Home » The Real Target Is China In Ford’s Michigan Battery Plant Controversy

The Real Target Is China In Ford’s Michigan Battery Plant Controversy

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Yesterday, I found myself awfully perplexed over Ford’s decision to abruptly hit pause on its $3.5 billion Michigan battery factory, which develops cheaper LFP batteries with technology from China’s CATL. Was it a way to hit back at the striking United Auto Workers? A political controversy? Did Jim Farley lose the deed to the land in a high-stakes poker game? Aliens? Today, we know more: it’s looking like the second one.

That leads off today’s Morning Dump, my last one at The Autopian (more on that in a bit.)

Vidframe Min Top
Vidframe Min Bottom

Also on tap for this fine Wednesday: Presidents Biden and Trump visit the picket line, sort of; why Toyota could be the big winner in the strikes; and more on the clash between personal economics and technological shifts.

Ford’s Battery Battle

Ford Blueovalsk Battery Plant 001
Photo: Ford

No wonder Ford hit pause yesterday: Reuters reports lawmakers at three U.S. House of Representatives committees have demanded that the automaker turn over documents related to its partnership with CATL and may force Farley to testify before Congress:

Republicans Jason Smith, Cathy McMorris Rodgers and Mike Gallagher – who chair the Ways and Means, Energy and Commerce and China select committees – jointly wrote to Farley with a new deadline seeking documents about the CATL partnership and the automaker’s plan to build a $3.5 billion battery manufacturing plant in Michigan using Chinese technology.

“Ford’s ongoing refusal to provide substantive responses … raises serious concerns regarding its licensing agreement with CATL,” the lawmakers wrote on Tuesday in a previously unreported letter seen by Reuters.

Republicans have been probing Ford’s battery plant plan for months over concerns it could facilitate the flow of U.S. tax subsidies to China and leave Ford dependent on Chinese technology.

Ford has until Oct. 6 to comply, but the automaker told Reuters it’s been responding to all questions so far.

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Basically, here’s what happened: a lot of folks (outside of Ford, presumably) are pissed that Ford is doing business at all with China for this battery plant, one of several it’s building—but this one will focus on cheaper, more volume-friendly LFP batteries.

The problem is the Inflation Reduction Act’s aggressive green subsidies and tax credits have two goals: one is to spur EV adoption and production here in the U.S. and North America, and two is to kneecap China. Sometimes those goals work in sync; sometimes they do not. Ford turned to CATL because it knows how to make cheap batteries, which America will need, and swears it’s just licensing that technology with no IP theft or national security risks. This guarantee has not been enough for lawmakers, especially ones on the Republican side.

And the Wall Street Journal indicates there’s a larger fight here over those tax credits and China, and already General Motors is crying foul over Ford’s play. This anecdote starts after a speech Farley gave in June announcing the CATL venture:

Later the same day at the General Motors headquarters, CEO Mary Barra and her team had a different message for the lawmakers: Ford’s plans could be the harbinger of Chinese domination of U.S. car manufacturing.

At stake in the meetings, described by people familiar with them, was more than just pride between the old crosstown rivals. It was also the price many Americans could pay for their electric vehicles in the next 10 years—and how the automakers would invest billions of dollars to sell EVs in the U.S.

The pair are lobbying over the terms of a $7,500 tax credit for consumers who purchase new electric vehicles. Starting next year, buyers can’t use the credit on cars that contain battery components from any source that the U.S. deems a “foreign entity of concern,” a vague term meant to reduce American reliance on Chinese batteries and materials.

President Biden is expected to decide this fall how strictly to enforce that requirement. If the rules are too tough, few EVs—if any—will qualify for the tax credit, potentially leaving Americans without that incentive to switch from gasoline-powered cars. A loose read on the rules could invite blowback from Republicans and other China critics.

Ford, with its plans to license Chinese technology to make cheaper, iron-based batteries in Michigan, has lobbied for a more flexible interpretation of the “foreign entity” rule. If its planned batteries aren’t eligible for the car-buyer subsidy, Ford executives have indicated they could scale back the investment; on Monday, the company paused construction of the new battery plant.

Emphasis mine up there. This is starting to make more sense now. And you get why GM’s unhappy here; it, too, is spending a ton of money to grow its local battery operations but not working with any Chinese companies. Apparently, Farley met with Michigan Republicans who demanded answers about this in July, but they weren’t satisfied. One last note from that story:

“All sides want to rid the U.S. of excess reliance on China,” said Jennifer Harris, who worked on clean-energy supply chains at the White House until March. “In some areas, the shortest, surest path may take some Chinese know-how up front, confined and cabined.”

Maybe. But is that something automakers, and America, will regret? Is it something they’ll even be allowed to do?

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Biden On The Picket Line, Trump Follows Tonight (Kinda)

Screen Shot 2023 09 27 At 8.16.31 Am
Screenshot: YouTube via White House

It’s been called a historic moment: the first time a sitting U.S. president has joined a picket line. Biden joined the UAW and its president, Shawn Fain, yesterday with Local 174 Willow Run in Belleville, Michigan; a GM distribution center currently on strike.

That’s one way to look at it. And it is historic, to be sure. But another way to look at it is Biden finally doing something after months of claiming to be the most “pro-worker” president in history, but prevaricating on where he stood on the UAW strike. After all, he needs a good relationship with the automakers too, and there are tons of political complications around his EV initiatives.

