VW and Ford are worried about batteries, Volvo is affected by a bottleneck in the chain, GM’s Mary Barra believes next year will be much bigger and things are getting better for Tesla. All this and more in The Morning Shift on July 21, 2020.
We’re hearing about a dispute between South Korean battery manufacturer LG Chem and its rival SK Innovation for some time. LG accuses SK Innovation of stealing industry secrets and, in February, a U.S. industry panel, in an initial failure, LG argued, with Reuters writing:
The so-called default ruling of the U.S. International Trade Commission (ITC) may mean that SK Innovation, as LG Chem wants, imports safe products, parts and battery fabrics that might want to supply its U.S. plants to Volkswagen and Ford.
In fact, VW and Ford are very connected to SK Innovation, as Reuters explains:
SK Innovation is the construction of a battery plant of approximately $1.7 billion in Georgia to serve Volkswagen’s electric vehicle plant in neighboring Tennessee, which is expected to begin production in 2022. The battery manufacturer is also contemplating some other plant in Georgia to get Ford’s electric vans.
Naturally, Volkswagen and Ford are not thrilled that LG has a drama with SK Innovation. VW has invested billions in its MEB electric car platform (which Ford borrows for its own vehicles), and Ford has an electric F-150 en route. (The Mustang Mach-E, which will go on sale later this year, uses LG pocket cells in case of curiosity). Both automakers are involved in the restriction of SK Innovation’s battery operations that can cause significant damage to Ford and VW EV plans.
Ford and VW, the International Trade Commission, will let SK Innovation continue to generate batteries: De Reuters:
The two automakers have asked the U.S. International Trade Commission (ITC) to allow SK Innovation to manufacture batteries at its proposed U.S. plant in Georgia for use in ford’s all-electric F-150 and other electric cars, Reuters reported.
[…]
“Any corrective order will have to aim to avoid collateral damage to SKI’s existing customers,” Volkswagen said in its public interest comments to the ITC in May.
VW calls for the possible disruption of the “catastrophic” source chain, and Ford says it believes LG could take over if SK Innovation’s battery operations were limited as a result of the dispute. From history:
“To avoid a catastrophic supply disruption,” the commission should allow SK Innovation to manufacture EV batteries in the U.S. facility, Volkswagen said in the May statement.
Ford said LG Chem’s statement that it can upgrade SK Innovation as a supplier is “credible” given the shortage of electric vehicle batteries and the long era of progression required for electric vehicles.
Ford makes it clear how much agreement there is in a statement:
“The threat to such jobs in the United States is unacceptable because of the existing economic situations caused by COVID-19,” Ford said in his public interest comments to the ITC.
We’ll see a final resolution on the matter in October.
Energized by
One of the trickiest elements that automakers have faced as they’ve attempted to get back on their feet following COVID-induced plant closures and reduced vehicle demand has been maintaining a steady supply chain.
Although the automatic meeting takes position in a centralized location, the portions sent to the factories to build the cars come from states and countries, possibly at other stages of their COVID-19 crisis. When you have portions of put with a variable number of new COVID instances and different government regulations on how to prevent the spread of the disease, things can get complicated.
Mexico is one of the main bottlenecks. Earlier this month, Automotive News reported that the state of Chihuahua restricted the comforts of auto suppliers to only 50% of its same capacity of old paints. This caused a number of disruptions for Ford, the news site that quotes Ford’s president for the Americas and the foreign market group, Kumar Galhotra, saying: “Due to COVID-19, the State of Chihuahua in Mexico has limited the participation of painters to 50%, a region of which we have several suppliers. Matrix. With our plants in the United States operating 100%, it is not sustainable.
Volvo also has disruptions to the same media they have written about chain disorders in Mexico in its new short story “Volvo’s US plant has been affected by a shortage of portions in Mexico, a low demand for sedans. Specifically, Ridgeville, South Carolina plant has been inactive for some time. From Automotive News:
Volvo aims to restart its U.S. plant “within weeks,” CEO Hakan Samuelsson, who attributed the prolonged closure to two key factors.
“First, there are interruptions in Mexico’s spare parts source. But it’s also a source and a challenge for the S60. There is a market trend towards SUVs,” Samuelsson told Automotive News Europe.
[…]
Volvo closed its plant in Ridgeville, S.C., near Charleston, on March 26 and resumed production on May 11. The plant closed in June due to outages at the source, the automaker said in its first-half monetary report.
