Elon Musk cut nine percent off the price of a new Tesla, but only if it’s one made and sold in China; Hyundai wants you to know that it’s a luxury carmaker now; and the U.S. is gonna need to mine a whole lot more lithium for all these upcoming EVs. All this and more in The Morning Shift for Monday, October 24, 2022.
We’re always moaning about the lack of an affordable electric vehicle and the cost of cars, on the whole, going up and up. But, after incrementally hiking the prices of its cars for years, Tesla has started lowering them again - but there’s a catch.
According to Bloomberg, Tesla is chopping up to nine percent off the cars it makes and sells, but only in China. Bloomberg reports:
Tesla Inc. lowered prices across its lineup in China, looking to stoke demand in a market where competitive and economic pressures are intensifying.
The carmaker cut the cost of the cheapest locally built Model 3 sedan by 5% to 265,900 yuan ($36,774), Tesla’s website showed Monday. The company dropped the starting price of the Model Y SUV by 8.8% to 288,900 yuan.
The cuts only apply to the Model 3 and Model Y cars produced in China, but include Performance, Rear-Wheel-Drive and Long-Range variants. The firm attributes the price cut to “improved utilization of the company’s Shanghai factory and “relative stability” of the supply chain.”
Here in the U.S., there has so far been no such cut. The Model 3 still starts at $48,490 and the Y is offered from $67,990.
Toyota likes to remind everyone that it was one of the first companies to mass-produce a hybrid car. The Prius, when it launched in 2000, quickly won the hearts of many eco-conscious drivers and now continues to do so with its fourth generation.
But times have changed, and drivers worried about their environmental impact have sold off their Prius (Prii, Priuses?) and switched to EVs. Toyota, however, didn’t get that memo so has appeared reluctant to make the switch to battery-powered cars. Now, the company is trying to rectify this with a new approach to electrification. Reuters reports:
The proposals under review, if adopted, would amount to a dramatic shift for Toyota and rewrite the $38-billion EV rollout plan the Japanese automaker announced last year to better compete with the likes of Tesla.
A working group within Toyota has been charged with outlining plans by early next year for improvements to its existing EV platform or for a new architecture, the four individuals said.
While the proposals are scrutinized, Toyota has reportedly suspended work on some of the 30 EV projects announced in December, which Reuters reports could include the Toyota Compact Cruiser crossover and the battery-electric Crown.
So Toyota is delaying EVs while it decides how it wants to roll out EVs. That definitely sounds like the behavior of a company committed to making EVs.
Car maker of the moment, Hyundai, cut its teeth making affordable cars that offer something for everyone. But now, the Korean automaker wants you to know that it’s serious about something, and that something is luxury EVs.
That’s right, Bloomberg reports that Hyundai is switching its focus to high-growth segments such “luxury models, SUVs and electric vehicles” as it targets “record-high earnings.” The announcement came after the automaker missed its sales and earnings targets for the third quarter of 2022. According to Bloomberg:
Hyundai cut its 2022 sales target to 4.01 million vehicles from 4.32 million, and also trimmed its planned investment for the year to 8.9 trillion won from 9.2 trillion won.
The company said it will ‘focus on the recovery of sales’ through a plan that will ‘enhance its product mix with SUVs and luxury models.’ Its Grandeur EV, named Azera in markets outside Korea, is in high demand following its launch this month and will help spur domestic sales momentum, Hyundai said. The Ioniq 6, introduced in Korea in the third quarter, is also selling well, it said.
Despite struggles for its global sales, Hyundai did have a pretty good third quarter stateside. Sales increased three percent compared with the same period last year.
But if Hyundai and other legacy automakers want to switch to focus on electric vehicles, they’re going to need more supplies, a lot more supplies. Chief among those supplies are all the components required to make bigger batteries, including lithium.
Here in the U.S., miners extract roughly 1,000 tons of lithium each year —accounting for just one percent of global lithium production. But, after the Inflation Reduction Act added stipulations for EVs made with components sourced and assembled here in America, that output is going to need to rise dramatically.
According to Automotive News, the electric car industry needs “about 50 more lithium mines” to open around the world to keep up with demand. Steps are being taken to try and ramp up lithium production to meet the demands for Evs, as Automotive News reports:
Over the past year and a half, the Biden administration has been attempting to answer that question by spurring more domestic mining and processing of critical battery materials, both of which are dominated by China and other nations. This year, the administration invoked the 1950 Defense Production Act to encourage companies to mine lithium, nickel, graphite, cobalt and manganese domestically, allowing companies access to federal funding to do so.
That followed the approval of $6 billion aimed at boosting the U.S. battery supply chain, part of last year’s bipartisan infrastructure bill. It preceded the passage of the Inflation Reduction Act, which included incentives for companies to manufacture EVs and batteries in the U.S. and created local sourcing requirements for vehicles to qualify for EV tax credits.
But, the site warns that new mines face a raft of hurdles before they can get up and running. Chief among them is the way the U.S. hands out mining permits for companies hoping to extract lithium from the Earth.
This, it warns, can mean it takes up to a decade to open a new lithium mine here in America. And if this process can’t be streamlined, we may soon be talking about a lithium shortage as well as a chip shortage, aluminum shortage, and titanium shortage.
Another week, another flying taxi prototype that’s definitely going to exist. The world’s rich and powerful seem obsessed with the idea of zipping around cities in personal quadcopters that they like to pretend are flying cars. Now, there’s a new one that promises that it will actually make it to production, maybe.
A company called Archer Aviation claims it will build 250 battery-electric air taxis in 2025, before moving to scale up production in the following years. Reuters reports that the firm hopes to have its craft certified to fly before all this, with sights set on 2024 for that milestone.
When this, and all the other drawings of aircraft go into production, the electric flying taxi market, or whatever people want to call it, is set to be a pretty crowded space. As Reuters reports:
“Once certified, the California-based start-up’s electric Vertical Take-Off and Landing aircraft will compete in a crowded market with dozens of other developers such as Joby Aviation Inc and Vertical Aerospace Ltd vying to revamp urban transportation.
“The nascent sector, which is backed by industrial heavyweights such as Toyota Motor Corp and Delta Air Lines, still faces significant challenges relating to certification, developing a suitable air traffic management system and battery technology improvements, among others.”
I, and many other people remain unconvinced by all these personal flying machines. Will they ever make it to market? And, if they do, will the rules and regulations governing flying around cities adapt quickly enough to keep up?
How was your weekend? I hope it was nice! I spent mine dog-sitting and listening to the new Arctic Monkeys album, which coincidentally is called The Car. By my count, there are four tracks on there that talk about cars, and that seems like enough to warrant a mention here. Go listen; it’s perfect.