But there was a lot of candor from the president yesterday. He even said he believes the UAW “deserves” the 40% pay increases they’re seeking. From his remarks:

I see these CEOs try to justify a system where they take all the profit and the workers are left to fight for the scraps and live paycheck to paycheck. That’s got to end.

They say they deserve all the profit because they say they’re different. You know what? They are different. They have different degrees. They have different responsibilities. They have different titles, different positions.

You know what? I agree, though. They’re different. We — let’s talk about some of that. These CEOs sit in their offices, they sit in meetings, and they make decisions. But we make the product.  They think they own the world, but we make it run.

The CEOs think the future belongs to them. Today belongs to the autoworkers and the working class.

Welcome to the struggle, comrade. (I guess?) Meanwhile, Trump, still the GOP frontrunner and most likely candidate to face Biden next year, is also going to Michigan today. He had said he would be speaking with the auto workers, too, but only kind of; I don’t doubt many folks will come to his speech, but it’s at Drake Enterprises Inc. in Clinton Township—a Tier-2 and Tier-3 supplier. It’s a company very worried about jobs if a shift to EVs happens. From Automotive News:

Heather Dombrowski, co-owner of the company started by her grandfather in 1952, said Drake Enterprises was chosen to host the former president because of its entrepreneurial spirit and its exposure to the gasoline engine business. Trump has made the auto industry’s electric shift — and the risk of jobs lost to it — a major part of his campaign platform for reelection.

“Politics aside, this is a huge opportunity for us,” Dombrowski said. “We’re hoping that this will open doors to new customers and expand product lines with current customers.”

She said the company was put on the Trump team’s radar by a mutual contact, Matt Szubielski, managing partner at staffing agency Redline Resources in nearby Utica, Mich.

The company’s 125 or so employees are not represented by a union, she said. A few parts numbers have been affected by the UAW strike against the Detroit 3, and inventories are low, Dombrowski said. The company’s main concern, however, is filling 30 open jobs, a problem that started in the wake of the COVID-19 pandemic’s onset. The hope is that Trump’s visit spurs interest from prospective employees.

It is not clear how many people will attend, but Clinton Township Supervisor Bob Cannon said he was told the event is invitation-only.

So far, the targeted strike is limited enough in its scope to not have a big impact on Detroit carmakers’ sales yet, Cox Automotive Chief Economist Jonathan Smoke and senior economist and Cox’s senior director of industry automotive Charlie Chesbrough said Tuesday. But if the strike expands to more plants and persists into the fall, the supply of new vehicles — already tight — will shrink even more. If demand for cars remains steady, then it means “increasing prices in both the new market and the used market,” Smoke said during a news media briefing.

Smoke said the Japanese brands are in the best position to benefit from the strike’s fallout, especially Toyota, because its supply problems have resolved and it is now increasing vehicle production. Also, the Asian automakers’ lineups tend to be lower-priced sedans and smaller SUVs compared with the Detroit Three’s higher-priced big pickups and SUVs, making not only availability, but affordability attractive to consumers.

Maybe so. And they’re not union-built, but these days, the Toyota trucks are about as American as baseball, apple pie and not maintaining our infrastructure. If trucks from the Big Three start to run dry, those seem like the obvious place for customers to turn. Then again, I do not see this strike dragging on that long. We’ll see if I’m right or not.

The Electric S-Curve

Evsaleschart
Photo: Rocky Mountain Institute

A few news stories today almost made the cut for The Morning Dump, but I’m rounding them up here because they all kind of say the same thing. Volkswagen is cutting EV production at its German factory due to slowing demand in Europe, and Hyundai and Kia are cutting their EV prices in South Korea for the same reason. And yet this year is on track to be a record one for EV sales. How can both be true?

A study from the climate-focused Rocky Mountain Institute shows that EV adoption globally is tracking faster than expected, led by China and Northern Europe. But in most other places, it’s not going to be this magical up-and-to-the-right growth many people predicted years ago.

And pretty much everywhere, people are squeezed by higher energy costs, inflation, wage stagnation and concerns about charging; that’s true in multiple countries. Here’s Barron’s with more data from Cox Enterprises about what’s going on here in America:

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As for EVs, sales are still hitting records. Second-quarter unit sales were about 295,000, a record and up about 48% year over year. EVs accounted for about 7% of all new car sales, but Cox forecasts that will rise to 8% for the third quarter. That translates to roughly 310,000 units, another record.

That is where the good news ends for EVs. Dealer inventories are equivalent to about 97 days of demand, compared with 57 days for traditional vehicles, a signal that the industry has produced too many EVs. They are selling in record numbers, but still not as fast as expected.

EV sales at Ford Motor for instance, were only up about 6% year over year through August, while Tesla U.S. sales increased 30% from a year earlier in the first half of 2023. Production delays are part of the reason for Ford’s slower growth, but where demand for EVs is the strongest is also an issue.

Cox projects that EV sales will account for 23% of all new-car sales in California in the third quarter, while the figure in Michigan and Ohio—Ford and General Motors country—is projected to be 3%. Both manufacturers have a lot of assembly plants and employees in the region, but people there don’t seem to want EVs.

