Photo: Frederic J. Brown (Getty Images)
Good morning! It’s Thursday, October 19, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Keep Waiting For The Cybertruck
To the surprise of no one who is paying attention, mass production of Tesla’s Cybertruck has been kicked down the road once again. CEO Elon Musk made the announcement about the stainless steel electric pickup truck during a Q3 earnings call. He was pretty much bracing folks waiting for the truck for a long and difficult ramp up at the Texas factory even though the official launch event is set for November 30.
“I’ve driven the car, and it’s an amazing product,” Musk said during the call. “I do want to emphasize that there will be enormous challenges in reaching volume production.” From Automotive News:
He said pickup production should reach a quarter of a million annually by 2025, and said there are around 1 million reservations for the Cybertruck.
Tesla has yet to announce final pricing for the pickup. Musk said the automaker is trying to make it affordable but that it’s loaded with new technologies, making cost a challenge.
Musk reiterated Tesla’s guidance to produce 1.8 million vehicles this year, but he wavered during the earnings call on whether the company remained committed to achieving 50 percent global volume growth annually for the foreseeable future. He did say he expects Tesla to grow faster than any other car company on Earth “by far.”
In its third-quarter financial statement after the market close Wednesday, Tesla said its gross margin shrank from a year earlier as it slashed prices to boost demand in the face of higher interest rates. The company reported a gross margin of 17.9 percent compared with 25.1 percent a year earlier. In the second quarter, Tesla posted a gross margin of 18.2 percent.
Since the beginning of the year, Tesla has been focused on big time price cuts to keep interest in its aging fleet of vehicles high. It sort of worked.
Third-quarter net profit fell 44 percent to $1.9 billion while revenue in the quarter rose 9 percent to $23.35 billion, the slowest pace of growth in more than three years. Analysts had estimated $24.1 billion in revenue for the quarter.
Still, the automaker’s adjusted profit margin was reportedly just about in line with expectations, at a tick under 18 percent.
Anyway, as I’m sure you already know, the Cybertruck has been delayed right around 10,000 times since it was first set to his the streets about two years aog. Right on schedule, Elon. Right on schedule.
2nd Gear: Stellantis, China’s Dongfeng Deep Ties
Stellantis and Dongfeng said on October 19 that the automakers are expanding their vehicle and component export business through an asset sale to better take advantage of China’s exploding car market. From Reuters:
Under the asset transfer deal, Dongfeng will acquire land use-rights and buildings in Wuhan and Xiangyang from Dongfeng Peugeot Citroën Automobile (DPCA), its joint venture with Stellantis, for 1.71 billion yuan ($233.69 million).
China’s auto market, the world’s largest, is on track to reach nearly 25 million vehicles in sales this year with overall growth of about 3%, and the share of EVs and plug-ins is rising fast.
Last month, Honda Motor Co said its Chinese unit will establish a joint venture with Dongfeng and Guangzhou Automobile Group to procure batteries for fully electric vehicles.
“After the acquisition, the company and Stellantis will further deepen their cooperation to support DPCA’s continued production of its existing Peugeot and Citroen as well as Fukang models,” a spokesperson for Dongfeng said in a statement.
Stellantis said it will support the joint venture in exporting Peugeot 4008 and Peugeot 5008 models to ASEAN countries, and Citroen C5X model to Europe.
Reuters says the acquisition will help Dongfeng consolidate its in-house new energy passenger vehicle business. The Hong Kong-based company reportedly made that statement in a stock exchange filing.
3rd Gear: Honda Robotaxis Heading To Tokyo (With GM’s Help)
Honda is planning to start its own self-driving taxi service in Tokyo by early 2026. It’s a move that could help alleviate a shortage of cab drivers in the incredibly dense city. The Japanese automaker has apparently been developing autonomous vehicles with the help of General Motor’s Cruise. It’s a company famous for making a mess of traffic in a number of U.S. cities, especially San Francisco.
