Will Arrival Depart? (11/7/22)

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Now to the news:

In today's newsletter:⚡ The Headline: More EV highlights from quarterly earnings reports 🚨  Making News: Arrival's troubles mount, Lucid v. Texas, Polestar investment     🇪🇺   Europe Electrified: Britishvolt lifeline, CALB in Portugal, Zeekr coming to Europe🧧  China Report: BYD breaks another record, Tesla store moves, NIO Covid disruptions🔋   Supplier Supercharge: UAW eyes Ultium, Panasonic in Kansas, BMW suppliers

Bonus: Check out Sean O'Kane's in-depth Bloomberg story on Faraday Future: Chinese Tycoon Spent 8 Years, $3 Billion on EV That Went Unbuilt

⚡ EV Earnings ⚡

Nikola Says Deliveries to Fall Short of Plans. Nikola said deliveries of its electric trucks will fall short of expectations due to worsening economic conditions. The company will hand over fewer than the 300 units this year. However, quarterly sales and earnings beat Wall Street’s estimates. Nikola posted revenue of $24.2 million, beating analysts’ expectations of $22.3 million.

Fisker collects 62k reservations and plans 42k units in 2023. Fisker said it remains on schedule to start production of its flagship Ocean SUV on November 17. It reported over 62,000 reservations ahead of a four phase production plan that is expected to produce 42,400 units by the end of 2023. Fisker also shared a progress report of its second EV – the PEAR.

BMW EV sales double YOY, boosting Q3 earnings beat. BMW delivered 128,195 EVs in Q3, up 114.8% over the same period last year. The company noted rising demand for its I3, IX, I4 and Mini Cooper SE. The BMW I3 EV sedan recently launched in China, where EV sales continue to gain momentum. BMW reached record revenue of $36.3 billion in the quarter. The company will launch its first electric seven series, the BMW I7, in November, and the I5 will follow in 2023. 

Coming up this week: Lucid Motors (11/8), Canoo (11/9), Rivian (11/9), NIO (11/10)

🚨 Making News 🚨

Arrival’s troubles mount with Nasdaq notice, van delay and vehicle fire. EV startup Arrival announced that it has received a non-compliance letter from the Nasdaq Stock Market LLC, informing the company that the closing bid price has been below the minimum $1.00 per share for at least consecutive 30 days. It now has until May to meet the minimum bid requirement to avoid being delisted on the stock market. Leaks from employees also covered a number of setbacks, including a potential delay of several years for its first saleable van, a vehicle fire during a demonstration to customer UPS and a distracting secret jet project. 

Lucid Motors sues Texas to overturn direct sales ban. In a suit filed in Austin, Lucid Motors accused the state of Texas of acting anti-competitively by forcing vehicle sales through dealerships. Lucid said: “That tight and fast feedback loop, and the benefits it brings to Lucid’s customers, would be impossible with third-party dealers interposed between Lucid and consumers.”

Japan and South Korean work to qualify EVs for US tax credits. A report from the Kyodo news agency suggests that Japan will submit a request for added “flexibility” in the US EV tax credit for foreign automakers. The country intends to: “Make nearly completed cars exported from Japan eligible for the tax credits as long as the final process takes place in the United States, Canada, or Mexico.” It will also ask for the country to be included in the critical mineral tax requirements. At the same time, South Korea is seeking a three-year grace period on U.S. law.

Mercedes announces EQE pricing for U.S., starting at $74,900. 14 months after officially unveiling its all-electric EQE sedan, Mercedes-Benz has shared U.S. pricing before deliveries begin this fall. The EQE will come in three different versions, each with varying trims to choose from, starting at an MSRP of $74,900. The vehicle is expected to have 305 miles of range.

EV maker Polestar gets $1.6 billion from major shareholders. Volvo Car, which co-founded Polestar with Geely back in 2017, said it would provide an $800 million loan. PSD Investment, another major shareholder, will provide the same amount, Polestar said. The Sweden-based carmaker said that the funding, alongside previously secured resources, would provide the company with sufficient funds through 2023.

Lucid Motors to unveil full lineup, including Air Pure sedan. The entry-level Lucid Air Pure, priced at $87,400 is intended to compete with Tesla's Model S and Mercedes-Benz's EQS. The vehicle will be launched at an online event Nov. 15 prior to the Los Angeles auto show. "The online event will also feature exciting announcements about the Lucid business and future models, including the Project Gravity SUV that reimagines the luxury SUV with the same in-house-developed technology that underpins the groundbreaking Lucid Air."