On Wednesday, Tesla will reveal its second quarter earnings report, and many others are thrilled that the company made impressively in the first quarter, specifically due to COVID-19 closures. From the Wall Street Journal:
A positive results report would mark the first time Tesla, 17, has declared 4 consecutive quarters of profit and would qualify it to be in sp 500. The inclusion in the prestigious benchmark of U.S. stocks would inspire the index budget to come with the company’s holdings in its holdings.
Some analysts think Tesla will eventually suffer a quarterly loss, but it probably isn’t as bad as it could have been:
Monday’s consensus estimate for a quarterly loss, however, has declined in recent weeks and would be a noticeable improvement year after year. Analysts surveyed through FactSet on average expect Tesla to lose $228 million in the quarter; on an adjusted basis, a loss of 14 cents is expected to be consistent with a consistent percentage. By comparison, analysts had predicted an adjusted loss consistent with a consistent percentage of $1.43 by the end of May, following the closure of the company’s California meeting facility for several weeks and a $408 million loss in last year’s quarter.
Others think Tesla will make a profit, basically because of tax credits:
Brian Johnson, of Barclays PLC, is one of the analysts who now expects Tesla to make a profit in the second quarter. He told investors in a note that the cash the company gets from the sale of regulatory tax credits, which derives from the sale of electric vehicles, can contribute to this. The loans helped the company make a first-quarter profit of $16 million, while analysts expected a decline.
Thanks to its new meeting facility in Shanghai, the arrival of the Model Y SUV and the holidays (in addition to other cost-cutting measures), Tesla has succeeded in this crisis more than most, it seems, through the promotion of a respectable number of vehicles. difficult times From the news site:
Tesla said July 2 that it delivered 90,650 cars in the quarter, a 4.9% decline from last year’s quarter, well below the 24% decline expected by analysts due to the pandemic. The functionality was helped by Mr. Musk, who drove to return to California production in early May, and the company had as many cars delivered as you could imagine in the final weeks of June.
The industry in general has had the same success. Global sales may have fallen by 34% during the period, according to an estimate made by researcher LMC Automotive.
We’re leaving on Wednesday.
In an interview, Mary Barra told The Associated Press of her prediction for the recovery of the U.S. economy. From the Detroit Free Press:
Q: Do you think auto sales will be general again in the U.S. And all over the world?
A: We are seeing a recovery. We think it’s going to be a relatively short-lived recession. But we have a long way to go because we went to a pretty low base. The new outbreaks do pose potential setbacks, but we’re hopeful that the U.S. economy will be back to 90% of pre-pandemic levels early next year. There’s a lot of uncertainty.
“Relatively short-lived” and “90 consistent with the pre-pandemic grades penny early next year” seem to be good.
In a random history of Reuters (to be honest, it is classified as “raw material”), we are informed that the costs of platinum and palladium, two elements that are prominently discovered in car exhaust systems, namely catalytic converters, have decreased considerably due to relief in demand for automobiles as a result of COVID-19.
This is no massive surprise, as a drop in demand for cars will naturally increase the price of the ingredients that drive in cars, however, Reuters needs the world to know that those items will soon catch the price, writing:
Years of supply shortages have pushed palladium to record levels above $2,800 an ounce this year, while surpluses have kept platinum close to its lowest levels in several years.
Prices plummeted in March as the coronavirus stifled economic activity, since then it regained the flat when China recovered.
Palladium, which costs about $2070 an ounce on Tuesday, will charge an average of $2050 this year and $2,138 in 2021, according to the average result of a survey of 32 analysts and traders.
A survey in April projected averages of $2,100 this year and $2,150 in 2021.
Platinum, lately around $840 consistent with ounce, will have $832 this year and $913 in 2021. The survey three months ago projected $836 consistent with the ounce for 2020 and $945 by 2021.
So, for those of you who are thinking of going out with a portable saw to cut people’s catalytic pots, wait a little to make the most of your time. (Do not hack people’s catalytic converters).
By Guinness World Records:
Louis Emile Rigolly (France), Gobron-Brillié (internal combustion engine), reached a speed of 103,561 mph in Ostend, Belgium, on 21 July 1904.
The global is facing an economic crisis. Where are the electric vehicles? They are for automakers and consumers at a time when cash is exhausted. Will COVID-19 delay the adoption of electric vehicles?
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