Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the stories that you need to know if you need to live.
1st Gear: Tariffs Bad
The Toyota Camry is still the king of sedans, built in Georgetown, Kentucky. So you might think, at first blush, that it would be shielded from any potential tariffs on imported cars. You would be wrong, though, according to Toyota, which said yesterday that tariffs would lead to an $1,800 increase in the cost of new Camrys.
How’s that, you ask? It’s about parts, since 45 percent of the Camry’s parts are imported, parts that would cost more if the Trump administration slapped tariffs on them. Here’s more from Bloomberg:
“We are an exemplar of the manufacturing might of America,” the Japanese automaker said in an emailed statement, noting its 10 U.S. manufacturing plants. “A 25 percent tariff on automotive imports, which is just a tax on consumers, would increase the cost of every vehicle sold in the country. Even the Toyota Camry, the best-selling car in America, made in Georgetown, Kentucky, would face $1,800 in increased costs.”
The Commerce Department is looking into the national security implications of imported vehicles and components as part of a Section 232 investigation, the same type of probe that the Trump administration used to justify steel and aluminum tariffs. U.S.-built truck and car models like the Camry would be affected by the parts levies because all of them use at least some parts sourced from other countries.
2nd Gear: Tariffs Still Bad
Toyota isn’t the only automaker who says that car tariffs are bad. They’ve all been saying it for quite awhile, in fact. Still, they keep saying it.
A coalition representing major foreign automakers including Toyota Motor Corp, Volkswagen AG (VOWG_p.DE), BMW AG, and Hyundai Motor Co, said the tariffs would harm automakers and U.S. consumers. The administration in May launched an investigation into whether imported vehicles pose a national security threat and President Donald Trump has repeatedly threatened to quickly impose tariffs.
The group added: “Rather than creating jobs, these tariffs would result in the loss of hundreds of thousands of American jobs producing and selling cars, SUVs, trucks and auto parts.”
Bloomberg, meanwhile, had the money quote from the same report:
“America does not go to war in a Ford Fiesta,” the Association of Global Automakers said.
Meanwhile, let’s check in on the top stories over at Automotive News.
Ah, hmm, I detect a theme. Here’s a snippet from the Fiat Chrysler story:
A 25 percent tariff on imports would reduce Fiat Chrysler’s profits by up to 743 million euros ($866 million) annually, according to analysts Evercore ISI.
This figure is the worst-case scenario following Trump’s threat to impose tariffs on vehicle imports on national security grounds.
A 20 percent tariff on cars built in the European Union, which was also suggested by Trump, would see FCA profits decline by up to 526 million euros ($613 million), according to calculations by Evercore and Automotive News Europe.
Last year, FCA exported to the U.S. 158,553 cars and trucks from outside of the NAFTA area, up 3.7 percent from 2016, according to the Automotive News sales database. Sales rose 2.8 to 66,735 in the first five months compared with the same period in 2017.
The tariffs would be bad for consumers, but also companies and seemingly everyone else.
3rd Gear: Audi’s CEO Probably Won’t Be CEO Anymore When He Gets Out Of Jail
It turns out getting arrested isn’t great for job security. Rupert Stadler was taken into custody on June 18 after German prosecutors became convinced that he would flee or try to obstruct the investigation if he remained free. Stadler has also been suspected of fraud and giving false testimony, all fallout from the neverending Dieselgate scandal.
Audi’s sales chief Bram Schot has since been appointed as interim CEO at Audi
From Automotive News:
Stadler, 55, will remain in jail in Augsburg, Germany, at least until next week when defense attorneys and investigators have scheduled meetings to allow him to answer questions. Whether he is then released on bail remains unclear. Wolfgang Hatz, VW’s former top engineer, won his release on bail of 3 million euros ($3.5 million) this week after spending nine months in custody.
“The expectation is that Stadler cannot return to his post. You have to be careful, because it’s not so easy due to German labor laws, but he needs to concentrate on his legal defense right now and clearing his name,” said a source close to VW’s supervisory board.
The most elegant solution would be that Stadler is eventually released from custody and volunteers to step down to focus on his legal defense, insiders say. By stepping down willingly, he would save the company the trouble of firing him — a situation no one at the group wants — and Stadler would not be able sue Volkswagen for wrongful dismissal.
It could potentially take weeks or even months before it becomes clear if prosecutors will file charges. Sources say the last thing Audi needs at this point is a lame duck CEO directly implicated in its biggest scandal returning to his old job once he is released from custody.
Whether Schot will be named to the job permanently is still to be seen. Through all of this, Audi has set sales records, especially in the U.S., where they’ve been on fire.
4th Gear: Waymo Will Need ‘Many More’ Cars For Its Robo-Taxis In Europe, Will Also Not Be Called Waymo In Europe
That’s according to an interview CEO John Krafcik gave to a German newspaper, per Reuters. Waymo has been in talks with several automakers over who might supply those cars, but, for now, the identities of those automakers are secret. Waymo, a subsidiary of Google’s parent company Alphabet Inc., has already partnered with Fiat Chrysler to supply tens of thousands of cars for its robo-taxi plans in the U.S.
“Everything we have announced so far is just for the United States. We need many more vehicles,” German daily Handelsblatt cited John Krafcik as saying in an interview published on Thursday.
“I cannot give you an exact figure, but it is a large number,” he added.
He reiterated that the service would likely not carry the Waymo brand in Europe.
“In Phoenix, we are launching under the Waymo brand. In Europe we would choose a different approach because our brand is not well known in Europe. We would cooperate with a European car brand,” he said.
5th Gear: BP Reckons With The Future
The British gas giant said Thursday it would acquire Chargemaster, a British electric vehicle charging company, for 130 million pounds, or around $170 million. That may seem like a small investment, but BP has big plans for electric charging, starting with a rollout of chargers at gas stations in Britain before turning its eye to China.
“We want to have a leading position in the UK whatever fuel choice our customers have,” Tufan Erginbilgic, head of BP downstream, told Reuters after the company announced the 130 million pound ($170 million) acquisition of Chargemaster.
BP forecasts that the global EV fleet will soar to more than 300 million by 2040, from just 1 million in 2016, and said it plans to deploy ultra-fast 150 kilowatt chargers able to deliver 100 miles of range in just 10 minutes across its 1,200 petrol stations in Britain over the next 12 months.
Although most EV drivers charge their cars at home or at street charging points, Erginbilgic believes that retail stations will remain essential because only they will offer ultra-fast charging.
All of this is a prelude to big investments in Germany and China, where demand for electric cars is soaring.
Reverse: Smart Cars, Welcome
Neutral: What Will It Take For You To Ride In A Robo-Taxi?
I’ll try anything at least once.