Weekly Newsletter Issue #4

Good morning, happy Monday, and welcome to the fourth issue of the EVDigest's weekly newsletter covering the business and policy of EVs. 

In today's newsletter:⚡ Headline: Volkswagen and Mercedes Look to Canada for Battery Materials  🚨 In Other News: Rivian R1S, new Panasonic plant, Lucid hires, and more🇨🇳 The China Report: Dongfeng's new brand, Zeekr IPO, Huawei sounds the alarm🗓️  Last Week Today: Other EV news you might have missed

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Volkswagen and Mercedes Ink Strategic Materials Agreement with Canada

Heating up the race for raw materials, Volkswagen and Mercedes-Benz struck battery materials cooperation agreements with Canada last week to secure access to lithium, nickel and cobalt. 

Present at the signing ceremony were outgoing VW Group CEO Herbert Deiss; Mercedes-Benz CTO Markus Schaefer; German Chancellor Olaf Scholz; Canada's Minister of Innovation, Science and Industry Francois-Philippe Champagne; and Canadian Prime Minister Justin Trudeau.

No doubt accelerated by new rules set by The Inflation Reduction act that include North American mineral content requirements for EV tax credit eligibility, the deal is also designed to shorten supply chains for facilities in the U.S. and avoid difficulties linked to tariffs and tax regulations. 

The agreements will support Volkswagen's plans to launch more than 25 EVs in North America. It is also considering an in-house battery cell manufacturing operation in the region, according to VW North America COO, Johan De Nysschen.

Mercedes also said that it is exploring a strategic partnership with Rock Tech Lithium, which has operations in both Canada and Germany. An agreement would have Mercedes acquiring an annual supply of up to 10,000 tons of lithium hydroxide from 2026 onwards.

🚨 In Other News 🚨

Rivian ($RIVN) starts customer deliveries of its R1S SUV. The first two units from the Normal, IL factory went to CEO RJ and CFO Claire McDonough back in December. The more recent deliveries are the first to non-employee customers.

Mercedes rolls out first EVs from U.S. Plant. The full-size, electric EQS SUV is the first EV to roll out of Mercedes' 6 million square foot Vance, AL facility. It qualifies for the $7,500 tax credit through Dec. 31. Early next year, the plant will begin producing the EQE, the top-selling version of the midsize crossover GLE. The company expects to produce 100,000 EQEs at Vance next year and could switch the plant to all-electric vehicle production as early as 2025.

Panasonic plans additional $4bn U.S. EV Battery Plant. The news comes as EV makers boost production and wait times increase for many popular EV models. Panasonic already jointly operates a battery plant with Tesla in Nevada. Reports suggested Oklahoma as the likely location for the new plant. In July, Panasonic announced plans for a similar facility in Kansas. Both locations would be conveniently near Tesla's Gigafactory Texas and Canoo's planned Oklahoma facility.

Lucid ($LCID) Hires Apple Software Veteran Amid Bumpy Air Rollout. Derrick Carty joins as Vice President of Platform Software Engineering, with responsibility for advanced driving assistance systems, audio, embedded software, and systems architecture. He brings 23 years of experience at Apple and now reports to Lucid SVP of Digital, Michael Bell.

Redwood Materials Plans Major Nevada Expansion. The company has acquired an additional 74 acres within the Tahoe-Reno Industrial Center. Founded by Tesla co-founder and former CTO, JB Straubel in 2017, Redwood currently has partnerships with Tesla, Panasonic, Ford and Toyota.

Ford ($F) to cut 3,000 jobs amid shift to EVs. Ford will use the boosted profits to fund its $50bn planned spending on EVs as the company prepares for its operational split into two divisions: Ford Blue (traditional ICE) and Ford Model e (EVs). The cuts are for 2,000 salaried and 1,000 agency jobs across the U.S., Canada and India.

Ford ($F) reopens Mustang Mach-E order banks, with increased prices. Ford said it was adjusting the MSRP on the Mach-E "due to significant material const increases, continued strain on key supply chains, and rapidly evolving market conditions." The price hikes are up to $8,100 depending on the model. Shipping cost was also raised by $200. 