We’ve spent a century building a car-centric society across the world; changing that is going to weird, messy, expensive and fascinating. And as we see above, an increasingly hot political football just about everywhere.

A Programming Note

I find this stuff interesting, anyway. Plus it’s where all the news is going in the car world lately. Interesting enough that next week, I start as the new Editor-in-Chief of InsideEVs. Though this means I’m sadly moving on from The Autopian and freelancing in general, I hope you’ll check us out over there too from time to time. There’s no shortage of great stories in this world right now, and I think the world needs more places to cover them—not fewer ones.

This is all to say I’m grateful to The Autopian for having me around this past year, but even more grateful to you readers for supporting them. (And if you aren’t a paying member yet, consider it!) I can tell you this place is a real labor of love from all involved, but it’s growing fast and it deserves to be. That could not happen without the incredible backing from its readership. The Autopian is proving to be a real bright spot in an otherwise fairly dismal media climate; thanks for being a part of what they do. They’re just getting started, too.

So once again, I appreciate your support of David, Jason, Beau, Jeff, Matt, Mercedes, Thomas, Peter, Stephen and the rest of this wonderful crew. And remember this above all: never go to a second location with any of them.

[Ed note: It was fun to have the band back together again for a few months. It’s been an incredible period of growth and having Patrick around was a huge help and, on more than one occasion, a much-needed sanity check. I know Patrick will do great things at InsdeEVs and they’re lucky to have him. I also have a message to Patrick’s new boss (and, also my buddy) Seyth: Treasure Patrick, and if you don’t, please know that I do have a very particular set of skills. Skills I have acquired over a very long career. Skills that make me a nightmare for people like you. – MH]

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[Ed note: It’s been awesome having PG around, even if only part-time. His morning news roundups (he refused to call it The Morning Dump, strangely) is always excellent, and his ability to step in every now and then with edits has been hugely helpful as our team tries to grind through a somewhat tumultuous startup phase that requires everyone to wear many, many hats. It’s been wild to see him, Matt, Jason and me all back in one place, like the olden days, and it’s all been enabled by the greatest readership on earth — a readership for whom we here at The Autopian will never stop showing our appreciation. Thank you all, and thank you, PG. -DT]. 

[Ed Note: It’s funny how everything we’re doing here suddenly all seemed more real when PG showed up. That’s because for years PG was my editor, the adult in the room, the responsible, rational one who could read a story in the Economist and furrow his brow just right and only spent, what, a couple of days in jail? It was fantastic having PG with us, and he brought a lot of journalism-fu to our nascent site, and we will hold on to that, tightly, until it leaks. I know PG will be a fantastic EIC over there at SparkyCars or wherever he’s going. And I’m glad we never changed the name of the Morning Dump, because I’m a child. – JT]

Your Turn

What do you think is the most interesting story in the automotive world right now?

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10001010
10001010
4 months ago

I’m sorry to see PG go, I always looked forward to his insight, but I’m also glad that Morning Dump never got renamed because I too am a child.

Stef Schrader
Stef Schrader
4 months ago
Reply to  10001010

^5, Fellow Dump Lover

Angel "the Cobra" Martin
Angel "the Cobra" Martin
4 months ago

Adios Patrick. Hope to read about how you are the first person to crash the new Camaro EV.

Parsko
Parsko
4 months ago

Famous last word….

“now”

Good luck Patrick, you’re great. Oh yeah, and eat shit.

Last edited 4 months ago by Parsko
Unimaginative Username
Unimaginative Username
4 months ago

I don’t comment here nearly as much as I read (I did pay my dues though, very much worth it!), but I will pop in to say so long and thanks for all the fish and content to PG. Also, he can eat shit.

Boxing Pistons
Boxing Pistons
4 months ago

As another commenter mentioned on a previous article on the Ford battery plant: it is astounding that Ford could secure that much government money without a solid plan on where the thing would even be built! I am glad there are at least a few people scrutinizing these investments, especially where the Chinese are involved. I just wish they would have done their due diligence PRIOR to approving the loan. Of course I don’t know the whole story, but this just seems f*ed up to me. It is sad and telling that we are the ones licensing their tech now. They played on our shortsightedness and greed for 30 years, soaking up all our know-how. Now they are moving forward on their own.

Hoonicus
Hoonicus
4 months ago

What do you think is the most interesting story in the automotive world right now?
Dysautopain is nigh! The manufacturers are systematically removing privacy, right to repair, and ownership from consumers! They have stated that they project 30% revenue by means of subscriptions, and selling personal data. If the buying populace continues to support this affront to our individual freedoms, and buys into the idea that giving over critical vehicle control to (problematic at best) automation makes us all safer, We are on the path to losing are freedom to drive. “Drivers” that want lane keep assist, emergency braking, self parking, etc. are training themselves to be inadequate at the basic task.

Outofstep
Outofstep
4 months ago

Oh please please please can we call EV’s SparkyCars! That would be hilarious. Or at the very least just change the discord channel electri-city to SparkyCars.

Oh wait to the important bit, good luck PG. We’ll miss you here. I’m surprised you’re being let out of the cult. I thought we all swore blood oaths. Maybe that was just for the Lumiere Rouge. I gotta read the terms and conditions again.