Nissan may quit Renault deal over technology sharing with Geely. Nissan is willing to walk away from a deal with Renault to re-balance their alliance amid concerns that the French carmaker might license hundreds of jointly developed patented technologies to other players, including Chinese partner Geely. Mitsubishi is now considering a stake in the Renault EV spinoff, as the Japanese company made a strong recovery in the latest quarter.

Nissan overwhelmed by demand for new Sakura EV in Japan. According to a report by Reuters, Nissan was forced to stop taking orders after the waiting period for a production model grew to over a year-long. The Sakura starts at 2,333,100 yen ($15,743.76) and benefits from numerous tax advantages from the Japanese government.

Tesla developing EV operation near Detroit. Tesla has started work near Southfield, MI to create a 34,500-square-foot property, said Terry Croad, Southfield's planning director. "I've been told (by Tesla representatives) that it's the first one in Michigan and the next closest one is Chicago. It's supposed to be able to handle 60 to 80 customers a week. There's gonna be a lot of software updates. It's not going to be your grandfather's bump shop because of the sophistication of the chips and software. This is unique."

Subaru struggles to compete with McDonald's on wages. Subaru said it is struggling to compete with McDonald's on wages and noted that soaring U.S. labor costs will halt new investments. It said U.S. inflation is so bad that the automaker has trouble competing on wages with the local McDonald’s outside its Indiana assembly plant. “In Indiana, part-time workers at McDonald’s earn $20 to $25 per hour, which is in competition with what temporary workers make at our plant,” CEO Tomomi Nakamura said. “If we were to build a new plant, it would be very difficult to hire new people for that."

Tesla sends China plant workers to California to boost production. Tesla will dispatch staff to assist efforts to increase output in Fremont. The same crew were responsible for upgrading Tesla's Shanghai factory, which delivered a record 83,135 cars in China in September. The upgrade at the plant took about five weeks and occurred over the summer. The improvements have helped to double the factory's annual capacity to around 1 million vehicles, per Bloomberg. Fremont can currently produce about 650,000 cars per year.

Foxconn partners with Saudi Wealth Fund to build EVs. The pair will establish a JV called Ceer that will license component technology from Germany’s BMW and design and build vehicles including sedans and sport utility vehicles in Saudi Arabia. The first models are scheduled for 2025, according to a statement from the PIF.

🇪🇺 Europe Electrified 🇪🇺

EV Battery Startup Britishvolt lands temporary lifeline. Britishvolt said that it has secured a funding lifeline following reports that it was on the brink of entering administration. The company, which previously gained backing from mining giant Glencore, has been a key part of the UK’s ambition to build facilities capable of providing batteries for millions of EVs. The company has yet to secure funding to build its cell factory.

Hyundai converts core Kia plant to mass-produce EVs. Hyundai Motor Group announced that it will mass-produce EVs at Kia Autoland Slovakia, one of its core plants. Hyundai and Kia EVs are currently built at a factory in Indonesia and a joint facility in South Korea that also produces ICE cars. The Slovakia plant has an annual production capacity of 330,000 units and produces the Ceed.

Wallbox and Uber extend partnership on home charging. Drivers on the Uber platform in seven European countries can now purchase discounted home EV chargers, as Wallbox and Uber expand their partnership across the continent. The partnership, which will operate in the UK, Germany, The Netherlands, Spain, France, Portugal and Belgium, builds on Wallbox and Uber’s partnership in the USA and Canada that was successfully launched in 2021.

China’s CALB to build Europe industry base in Portugal. Chinese battery maker CALB inked a memorandum of understanding with the government of Portugal on November 2 to launch its Europe industry base in the country, the company announced via its WeChat account. The new project will be set up in an industrial estate close to the Port of Sines, Europe’s second largest deep water port, which is capable of round-the-clock operations and the only port in Portugal that allows the world’s largest container ship.

Geely's premium Zeekr brand plans EV sales in Europe in 2023. Geely's premium EV business plans to sell its vehicles in Europe next year, Zeekr's CEO said. Zeekr joins a growing list of Chinese automakers looking to launch or expand sales of EVs in Europe next year, including BYD, Xpeng and Great Wall Motors. Geely is the owner of Volvo and Polestar and is an investor in Mercedes-Benz.

