156 percent.

Volkswagen Group: BEV ramp-up progressing with strong China strongest demand driver. All-electric vehicles reached a 6.8% share of total deliveries in Q3, sequentially increasing over the year, with China remaining the biggest driver in BEV deliveries. In the year to date, 366,400 BEVs were handed over to customers globally, 25 percent up from 293,000 in the prior-year period. Due to strong demand and ongoing supply constraints, the Group’s BEV order bank in Western Europe remains at a high level of over 350,000 vehicles.

🚨 Making News 🚨

EVs reach 18% of new car sales in California, just 6% in the U.S. Of the approximately 576,000 EVs sold in the U.S. year to date, over 250,000 were sold in California. The state’s Office of the Governor issued a report on the progress of the state’s EV market now that nearly 18% of all new cars sold in the state are all-electric.

Ford dealers get an extra month to decide on EV investment. The Oct. 31 deadline has been pushed back to Dec. 2, according to Ford spokesman Marty Gunsberg. This comes after some retailers asked for more time to make a decision. The new deadline more closely aligns with the Dec. 15 deadline for Lincoln dealers for a similar program requiring up to $900 million in investment.

Left out of EV tax credits, Hyundai pushes forward on U.S. investment. Hyundai broke ground on its $5.54 billion project in Georgia which it expects will provide the capacity to produce up to 500,000 EVs and batteries for the Hyundai, Genesis and Kia brands. Hyundai Motor Group's EVs are no longer eligible for EV tax credits because they are imported.

Faraday Future names ex-Romeo Power executive as interim finance chief. Yun Han named Chief Accounting Officer and Interim Chief Financial Officer. The move comes following the resignation of Becky Roof, who served as interim Chief Financial Officer until October 12. Ms. Roof, a Managing Director at AlixPartners, also served as interim Chief Financial Officer of Lordstown Motors. Ms. Han was previously Chief Financial Officer of Romeo Power, which was recently acquired by Nikola Motors.

Polestar stores face longer wait for high-volume Polestar 3 crossover. Polestar's U.S. dealers expected the Swedish EV maker's first crossover model to arrive in early 2023. Now they are finding that they will need to wait for the Polestar 3 for nearly a year. U.S. deliveries of the midsize crossover are now expected to begin in the fourth quarter of 2023. The U.S. is expected to be the vehicle’s largest single market, accounting for 30% of global sales.

Rivian CEO says direct-to-consumer model allowed it to tackle recall. CEO RJ Scaringe said: "For us, one of the most powerful things was having our direct-to-consumer model, where instead of having to go through third parties or dealers or different entities, we literally mobilized our whole service network to say, 'Let's go move through these vehicles really quickly’.” The recall impacted about 12,200 of the approximately 13,200 vehicles delivered through September of this year.

Via Motors preparing to move HQ from Utah to Michigan. The company is planning to open a 100,000-square-foot office and R&D tech center in suburban Detroit. The move is helped by a $2.5 million performance-based grant from the state of Michigan. Via Motors, chaired by former GM executive Bob Lutz, is in the process of being acquired by Ideanomics.

Lucid opens first retail location in Saudi Arabia, marking entrance to Middle East EV market. The opening of the studio is not a surprise given that Saudi Arabia's Public Investment Fund owns just over 60 percent of the luxury EV company. The Saudi government has already signed an agreement with Lucid to buy up to 100,000 vehicles over a 10-year period, and the automaker is planning to build a factory in the country.

Mullen snags GM executive to oversee commercial business; orders for Mullen FIVE quadruple: Former GM executive John Schwegman joined the company as Chief Commercial Officer and will focus on Mullen’s Class 1 through Class 6 light- and medium-duty truck segment. Schwegman was most recently Senior Director of Global Chevrolet Product Marketing. In a press release, Mullen also announced that pre-orders for the Mullen FIVE have quadrupled.

EV charging company Wallbox opens first U.S. manufacturing facility. The provider of EV charging and energy management solutions officially opened its first North American manufacturing facility in Arlington, Texas. Designed to produce over 250,000 units in 2022 and over one million in 2030, the 130,000-square-foot factory will manufacture all of the company’s chargers in the U.S. which will serve multiple segments of EV charging including residential charging, bidirectional charging and hyperfast highway corridor charging.