Boxing Pistons
Boxing Pistons
4 months ago

“These CEOs sit in their offices, they sit in meetings, and they make decisions. But we make the product. They think they own the world, but we make it run.”

What’s this “we” stuff? Funny, but not really surprising given some of the doozies he’s come up with over the years to make it seem like he can genuinely identify with the audience he is speaking to. I like the UAW’s initial response to the former and current presidents’ plans to show up to support them – “Thanks, I guess”.

Dogisbadob
Dogisbadob
4 months ago

If Ford is just licensing CATL’s tech and shit without CATL itself having any other involvement, then what’s the problem? Otherwise, Ford could partner with Panasonic or some other company from Japan, Taiwan, the US, or anywhere else.

The UAW should demand seats at the table, like a works council they have in Germany, where Ford also has a big operation. Half the board is labor.

Toyota makes the best cars and trucks, union or not. Even the UAW-made Tacomas have been no problem at all. Toyota used to use UAW labor in Fremont, before it became a Tesla factory.

Despite Fain’s best efforts, the UAW has so much baggage that will take a long time to overcome. Perhaps a different union like the IBEW could organize what the UAW can’t.

OverlandingSprinter
OverlandingSprinter
4 months ago
Reply to  Dogisbadob

If Ford is just licensing CATL’s tech…

(emphasis added) There’s the potential problem. Commentators in the automotive press focused on the use of foreign “materials,” which would exempt the vehicle from the IRA $7,500 tax credit. The question becomes an interpretation of a poorly written law. If Ford uses CATL IP to build a battery, is the battery a foreign material? I think some legislators would like to think so.

Brian Ash
Brian Ash
4 months ago

Not sure about when the rule goes to 100% but the 50% rule was components produced or assembled…. that’s like Dewalt tools assembled in US with 90% imported components from China. The critical mineral component is US company or “free trade partner”.

So many ways a company can find loopholes in that. If the 100% rules are same as the 50%. So if Samsung provides the components & materials as they are a free trade partner, but they get all of it from their China factories or chinese sources, bet thats a loophole.

Drew
Drew
4 months ago
Reply to  Brian Ash

The critical minerals part is based on where the minerals are “extracted or processed.” So, yes, if Samsung opens up a processing plant and processes the critical minerals, it would meet the requirement.

The “or” is pretty important, too. You could mine the materials in the US, ship them to a Chinese refinery, then bring them back to assemble the batteries. Or mine them in China, ship them to South Korean refineries, then use them in US. Until 2025, at which point they may not contain any minerals from a “foreign entity of concern.”

And the battery components must be X% “manufactured or assembled” in North America to qualify, with no components coming from a “foreign entity of concern” starting in 2024.

Interestingly, all of this is based on value, not on volume, so the game I’m waiting for is North American components being valued higher than imported components. “The battery is made of 75% NA parts by value (25% by volume). It’s the exact same as last year’s 60% NA battery, but NA prices went up and import prices went down.”

Boxing Pistons
Boxing Pistons
4 months ago
Reply to  Brian Ash

It’s a bitch to navigate. Trust me. I have worked in manufacturing for awhile and have been a part of several projects aimed at the “buy American” act. It can be very vague and the thresholds are different for every major segment. As an example: Rail projects and DOT projects have different percentages required to get the contract. “Assembled” in the US can range from buying foreign raw materials to full-on kits ready to bolt together. Everybody plays the game, and the rules are up to interpretation in many cases. I would be surprised if this was any different.

Drew
Drew
4 months ago

The law doesn’t use the term “materials.” There’s the North American assembly requirement and a required percentage of “critical minerals.” Those “critical minerals” must be X% “extracted or processed” in a country with a free trade agreement. IP seems to have zero consideration in either case.

OverlandingSprinter
OverlandingSprinter
4 months ago
Reply to  Drew

Thank you for the clarification — I have not read the law — and it appears you have.

Drew
Drew
4 months ago

I got a little too invested in it because I was looking at a potential purchase at the time and trying to ensure I’d pick something eligible.

Man With A Reliable Jeep
Man With A Reliable Jeep
4 months ago

Who’s cutting onions? I’m not crying! I’m… I’m not…okay, okay, you got me.

J G
J G
4 months ago

I’be been told you never trust a person with two first names, as would seem this is still good advise.

RataTejas
RataTejas
4 months ago
Reply to  J G

In the spirit of the ghost of PG, editor, *advice.

Leighzbohns
Leighzbohns
4 months ago

Hey I just want to say it’s been real nice reading PG and his not so hot takes on the whole ev/battery/smoke and mirrors shitshow that is electric cars.

Frankencamry
Frankencamry
4 months ago
Reply to  Leighzbohns

The not so hot takes were a large part of why I was excited to move over here. I can get hot takes anywhere.

Leighzbohns
Leighzbohns
4 months ago
Reply to  Frankencamry

But can you get hot takes that are both funny and enraging? Didn’t think so!

RootWyrm
RootWyrm
4 months ago

Ford turned to CATL because it knows how to make cheap batteries, which America will need, and swears it’s just licensing that technology with no IP theft or national security risks. This guarantee has not been enough for lawmakers, especially ones on the Republican side.