XOS Trucks ($XOS) loses manufacturing chief. According to a report by Insider, SVP of Manufacturing, Dag Reckhorn plans to leave the company by the end of the month. Reckhorn previously held manufacturing roles at Faraday Future ($FFIE) and Tesla ($TSLA). The news comes as XOS, like many other OEMs, has cut full-year delivery guidance, from 2,000 to around 300 units. 

🇨🇳 The China Report 🇨🇳

Dongfeng unveils new brand, M Hero, and it can crab walk. China's second-largest automotive state-owned enterprise unveiled two concept vehicles for its new off-road brand. The first vehicle is expected to begin production in 2023. BYD will be at its heels, as it plans to unveil its own premium off-road EV later this year. The M Hero certainly shows Dongfeng's military DNA.

CATL Signs Agreement with Zeekr for 1,000km-Range Qilin batteries. The five-year strategic cooperation agreement makes Zeekr, a premium EV brand of Geely, the first car brand to use the new Qilin batteries. The batteries are based on CATL's third-generation CTP technology, and the company claims the Qilin can deliver 13% more power than Tesla's 4680 battery.

Ex-Apple employee pleads guilty to stealing trade secrets before joining Xpeng ($XPEV). The case, which began in July 2018, has come to a close with former Apple employee Xiaolang Zhang pleading guilty to stealing confidential information. In a Weibo post, Xpeng denied any knowledge of case details and said it had no involvement with U.S. authorities or any related dispute with Apple.

Xiaomi in talks with BAIC for EV Production. The smartphone company may produce co-branded EVs built by Beijing Automotive Group Co. A tie-up could help Xiaomi keep its promise of delivering vehicles by 2024. The two parties are exploring different options, including Xiaomi buying a stake in Beijing Hyundai No. 2 plant, which is fully licensed for production in China. 

Zeekr, Geely's Premium EV Brand, Exploring IPO. The EV maker is considering the U.S. and Hong Kong, among other options. It hasn't decided on an IPO size but has asked investment banks for proposals. Last year, Zeekr raised around $500m at a $9bn valuation in a round led by Intel Capital, with CATL, Bilibili and Boyu Capital participating. Zeekr recently released more images of its future model, the Zeekr 009.

Huawei-backed AITO begins M7 deliveries while Huawei founder sounds the alarms. The EV brand is a joint effort between Huawei and Seres Group, a subsidiary of Sokon Group. The M7, AITO's second model, was launched at a ceremony in Chongqing led by Seres Chairman Zhang Xinghai and Huawei Managing Director Richard Yu. Meanwhile, Huawei founder Ren Zhengfei sent a letter to employees warning that there will be "no bright spot in the world" for the next three to five years, and to telling them to prepare for a painful historical period as the global economy declines. The letter led to the following meme becoming the most popular post on Chinese social media:

🗓️ Last Week Today 🗓️

• Arrival ($ARVL) is still stuck at the starting line. When the UK-based EV company was preparing for its SPAC merger, it told investors to expect revenues of $1bn in 2022. That number will be closer to zero.

• NIO ($NIO) sets sail for Europe. The first batch of ET7s were loaded onto three ships for delivery to Germany, the Netherlands, Denmark, Sweden and Norway. Meanwhile, first-production ET5s rolled off the line at NIO’s NeoPark plant in Hefei.

• CATL’s profit surges in Q2. Gross revenue rose 156% over last year to more than $9bn. Profit jumped 82% to $1.2bn. Shares have gained about 50% since May lows following recent wins, including a deal with Mercedes and plans for a factory in Hungary.

• California votes to ban ICE car sales in 2035. The California Air Resources Board passed the Advanced Clean Cars II proposal. It's a big win for Tesla ($TSLA), whose Model Y is the best-selling new car in California this year. It says CARB is too slow.

• Fisker ($FSR) looks to expand production. Fisker says that larger than expected demand has it looking to expand production, maybe in the U.S. starting in 2024. Current annual production numbers are 50k. The Ocean has more than 58k reservations.

• Canoo ($GOEV) hits the streets with Walmart. With the ink not yet dry on that 4,500 LDV purchase agreement, Canoo’s vehicles have been out for testing, running deliveries in Dallas for Walmart.

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