🧧 China Report 🧧 

BYD achieves highest-ever monthly auto sales in October. BYD saw its monthly auto sales hit a new high of 217,816 units in October, surging 142.19% over the same period last year, according to the company's latest monthly sales results.

Tesla closes its first showroom in China. Tesla confirmed the closure in Beijing's upscale Parkview Green shopping center, according to Reuters. Tesla said it had relocated the store to another mall called Raffles City. Tesla plans to put more emphasis on stores in less-costly suburban locations that can also provide repairs as the company works to improve service for customers.

Tesla price cuts are causing cancellations for China EV brands. According to Citi analyst Jeff Chung, Tesla's price cuts have led to “significant order cancellations” for other EV brands. "We sense Tesla’s recent price cut strategy has created a negative spill-over effect where a lot of China EV brands’ order backlog has suffered significant order cancellations according to our dealership channel checks." 

NIO EV deliveries climbed 174% YOY in October, but hampered by Covid disruptions. Chinese EV leader NIO reported 10,059 deliveries in October. While up over 174% from October last year, the number was below September deliveries. NIO said that Covid disruptions in Hefei, where it manufactures its EVs, cost it 7,000 units of production and 5,000 deliveries for the month.

CATL expands deal with Vinfast to provide skateboard chassis for EVs. Global battery giant CATL and Vietnamese EV automaker Vinfast announced the signing of a memorandum of understanding to expand upon their current battery supply agreement. With this new “strategic cooperation,” the companies will explore CIIC skateboard platforms for EVs and “other areas” surrounding EV and battery technology. With first deliveries of its flagship VF 8 EVs underway, Vinfast looks to expand its relationship with CATL to develop, implement, and promote future battery technologies.

Honda launches new EV model in China. Honda unveiled the second model of its new China-only EV lineup on Saturday, targeting the fast-growing, battery-driven car segment in the world’s largest auto market. The Japanese automaker said last year that it planned to roll out EV models under a new brand called “e:N Series” over the next five years with partners GAC and Dongfeng Motor.

Tesla ships 71,704 China-made EVs in October. Tesla delivered 71,704 China-made EVs in October, down 14% from a record high in the previous month, according to a report released on Thursday by the China Passenger Car Association (CPCA). The U.S. EV maker delivered 83,135 cars in September. Tesla was the second best-selling EV maker in China last month after BYD, which shipped 217,518 cars.

Radar RD6 Electric Pickup To Launch On November 9 In China. The Geely Radar RD6, will be officially launched on November 9, according to Geely. Pre-sale has already started with a price of 180,000 RMB ($24,600). The Radar brand will launch at least four other new cars in the near future: an SUV, a sedan-coupe-pickup truck, a large SUV, and an ATV.

🔋 Supplier Supercharge 🔋

UAW seeks to represent GM battery joint venture workers. The UAW said it had filed a petition with the National Labor Relations Board on behalf of approximately 900 workers. "By refusing to recognize their majority will, Ultium – which is a joint venture between General Motors and LG Energy Solution – has decided to ignore democracy and delay the recognition process," UAW President Ray Curry said in a statement.

Panasonic to start building Kansas battery plant next month. Panasonic will start building its new battery plant in Kansas in November and aims to begin mass production by March 2025. The site will supply batteries primarily to Tesla. Panasonic said in a statement that it expects initial production capacity of 30 gigawatt hours per year, equivalent to roughly 60 percent of the company's current annual EV battery production capacity in Japan and the U.S. Kansas officials said the factory would create up to 4,000 jobs with an investment of up to $4 billion.

BMW wants existing suppliers to provide the parts for EVs. Overseeing the supplier ecosystem is the job of Joachim Post, a 20-year BMW veteran and head of procurement and supply chain. Post helps ensure that 30 million parts reach the company's worldwide production hubs daily. BMW believes that using the existing supplier base is essential because those companies have the know-how.

BorgWarner eyes U.S. manufacturing expansion. The company expects its electrification business to generate about $4 billion by 2025. It expects 2022 EV revenue to grow to approximately $850 million, more than double 2021 but still a small fraction of the overall business. It aims to bring EV revenue to 45 percent of overall sales by 2030, up from less than 3 percent last year.