Firstly, the GQP does not have ‘lawmakers.’ It has stochastic terrorists and outspoken Nazis. There is no such thing as a ‘moderate.’ If 9 people are sitting at a table, and a Nazi joins them, then you have 10 Nazis at the table.

That said: Ford’s the sucker here, as per usual, but trying to play P. T. Barnum. They claim they’re just ‘licensing the technology.’ But that’s not how it works with China. Period. Especially not when Ford is also tied up with Changan-Ford-Mazda as the ‘equal but not’ partner. And Farley and his appointees are definitely stupid enough to think they can hide some deal with Winnie the Pooh.
Remember, China’s response to sanctions is always tit-for-tat. There is no way in hell they would ‘license’ anything like this without Ford giving them something very, very big in return. Period.

Smoke said the Japanese brands are in the best position to benefit from the strike’s fallout, especially Toyota, because its supply problems have resolved and it is now increasing vehicle production.

Know how I always talk about Hyundai/Kia dealers being the worst enemy of Hyundai/Kia?

Toyota has been watching that for years, and decided to tell everyone to hold their beer.

Every experience with the local Toyota dealerships has reached the point of making me long for ‘no test drives without credit check.’ If you so much as say MSRP on anything, they laugh loudly in your face and mark the price up more. If you want an oil change and tire rotation, you’d best mark the filter and tires so you can prove they didn’t do it, as usual.

As a sampling of this, if you want one of their ’30 Tacomas in stock’ because they don’t even bother to update their website? (Which is advertising 2023 4Runners ‘coming soon’ still.) They have the most base Taco SR5 4×4 there is, period. Zero options, white over black. They list a bogus “TSRP” of $40,667, false ‘savings’ of $1,167, and a sale price of $39,500. And again: absolutely zero options. Not a single one.
Toyota’s website prices it out at $38,055 with $1,495 freight.

Want a GR86? Every single one they get in is falsely listed as ‘sale pending.’ TSRP is whatever actual MSRP is, plus $1,000, but sale price is ‘inquire.’
But surely they don’t do this fuckery with Camry right? “lol, what Camrys?” Yep, zero Camrys. Corollas? They list a TSRP, but sale price on a COROLLA is “inquire.” Where “inquire” is “oh, there’s a $5,000 market adjustment.” Minimum. On Corollas. Don’t even ask about Rav4’s.

So once again, I appreciate your support of David, Jason, Beau, Jeff, Matt, Mercedes, Thomas, Peter, Stephen and the rest of this wonderful crew. And remember this above all: never go to a second location with any of them.

Oh goddamnit, is this how you escaped the plan to keep you by tying you up in the closet with ratchet straps? I told them they needed to do it while you were distracted by one of my comments, and not under the guise of a going away party.

And as is tradition: eat shit, Patrick. You’re dead to us.

MrLM002
MrLM002
4 months ago
Reply to  RootWyrm

So the entirety of the Canadian Parliament are Nazis considering their standing ovation of a literal SS Member right?

Leighzbohns
Leighzbohns
4 months ago
Reply to  MrLM002

Yep. Next question! (note there has been quite the kerfuffle over that, which is the correct response to such a grave oopsie)

Andy Individual
Andy Individual
4 months ago
Reply to  MrLM002

They represent us, so technically all Canadians are Nazis!

Mr. Fusion
Mr. Fusion
4 months ago

I saw Yoga Hosers, that’s not quite how it works!

Scottingham
Scottingham
4 months ago
Reply to  RootWyrm

Wouldn’t us getting domestic experience with the new battery chemistries be a good thing? We could ‘borrow’ what we learned to do it ourselves. Just like China has been doing for the past few decades.

PL71 Enthusiast
PL71 Enthusiast
4 months ago
Reply to  Scottingham

This is exactly what I was thinking. I hope there is some IP theft involved but in the opposite direction as usual. CCP would definitely throw a tantrum though.

RootWyrm
RootWyrm
4 months ago
Reply to  Scottingham

And do you really, honestly think China’s going to actually hand over the real information? lolno.

It’s going to be the capacitor plague all over again, but in reverse, and with a lot more deadly fires.

Scottingham
Scottingham
4 months ago
Reply to  RootWyrm

It would be hard for them to completely ‘black box’ an entire factory. I’m sure that there’d be lots of processes that could have…horizontal…knowledge transfer.

RootWyrm
RootWyrm
4 months ago
Reply to  Scottingham

Read about the capacitor plague. All they need to do is omit one little thing, and whoops, you have self-destructing components. And that was with capacitors, a very well known and well understood passive component. It’s a lot easier to pull similar with extremely complex battery chemistry.

Drive By Commenter
Drive By Commenter
4 months ago
Reply to  RootWyrm

Darn. My local Toyota dealer is actually pretty decent. They don’t mark up parts beyond Toyota MSRP, the parts counter folks have zero hesitation about saying which other dealers have stuff in stock and common vehicles are at MSRP or slightly lower. Guess I should consider myself lucky.

Drew
Drew
4 months ago

My experience is mixed. I am considering the new Tacoma if the price and efficiency are right. The local dealer told me they’ll take a $1000 non-refundable deposit and sell at MSRP. The next dealer out told me they’ll take my name, but the pricing will be whatever they decide. The next one out said $2000 non-refundable, but they also get the most allocation, so they have the best chance of getting a person what they want. When I asked if that deposit ensured MSRP, they went silent on me. All three have dealer markups on most things in the lots.