🇪🇺 Europe Electrified 🇪🇺

EU reaches deal for ban on new combustion-engine cars from 2035. The EU's three key institutions - its executive arm, the parliament and member states - reached agreement late Thursday on rules that will essentially ban the sale of new cars that run on gas. The deal also included a 55 percent cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5 percent reduction by then.

France and Germany hatching a plan to protect Europe’s EV makers. French President Emmanuel Macron is trying to enlist German Chancellor Olaf Scholz’s support for a new plan to help European auto makers compete with the U.S. and China, after President Joseph Biden outlined heavy subsidies benefiting electric cars made in North America. “You have China and the US protecting their industry, but Europe remains open to all winds, we must change,” Macron said.

Tesla starts clearing forest to expand German EV plant. Tesla is working on an application to increase its storage and logistics capacity at its site in Gruenheide, a spokesman said early Saturday, confirming a report by the Maerkische Onlinezeitung. The company began the process of clearing more than 173 acres of nearby forest necessary for the project expansion.

NIO on faster track to profitably than Tesla as it targets Europe. Founder and CEO William Li made the historical claim in an interview with Automotive News Europe sister publication Automobilwoche. He said the number of Chinese automakers with "a real product" is between 20 and 30 – these include Geely and SAIC. He said his goal is for Europe is for NIO to be the highest customer satisfaction brand in three years.

Turkey’s Erdogan Rolls Out First Turkish EV Ahead of Elections. The Togg SUV arrives amid soaring inflation, falling lira. Sales of the first Togg model, the C-segment SUV, are set to begin at the end of the third quarter of 2023. Turkey’s Automobile Joint Venture Group, the consortium of local companies behind the “domestic car” project, aims to start producing other models in following years. The plan is to export the Turkish EV to Europe and then the rest of the world after 15-18 months of domestic sales only.

Volkswagen collects over 20,000 orders for the ID. Buzz. The vehicle entered production in Hanover, Germany in early June. The company plans to produce 15,000 units by the end of 2022 and then gradually to ramp up to 130,000 annually in the future. The first 6,000 units will be used by dealers.

🧧 China Report 🧧

NIO signs deal to build new international headquarters in Shanghai's Jiading district. NIO’s new international business headquarters will house R&D, offices and showrooms, and will be the landing point for its international business, including vehicle exports, according to a statement. The new location is about 20 kilometers from the current one and closer to the center of Shanghai. NIO’s China headquarters is in Hefei, Anhui province, home to its two factories.

Toyota to build EV in China powered by BYD batteries. Toyota partner with BYD for batteries to launch a small electric sedan produced and sold in China. The automaker said the car will be called the Toyota bZ3 (Beyond Zero).

Geely’s Farizon commercial vehicle brand secures more than $300 million in financing. Farizon will use the capital to fund R&D, operations and product development in order to consolidate its leading position in China’s alternative-energy commercial-vehicle market, according to Geely.

Huawei-backed AITO starts offering discounts after Tesla’s big price cuts. AITO is the first NEV brand in China to follow Tesla's price cuts last week. Industry insiders believe Tesla’s move will start a pricing war in the sector. AITO is offering discounts for both of its models (the M5 and the M7), which will give consumers RMB 8,000 yuan ($1,100) in savings on the final payment for the car. On October 31st, Ford also cut the price of its Mustang Mach-E in China.

China's Evergrande finally delivers first electric vehicles. China Evergrande New Energy Vehicle Group has commenced deliveries of its Hengchi 5 electric vehicle. The first 100 customers received their cars on Saturday, per the company’s official WeChat account. The move is part of Evergrande’s shift from real estate to EVs over the next decade, and the company plans to make one million vehicles by 2025.

AVATR 11 electric SUV to be sold at Huawei flagship stores starting in December. AVATR Technology reached an agreement with Huawei for its first model, the AVATR 11, to be sold at Huawei’s flagship stores in Beijing and Shenzhen Starting in December. AVATR currently has more than 60 stores across China. The AVATR 11 is positioned as a high-end luxury electric car and directly competes with the NIO ES8 and XPeng G9.

