Proposed expansion of electric vehicle tax credit has some caveats
The Senate’s proposed electric vehicle tax credit extension makes new demands, Ford owners sue Ford again, and Bentley gangbusters. All this and more in The morning shift for Friday July 29, 2022.
1st gear: tax credits for electric vehicles may return, but at what cost?
This week, Senate Majority Leader Chuck Schumer and fossilI’m a senator fan Joe Manchin reached an agreement in principle this week on an invoice this would remove the $7 sell limit,500 EV tax credit – allowing GM, Toyota and Tesla to recoup their rebates. But for car manufacturers, those incentives would be come with at least a disadvantage: the production of vehicles must be in North America. Of Automotive News:
A Senate proposal released Wednesday would extend the current $7,500 tax credit for consumers buying new electric vehicles, but add increasingly stringent mineral and battery supply requirements for automakers.
By 2024, the proposal calls for 50% of critical minerals used in electric vehicle batteries to be mined or processed in the United States or a country where the United States has a free trade agreement in place or from of recycled materials in North America. By 2024 and 2025, 60% of battery components must be manufactured or assembled in North America.
Sourcing requirements would increase to 80% after 2026 for critical minerals, and by 2029, 100% of battery components would have to be manufactured or assembled in North America.
Final assembly of the vehicle must take place in North America — a provision that would apply immediately after the bill becomes law.
While the battery production requirement gets a schedule to start, vehicle assembly does not – if your EV isn’t made here, it can’t get the full benefits. This means that vehicles from Toyota, Subaru, Kia, Hyundai, Mazda, BMW, Porsche, Mercedes and even Tesla cars built in Germany or China would not be eligible. Have fun with your Hummers and ID.4s, I guess.
2nd Gear: Ford sued over yet more Focus and Fiesta transmissions
Remember in 2019, before the world fell apart, when Ford was sued for faulty transmissions at the start-‘20teen Football and Fiestæ? It seems the problems didn’t end there, as owners of newer cars are now taking the same complaint to court. From Detroit Free Press:
Four owners of the 2017-19 Ford Fiesta and 2017-18 Ford Focus are suing Ford Motor Co., alleging the vehicles have the same irreparable transmission defects as previous models, resulting in hundreds of millions of dollars in class action settlement payments.
However, the vehicles are “plagued by numerous problems and safety issues…transmission slips, kicks, jerks, rough engagement, premature internal wear, sudden acceleration, delay in downshifts, delayed acceleration, difficulty stopping vehicle and possibly catastrophic transmission failure,” said the lawsuit filed in U.S. District Court for the District of Delaware in June.
The lawsuit could potentially cover about 380,000 vehicles nationwide equipped with a DPS6 transmission, according to public sales data.
Ford settled the latest suit, paying some owners up to $20,000 to redeem their broken cars. The sedans and hatchbacks were probably phased out, though I really like the idea that they saw new life in a Spec Broken Gearbox race series within Ford.
3rd Gear: Bentley does not know the concept of “recession”
As the rest of the world frantically cuts jobs and lays off workers to prepare for a global economic downturn, Bentley is having fun selling highly customized cars to “wealthy customers”. Of Reuters:
British luxury carmaker Bentley’s operating profit more than doubled in the first half, boosted by increased personalization of cars as sales rose significantly in Europe and Britain despite continued global economic uncertainty.
“Despite continued global economic instability, it is promising to see Bentley demonstrate financial consistency as we reinvent the business,” Chief Executive Adrian Hallmark said in a statement.
Global sales rose nearly 3% to 7,398 cars from 7,199 in the first half of 2021, while revenue per car jumped nearly 15% to 213,000 euros from 186,000 as wealthy customers took advantage of a personalization program.
The hot new thing for the C-suite is to fire all your employees and redirect their salaries to custom Bentleys, apparently. I’m sure that bodes well for the world as a whole.
4th gear: Aston Martin swears it will soon stop bleeding money
However, not all luxury automakers have such a ball. Aston Martin, now without the release of a new Bond film on the horizon, spent the first half of 2022 shoveling pounds into an oven. But it will get better, I promise. Of Reuters:
Aston Martin (AML.L) expects its finances to improve in the second half of 2022 after spending tens of millions of pounds in cash earlier this year, it said on Friday, as the Easing the supply chain is helping to boost deliveries of higher-margin cars.
Its positive free cash flow forecast comes as the luxury automaker posted a bigger loss in the first six months, marred by supply chain and logistics issues that were exacerbated by lockdowns in China. , the war in Ukraine and soaring costs.
Aston Martin announced a fundraising earlier this month that will see the Saudi Public Investment Fund overtake Mercedes-Benz AG (MBGn.DE) to become its second largest shareholder behind chairman Lawrence Stroll. The cash call will help repair its debt-ridden balance sheet.
The Formula 1 team owner expects to sell more cars in the second half of 2022 as some supply chain issues ease and following a ramp-up in production of its most profitable models – the DBX707 luxury SUVs and the V12 Vantage sports car.
Walking around New York you’ll see Bentleys on the street, but I don’t know if I’ve ever seen a DBX707 in the wild. In fact, the only one I remember clearly was at Lime Rock Park. I don’t think that counts.
5th gear: the man gets a job
Hyundai Motor America has a new CEO, and his name is Randy Parker. He’s stepping down as senior vice president of national sales, which means he probably knows the pulse of the US market pretty well. Of Automotive News:
Hyundai Motor Co. is making key leadership changes, including the appointment of Randy Parker as CEO of Hyundai Motor America.
He is one of the first African Americans to be named CEO of an automaker in a regional market. He is also the second black CEO named in the US auto industry this month. On July 12, Lordstown Motors Corp. named Edward Hightower as its new CEO – the first black CEO of an American automaker in more than 100 years.
In his current role as senior vice president of national sales for Hyundai Motor America, which he assumed in 2021, Parker has overseen all aspects of sales and distribution.
Parker probably understands that Americans don’t buy hatchbacks, but we could all at least ask him to bring the Veloster back. It’s worth it, right ?
Back: The Last Frontier
Neutral: Will the EV bill pass as written?
Toyota, GM and Tesla lobbied for the tax credit’s proposed wording, but it specifically prohibits eligibility for the bZ4X and many Teslas – not to mention the league of other automakers whose electric cars aren’t built to United States, Canada, or Mexico. Will he face decline of these other pressure groups?