The first one, which seems pretty fair on new cars, recently had a “used” Prius Prime marked up over $10k above new pricing with almost no miles, so I’m pretty sure they do a lot of creative inventory moves.

I didn’t even see them marking down vehicles pre-Covid. Now? Certainly not. But the markups at most of them didn’t go as wild as some of the other places around here during the big rush, so it’s a mixed bag.

Last edited 4 months ago by Drew
RootWyrm
RootWyrm
4 months ago
Reply to  Drew

Only marked up $10k over new pricing?

Our locals have such gems as a 2005 Corolla LE with 110k for $7k (cash only.) A ’20 Corolla Uber-mobile with over 60k at $18k. Several ’20 and ’21 Corolla LEs with 30-40k at original sticker or well above. RAV4’s are at or above sticker. Camry Uber-mobiles are all over original sticker and all with zero warranty.

And the crown jewel, a ’23 4Runner with over 10k miles, accident history, and only the ‘Certified Used’ warranty (no factory warranty at all) at $5k above original sticker, cash only. Finance price is “no” or +$10k.

Drew
Drew
4 months ago
Reply to  RootWyrm

Holy crap. My mixed bag is just fully pleasant, I guess. Wow.

PaysOutAllNight
PaysOutAllNight
4 months ago
Reply to  Drew

“Non-refundable” deposits are refundable in most states, even when the dealership claims they are not. You don’t even have a contract for sale until pricing and delivery terms are agreed upon. But I wouldn’t ever deal with a dealership that would ask for a non-refundable deposit of any sort. In fact, I would get that in writing, then call them out by name on national automotive-enthusiast websites.

My two local Toyota dealerships are similar to your first two in most ways.

One will accept a $1000 deposit for an order of any Toyota at MSRP. They have so little on the lot that I didn’t find anything to suggest what their in stock pricing would be. They do try to add on a $395 charge for a module that automatically blinks your taillights when stopped, but they’ll remove that on request. I had a deposit with this dealer for a RAV4, and they quickly refunded it when I bought a used Clarity instead.

The other is doing waiting lists and “market pricing” as it arrives. If you don’t take the car that arrives at the price they offer when your name comes up, you go back to the bottom of the list. They have several units on the lot, all with significant dealer add-ons and outright price markups.

Deal only with ethical dealerships.

Taco Shackleford
Taco Shackleford
4 months ago

Good luck Patrick, and hope to see around here in the comments as a member.

Spikedlemon
Spikedlemon
4 months ago

Can Toyota capitalize? Maybe. But probably not as well as they would want.

Local to me: no dealer has stock of high-desirable vehicles (let alone mid-level trims) of vehicles like RAV4, Corolla, Prius, Taco, etc…

Brian Ash
Brian Ash
4 months ago

GM what’s the difference with Ford partnering with CATL and GM partnering with Samsung and LG. Who cares it’s all foreign investment. Why can’t these companies do shit by themselves?

Leighzbohns
Leighzbohns
4 months ago
Reply to  Brian Ash

I think you can believe that the Korean companies are going to play by business rules (not the law, but also not not the law). I would expect that CATL and winnie the pooh aren’t

Brian Ash
Brian Ash
4 months ago
Reply to  Leighzbohns

But LG, SDI, SKI get many components and materials from China, heck half of SDI’s operations are based in China. Even with non-Chinese companies it mostly goes through China anyways.

I would like to see EV battery plants in the US with only US investment, materials sourced by those companies and components if needed from a 3rd party to also be produced here.

Leighzbohns
Leighzbohns
4 months ago
Reply to  Brian Ash

Guess I have to admit my (obvious) ignorance on this subject. Seems there’s not really a developed battery infrastructure in the U.S.

Brian Ash
Brian Ash
4 months ago
Reply to  Leighzbohns

The IRA has rules and conditions on where the battery is made, thought there were also parts specific to source of materials. Like the window sticker on a car, we should publish % sources of raw materials by domestic or foreign companies and % where components are made. For any CATL, LG, SDI, SKI battery “assembled” in the US, would like to know what components were imported and for the raw materials Lithium, Cobalt, Copper, etc what are the sources.

Panasonic is the only one I have seen that are going to be using some components made in the US.

Stealthwang
Stealthwang
4 months ago
Reply to  Leighzbohns

Korea is rife with corporate espionage- but they do a better job of obeying international IP. Doesn’t take much searching though to find major cases where Korean companies got sued for infringement of American IP.

Last edited 4 months ago by Stealthwang
RootWyrm
RootWyrm
4 months ago
Reply to  Leighzbohns

Ding ding ding.

South Korean companies actually obey laws and honor agreements, by and large. (Granted, the Chaebols write the laws, but still.) And South Korea also has long had a positive relationship with civilized auto manufacturing.
The first cars built there were licensed Ford Cortinas and Mazda Familias (Kia Brisa.) The Hyundai Pony was engineered by a British team, designed by Italians, and built from in-house body, Ford Cortina suspension bits, and Mitsubishi drivelines.