Lotus unveils 600-km range all-electric Eletre SUV starting at $95K. The Lotus Eletre was launched in China with up to 918 horses, 600 km of range, and a starting price of 828,000 RMB (115,900 USD). It is available in two trim levels: S+ and R+. Deliveries to start in March 2023.

NIO to allow owners to swap battery packs for different capacity in China. In a pilot starting October 28, NIO began allowing owners to upgrade or downgrade their vehicle battery packs to a different capacity on a daily basis in Guangdong, Shandong, Chongqing, Hangzhou and Huzhou.

GAC Aion to file for IPO in China in Q2 next year, report says. GAC Aion is expected to be the first NEV stock on China's Nasdaq-style sci-tech innovation board, also known as the STAR market. GAC Aion was founded on July 28, 2017, and began independent operations on November 20, 2020, with the Aion LX Plus, Aion V Plus, Aion S Plus, Aion S and Aion Y currently on sale. The company sold 30,016 vehicles in September, up 120.93 percent year-on-year and up 11 percent from August, data it released earlier this month showed.

XPeng begins deliveries of its flagship G9 SUV. The company delivered the first G9 vehicles to consumers at one of its delivery centers in Guangzhou, where the company is headquartered, according to the XPeng App. The dual-motor four-wheel-drive model is not expected to begin until December.

Gotion to build 2 new battery projects with $1.6 billion investment. Volkswagen-backed Chinese power battery giant Gotion High-tech plans to invest a total of RMB 11.5 billion ($1.6 billion) in two new battery projects to expand its production capacity. Gotion plans to invest RMB 6.7 billion in the Xinzhan High-Tech Industrial Development Zone in Hefei, Anhui province, to build a 20 GWh annual capacity power battery project, according to an exchange announcement. The project is scheduled to be completed and start production 16 months from the date of construction.

🔋 Supplier Supercharge 🔋

Silicon EV battery tech gets $250 million in DOE grants. The Department of Energy awarded $250 million in cost-sharing grants to three companies working to scale silicon technology for faster charging and more energy storage of EV batteries. These include: Amprius Technologies Inc., Group14 Technologies Inc. and Sila Nanotechnologies. The DOE funding is part of the $1 trillion Bipartisan Infrastructure Law passed in November 2021.

Lithium-ion recycling company Ascend Elements secures $300 million in funding. Ascend Elements, a U.S.-based engineered materials and lithium-ion battery recycling company, announced that has secured $300 million in equity and debt financing, including $200 million in Series C equity investments from an international group of strategic and financial investors. Investors include SK Group, Jaguar Land Rover’s InMotion Ventures, TDK Ventures and the Oman Investment Authority, among others. The company has also received $480 million in grants from the DOE.

Magna to invest $500 million to expand EV facilities, bring 1,500 jobs to Michigan. Contract manufacturer Magna International announced it is investing over $500 million to erect two new manufacturing facilities and expand a third in the state of Michigan. Magna has more than 32 facilities and 10,000 employees in Michigan alone. The Michigan Strategic Fund board approved $10.2 million in state program grants for the investment.

Bosch invests more than 260M for electric motor expansion. Bosch says it started electric motor production in October at its 200,000 square-foot Charleston campus. The facility was opened in 1974 and is Bosch’s largest manufacturing facility in terms of employment, with about 1,500 employees. The site covers 118 acres with over 900,000 square feet of manufacturing and office space.

Lear plans $80 million EV parts plant for Ultium platform. The $19 billion company known for making seats will make battery disconnect units for GM's Ultium EV platform. It struck a deal with GM to exclusively supply the battery disconnect unit on all full-size SUVs and trucks built on GM's Ultium EV platform through 2030.

***Did you make it to the end?!?! Here's a (second) bonus:

From @GregKable: Word in China is BYD has commissioned a Yantai shipyard to build 8 Ro-Ro ships, each capable of holding 7700 cars. Price? 5 billion yuan ($US689 million). Six are said to be on order, with option for two more.