It’ll start off with dozens of vehicles in central Tokyo. The goal is reportedly to expand to over 500 vehicles before eventually taking the service called “Cruise Origin” to other areas, Honda’s CEO Toshihiro Mibe said on October 19. From Bloomberg:
The boxy vehicle, which can carry up to six passengers, won’t have a driver’s seat or steering wheel, allowing riders to sit facing each other in a cabin-like space that can be used for meetings on-the-go. It will be displayed at the Japan Mobility Show, which starts later this month.
Autonomous taxis could help address one of the key issues facing the industry in Japan: a shortage of drivers, after more than 10,000 drivers left the industry during the pandemic. They also offer a driving solution to people with disabilities and an aging population, said GM CEO Mary Barra, who joined the event via video link.
“We have been designing Cruise Origin thinking its usage is not only to transport people, but also objects, and want to expand its usability,” Mibe said at the event, held at Honda’s Tokyo headquarters, adding that the three companies are looking to collaborate with transportation operators.
Japan lags behind countries like the US and China when it comes to autonomous driving. So far, there’s only one town with vehicles featuring level-4 capabilities — defined when they can handle all driving tasks but only under specific conditions with the option for humans to take over. Even then, the seven-seater golf carts are only allowed to navigate a 2 kilometer (1.2 mile) course. Maximum speed: 12 kilometers per hour.
[…]
As for the challenges of left-hand driving in Japan and Tokyo’s narrow roads that may lead to collisions, Cruise CEO Kyle Vogt said safety is the first priority and the company has been continuing to refine the technology in the US. The robotaxis were involved in a series of safety incidents, including a collision with a firetruck that injured one of its customers.
Honda introduced Japan’s first level-3 autonomous passenger cars in 2021, but only offered 100 of the upgraded Legend sedans at 11 million yen ($73,400) apiece. At level-3, vehicles can perform most tasks, but humans are still required to take over when necessary.
Back in April of this year, Japan introduced revised traffic laws that allow for level-4 fully automated driving on public roads under certain conditions, and they still require remote monitoring. This latest venture from Honda and GM will have to get approval because the vehicle won’t have a driver’s seat.
4th Gear: Chinese Tesla Supplier Spend Big Money In Mexico
Two Chinese Tesla suppliers are investing nearly $1 billion in Nuevo Leon, a northern Mexican state, where the automaker is planning to build a new factory. That’s according to Samuel Garcia, the state’s Governor.
The planned investments will include $700 million from Ningbo Tuopu Group and $260 million from Hesai Technologies. From Reuters:
Tesla announced in March it would build a large plant in the state, where it already has suppliers, in what Mexican officials described as a more than $5 billion investment. Speaking in a video filmed at Tesla’s Shanghai factory, Garcia said Ningbo Tuopu Group was looking to begin production by the end of the year in Nuevo Leon.
[…]
Ningbo Tuopu Group develops shock absorption products and other auto parts, while Hesai Technology makes lidar light sensors for applications like autonomous vehicles and robots.
Ningbo is expected to create some 10,000 jobs, and Hesai, up to 4,000, Nuevo Leon officials said.
[…]
“We’re very happy because everything seems to indicate that the Nuevo Leon site will be twice as big, at least, as the one in Austin,” Garcia said, noting that Tesla already sources batteries, software, computers and other parts from Nuevo Leon.
Tesla is yet to begin construction in Nuevo Leon, and honestly its timeline for starting production is still pretty unclear. Depending on what happens, these suppliers may be putting the cart in front of the horse, but I suppose only time will tell.
Reverse: Oh, Johnny Baby. What Are You Doing?
Neutral: My Ceiling Is Not Having A Good Week
Photo: Andy Kalmowitz / Jalopnik
Water starting raining down from above. Now there are two large holes in my bathroom ceiling. Luckily, the maintenance guy has covered them in cardboard and let me know someone will fix it eventually.
On The Radio: Paul Simon – “You Can Call Me Al”
Keyword: Tesla Pushes Back Cybertruck Production Date Again