The South Koreans also build most of their western market cars in the west. Hyundai has Montgomery, AL which makes the Elantra, Sonata, Tuscon, Santa Cruz, GV70, Santa Fe, Theta, Nu, and Smartstream. Kia shares with additional plants in West Point, GA, Monterrey, Mexico, and Zilinia, Slovakia.

SNL-LOL Jr
SNL-LOL Jr
4 months ago
Reply to  RootWyrm

I wouldn’t put too much faith in Korean business practices either.
See: Sewol ferry, Sampoong Department Store, etc.

Drew
Drew
4 months ago

The strike is clearly the most interesting and impactful story in the US auto industry, but I think some of the most interesting stories coming up are going to be related to new battery chemistries and charging architecture. If Toyota’s not just blowing smoke, what they’ve been teasing is going to be massive news when the details actually drop.

If others are just playing their cards close to the chest, we’ll have a few other stories popping, too. If Toyota has leapfrogged past everyone, that’s going to dramatically change the EV landscape, either via deals with Toyota or a massive shift in market share. And finding out Toyota was all talk will have a potential impact. However it shakes out, it’ll really be some major news.

And Patrick, you’re going to be in a good place to get in-depth with those sorts of stories! Congratulations on the new job!

Thevenin
Thevenin
4 months ago
Reply to  Drew

Toyota’s not just blowing smoke

That’s a big “if.”

  • 2010: Toyota unveils a solid state LiCoO2 battery prototype in Japan, promising superior performance in hybrids.
  • 2012: Toyota unveils a solid state Li10GeP2S12 battery, promising to bring it to market as early as 2015.
  • 2017: Chunichi Shimbun reports Toyota plans to have solid state EVs by 2022.
  • 2019: Toyota promises to unveil a solid state EV prototype for the 2020 Olympics.
  • 2020: Nikkei Asia reports Toyota plans to introduce solid state EV by 2021.
  • 2022: Autoline reports Toyota plans to introduce solid state hybrids by 2025.
  • 2023: Toyota promises to have solid state EVs by 2027-2028.

You know how Elon Musk has promised self driving cars “next year” for the last nine years? Yeah. That’s how I feel about Toyota’s SSBs, and it’s the primary source of my grudge against Toyota. Maybe they’ll get there someday, but I suspect there’s a reason solid state batteries are perpetually 3 years away, some challenges or limitations they’re not willing to tell us about.

Drew
Drew
4 months ago
Reply to  Thevenin

You’re not wrong, but I’d say that the difference in the latest ones is that failing to deliver looks a lot like throwing a wrench into everyone else’s EV sales just because they’re behind. Which might be the case, but it’s probably going to be a stink if they can’t show any progress that led them to believe they could deliver.

They’ll probably try to weasel out of it with a few pages of analysis showing that SSB EVs are feasible, but will be prohibitively expensive, along with a prototype, and they’ll hope they’ve brought something competitive to market in the interim. I have to assume they are at least hoping to sell some EVs, but needed to slow others’ sales down to get a competitive product to market.

Arch Duke Maxyenko
Arch Duke Maxyenko
4 months ago

Aw, thanks Rick George, you did good here, so as is tradition, eat shit.
But the most interesting story right now is the fact that Hyundai Kia is recalling 3.4 million cars for risk of FIERY DEATH.

Alexk98
Alexk98
4 months ago

At least that’s a much more interesting type of death that the usual “whoops engine shut off on the highway forever sorry” sort of death they typically have

ElmerTheAmish
ElmerTheAmish
4 months ago

Had to text The Wife about that recall. Her mom likes to worry about that sort of thing; the last time FIERY DEATH was foretold, The Wife ended up with a new car (another Kia that probably* wasn’t going to spontaneously combust). Now that we’re on her third Kia, I wanted to make sure this one wouldn’t need to spontaneously go away for yet another new Kia…

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago

Best of luck and thanks for your contributions Patrick! I feel like a site that’s purely focused on EVs will be a great fit since you’re clearly very passionate about them.

V10omous
V10omous
4 months ago

What do you think is the most interesting story in the automotive world right now?

As the overpromised and under-thought-out EV mandates begin crashing down, which manufacturer will be the first to risk the ire of the coastal elites and announce a new line of gas engines is under development?

JDE
JDE
4 months ago
Reply to  V10omous

I vote GM. they are the only standouts except maybe Mustangs that even still use V8’s in volume. They also have not followed suit on the turbo six trend for trucks. I do think a revised Atlas 4.2 with flow through head and 300 HP NA, while maybe 500HP with turbo’s would be interesting and could be used in a lot of vehicles. A K5 Blazer to actually compete with Bronco and Jeep seems like a no brainer.

V10omous
V10omous
4 months ago
Reply to  JDE

A K5 Blazer to actually compete with Bronco and Jeep seems like a no brainer.

I have been saying this for years. Wild that they don’t seem to agree.

Nsane In The MembraNe
Nsane In The MembraNe
4 months ago
Reply to  V10omous

GM would rather make another soulless blobby crossover and shoot themselves in the dick repeatedly than do something that would be that cool and make that much sense

V10omous
V10omous
4 months ago

What makes it extra frustrating is they clearly have car people making decisions! Their performance division takes risks and builds cool stuff all the time! A soulless company wouldn’t change the entire drivetrain layout of its performance flagship, or bring manual transmissions back to the Blackwings, or develop the 1LE packages, or design a ground-up 8500 RPM flat plane V8, et al.

For whatever reason, the adventurous spirit seems to end at the truck and SUV lines. It took them 25 years to make a performance Escalade. They’ve gone 15 years without a Raptor competitor. They’ve gone 8 years since the Bronco was announced with no response. And so on, and so on.

Leighzbohns
Leighzbohns
4 months ago

GM would rather make MONEY HAND OVER FIST by selling soulless blobby crossovers made with commodity parts rather than making something interesting and shooting themselves in the dick.

Fixed it for you.

Thomas Metcalf
Thomas Metcalf
4 months ago
Reply to  V10omous

I hope SOMEBODY at GM realizes that they dropped the ball with the new ‘Blazer’ after watching the Bronco print money for Ford.

Boxing Pistons
Boxing Pistons
4 months ago
Reply to  V10omous

Same here. They have left so much brand equity/nostalgia on the table it isn’t even funny. A new K5 would print money. I heard whispers of a new Jimmy that would fill that gap, but I am not holding my breath.

Leighzbohns
Leighzbohns
4 months ago
Reply to  V10omous

Silly V10omous, the coastal elites give zero shits about gas engine development happening or not.

Last edited 4 months ago by Leighzbohns
V10omous
V10omous
4 months ago
Reply to  Leighzbohns

Do you think it’s somehow Midwesterners coming up with ICE bans?

Leighzbohns
Leighzbohns
4 months ago
Reply to  V10omous

I think the rumors of an ICE ban have been exaggerated. California is one thing, but the rest of the country? Naw dawg. Now, making ICE vehicles expensive and difficult to manufacture is certainly on the table but that was always going to happen.

V10omous
V10omous
4 months ago
Reply to  Leighzbohns

California, New York, Washington, etc.

I agree that actual ICE bans are unlikely to take effect on the timescales proposed, but that will be due to a technology gap making the idea untenable, not an enthusiasm gap for the idea from policymakers and elites.

Leighzbohns
Leighzbohns
4 months ago
Reply to  V10omous

Exactly: There’s a lot of space between some pseudo-leftist (let’s be honest here) governor staking out an extreme position as a rhetorical marker and a ban making it through the legislature. Hell, Washington couldn’t even get a carbon tax past a 50% referendum, and considering the current lopsided political climate here that’s saying something.

PL71 Enthusiast
PL71 Enthusiast
4 months ago
Reply to  V10omous

The EA888 is getting pretty old, much older than the EA113 was when they brought out the 888. I would not be surprised if VAG developed a new 4cyl.

Widgetsltd
Widgetsltd
4 months ago
Reply to  V10omous

If I ever get back into 24 Hours of LeMons racing, I’m totally gonna call my team Coastal Elites.

Forbestheweirdo
Forbestheweirdo
4 months ago

Well on the bright side, at least we can now take our morning dump while reading the morning dump without PG complaining about it. But nevertheless, you’re one of the good ones PG, and your help in building this craziness will not be forgotten. It was great having several of the best automotive writers out there back together, even if y’all are still missing Fancy Kristen and Stef.

StillNotATony
StillNotATony
4 months ago

So we aren’t doing the whole roast him out the door thing? He’s not dead to us all? Nobody even gonna point out he has two first names and no last name?

FINE. (Puts away flamethrower)

Skurdnee
Skurdnee
4 months ago
Reply to  StillNotATony

never trust anyone with two first names

StillNotATony
StillNotATony
4 months ago
Reply to  Skurdnee

That’s just common sense.

Chris Stevenson
Chris Stevenson
4 months ago

Thank you for your contributions, Patrick! It was exciting to see your byline here, but I’m glad you’re getting back in the EIC chair where you belong.

Zepharious
Zepharious
4 months ago

“These CEOs sit in their offices, they sit in meetings, and they make decisions. But we make the product. They think they own the world, but we make it run.”
Amazing to hear a sitting President say this, but until there’s legislation, it’s still just campaign speak. It does show he’s willing to piss off the suits, at least with his words.
Trump is not pro-union in any way, and anyone who believes it is absolutely being taken for a fool.

JDE
JDE
4 months ago

The biggest issue I have with PG is that he is from NYC Where cars are somewhat vilified and perhaps a lot less useful than the rest of this great nation and has a lot of bad Jalopnik residue on him as a result.

Matt Hardigree
Matt Hardigree
4 months ago
Reply to  JDE

He’s from Texas! Also, plenty of car people you talk to on this site, live in or were born in New York (myself, Jason, Rob, for example).

Last edited 4 months ago by Matt Hardigree
JDE
JDE
4 months ago
Reply to  Matt Hardigree

Ahh, I will take it back then, I did think it odd he did not write about bicycles more than cars.

Arch Duke Maxyenko
Arch Duke Maxyenko
4 months ago
Reply to  JDE

Writing about bikes was Raph’s thing

Leighzbohns
Leighzbohns
4 months ago

I miss it, and his terrible bike decisions. Always found the crypto bike weirdos in the other site comments section. I see his bad takes over at Stroad and Tarck but they’re bad car takes and it’s not quite the same.

Last edited 4 months ago by Leighzbohns
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